Massachusetts Lawmakers Propose Higher Tobacco Taxes Despite Record-Low Smoking Rates

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Key Points:

• Legislation Introduced: Massachusetts lawmakers filed S.2020 and H.3074 (“An Act Protecting Youth from Nicotine Addiction”) to raise excise taxes on cigarettes, cigars, and smoking tobacco.

• Proposed Increases: Cigarette tax would rise from $3.51 to $4.01 per pack; cigar and smoking tobacco taxes would double from 40 percent to 80 percent of wholesale price.

• Policy Rationale: Bills aim to deter youth nicotine use – but data show record-low smoking rates among both youth and adults.

• Youth Data: 2023 YRBS found only 3.4 percent of high school students currently smoke and 0.9 percent smoke daily – the lowest ever recorded, with use down 68 percent since 2013.

• Adult Trends: Smoking among young adults (18–24) fell 81.7 percent since 2013 to just 3.6 percent in 2023 – meeting the WHO’s “smoke-free” benchmark (less than 5 percent).

• Equity Concerns: The tax hike would disproportionately hit low-income and less-educated adults, who smoke at rates 2–5 times higher than wealthier or college-educated peers.

• Economic Impact: Higher taxes risk worsening smuggling and revenue loss. Massachusetts already ranks #3 nationally for illicit cigarette consumption.

• Cross-Border Sales: After the 2020 menthol ban, state tax revenue fell 22 percent ($106 million) while New Hampshire’s rose 14 percent.

• Revenue Allocation: In 2023, Massachusetts collected $598 million in tobacco revenue but spent just $6.1 million on cessation and prevention – less than one cent per dollar.

• Takeaway: Raising tobacco taxes is unnecessary and regressive; lawmakers should invest existing funds in cessation and education to sustain progress toward a smoke-free Massachusetts.

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Companion legislation has been introduced in the Bay State to increase excise tax rates on cigars, cigarettes, and smoking tobacco.

S.2020 and H.3074 – both titled An Act Protecting Youth from Nicotine Addiction – aim to make cigarettes and other smoked tobacco products more expensive and less accessible to youth. While efforts to address youth use of age-restricted products are laudable, the legislation overlooks record lows in youth tobacco use, significant declines in adult smoking, and the regressive nature of cigarette and tobacco taxes on low-income individuals. Moreover, the proposals would likely reduce revenue as consumers purchase lower-taxed products in neighboring states.

Both bills would raise the commonwealth’s excise tax by 50 mills per cigarette to 200.5 mills, or from $3.51 to $4.01 per pack of 20. The legislation would also double the excise tax rate on cigars and smoking tobacco from 40 percent of the wholesale price to 80 percent.

While the bills are framed as protecting youth from “nicotine addiction,” smoking rates among high school students are already at record lows. According to the 2023 Youth Risk Behavior Survey, only 3.4 percent of Massachusetts high school students reported currently smoking, defined as having used cigarettes at least once in the past 30 days, and just 0.9 percent reported daily use. These are the lowest rates on record and mark steep declines over the past decade. Between 2013 and 2023, current cigarette use declined by 68.2 percent, while daily use dropped by 65.2 percent.

Adult smoking has followed the same trend. In 2023, only 3.6 percent of Massachusetts adults aged 18 to 24 were smoking – a dramatic 81.7 percent decrease from 2013, when nearly one-fifth (19.7 percent) smoked. Massachusetts young adult smoking rates now meet the World Health Organization’s definition of a “smoke-free society,” with fewer than five percent of adults smoking.

The proposed tax is also highly regressive, disproportionately burdening low-income and less-educated adults. In 2023, 18.8 percent of adults earning $25,000 or less smoked, compared to 6.8 percent of adults earning $50,000 or more. Low-income adults were 2.7 times more likely to smoke. Further, smoking rates among low-income adults have fallen more slowly than among higher earners – declining by just 1.6 percent annually between 2003 and 2023, compared to a 2.6 percent annual decline among adults earning $50,000 or more.

Similar disparities exist among less-educated adults. In 2023, 19.9 percent of adults without a high school diploma smoked, compared to 3.6 percent of college graduates. Adults lacking a diploma were 5.5 times more likely to smoke than college graduates.

Increasing the commonwealth’s cigarette and tobacco tax will likely worsen smuggling and further erode tax revenue.

According to the Tax Foundation, Massachusetts ranks third in the nation for smuggled cigarette consumption, behind only California and New York. Recent policies have already shifted cigarette sales to states with lower taxes, resulting in major revenue losses. For example, Massachusetts banned the sale of menthol cigarettes in 2020. Between 2020 and 2021, cigarette tax revenue fell by 22 percent – a loss of $106 million – while New Hampshire’s revenue rose by 14 percent during the same period. Notably, adult smoking declined more sharply in New Hampshire (down 11.5 percent) than in Massachusetts (down 4.5 percent).

Rather than increasing tobacco taxes, Massachusetts policymakers should use existing tobacco revenues to help the 554,641 adults who still smoke. In 2023, the commonwealth received an estimated $598 million in tobacco-related revenue, including more than $340 million from cigarette taxes, yet allocated only $6.1 million to tobacco control programs such as education, cessation, and youth prevention – less than one cent for every dollar received.

It is clear that higher tobacco taxes are unnecessary to address record-low youth smoking in Massachusetts. Instead of imposing additional taxes, lawmakers should better utilize existing funds to help adults quit and continue driving youth smoking rates toward zero.

Nothing in this analysis is intended to influence the passage of legislation, and it does not necessarily represent the views of Tobacco Harm Reduction 101.