Michael F. Easley
Governor

The Great Seal of the State of North Carolina Carmen Hooker Odom
Secretary

North Carolina
Department of Health and Human Services

For Release: IMMEDIATE
Date: July 16, 2007

  Contact: Debbie Crane

Cigarette Tax Decreases Tax Use; Raises Revenue

RALEIGH – State public health officials said today that in the first year after North Carolina’s cigarette tax was raised, there was an 18.5 percent drop in cigarette sales. The higher tax didn’t hurt state revenues either; in fact revenue from cigarettes grew by $157 million. That’s according to data compiled by the North Carolina Division of Public Health and the North Carolina Department of Revenue, which covers the first full year after the cigarette tax was increased in September 2005.

“This is good news for everyone,” said State Health Director Dr. Leah Devlin. “Cigarette consumption is down; revenue is up. This means fewer North Carolinians and their families will face illness, disability and early death. The increased tax has improved the health of both the state’s people and its coffers.”

According to Devlin, research shows that for every 10 percent increase in the tax there is a 4 to 7 percent drop in smoking rates with the largest effect on youth.

The cigarette tax increased from five cents to 30 cents on September 1, 2005. An additional five cents was also added on July 1, 2006, bringing the state cigarette tax up to its current rate of 35 cents. The current national average is a tax of $1.07 per pack of cigarettes. The Centers for Disease Control now estimates that smoking-caused health care costs total $10.28 per pack sold and consumed in the United States

In recent years, North Carolina has recorded significant decreases in the use of tobacco by young people. North Carolina’s middle school smoking rate decreased by 61.3 percent between 1999 and 2005, dropping from a rate of 15.0 percent to 5.8 percent. Similarly, North Carolina’s high school smoking rate decreased by 35.8 percent between 1999 and 2005, dropping from a rate of 31.6 percent to 20.3 percent which is consistent with the national average Adult tobacco use rates have dropped to 22.1 percent in 2006 from 25.percent in 2001, which is 2 percent higher than the national average.

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Public Affairs Office
101 Blair Drive, Raleigh, NC 27603
(919)733-9190
FAX (919)733-7447

Debbie Crane
Director