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Ore. Voters Approve Tobacco Tax Hike Measure

By Asha Glover · November 4, 2020, 12:10 AM EST

Voters in Oregon agreed to increase taxes on cigarettes and other tobacco products in 2021 under a ballot measure that passed Tuesday.

As of late Tuesday, Measure 108 was approved 67% to 33% with 86% of the votes reported. Under the new law, starting Jan. 1, the state cigarette tax rate will increase by $2 per 20-cigarette pack. Current law levies a $1.33 tax. Voters also decided that vapor products should be subject to the state's so-called other tobacco products tax, which is levied at 65% of the wholesale price.

Additionally, the state tax rate on cigars, which is currently 65% of the wholesale price but capped at 50 cents per cigar, will be modified to raise the cap to $1.

The changes are expected to raise $111 million during the 2019-21 biennium and $331 million during the 2021-23 biennium, according to a summary. The revenue will be used to shore up the state's health plan.

According to the initiative's summary, revenue estimates might be affected by the novel coronavirus pandemic because of changes in consumer spending and the pandemic's impact on smoking habits.

The measure was approved by the state Legislature in June 2019 through H.B. 2270 and placed on the ballot the next month. Rep. Andrea Salinas, D-Lake Oswego, the bill's sponsor in the House, has said that while the tax would be regressive, its benefits would overwhelmingly help lower-income residents and outweigh the costs.

The outcome is a victory for proponents of the measure, including the American Heart Association, American Lung Association and the Oregon Nurses Association.

Opponents of the bill, including the Oregon Neighborhood Store Association, had said they were concerned that the cigarette tax hike would divert sales because a large share of Oregon's cigarette revenue came from out-of-state purchasers looking for lower-priced products.

Sen. Kim Thatcher, R-Keizer, who voted against putting the measure on the ballot, had said the bill could disproportionately hurt the poor and actually cost the state revenue.

--Editing by Neil Cohen.

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