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Rhode Island Now Has Nation's Highest Cigarette Tax

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The nation's smallest state now has the highest tax on cigarettes in the U.S., levying $3.46 cents in taxes on every pack sold, the Providence Journal reported April 9.

A $1-per-pack increase in the state cigarette tax went into effect last week, on top of a hike in the federal tobacco tax from 39 cents per pack to $1.01 per pack that was implemented on April 1. Combined, the taxes are expected to drive the price of a premium-brand pack of cigarettes up from about $6.50 to about $8.35.

The state's Republican governor, Don Carcieri, proposed the tax increase as part of his plan to close a $357-million budget deficit, and the Democrat-controlled legislature approved the increase. The state also raised the tax on smokeless tobacco, snuff and pipe tobacco from 40 percent of the wholesale price to 80 percent.

Despite the tax increase, Rhode Island doesn't necessarily have the country's highest cigarette prices, since some other states impose a minimum price markup in addition to taxes.

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