(The Center Square) – Smoking is a dangerously expensive habit, but it could get even more costly under two bills proposed Monday that would further hike the state’s higher-than-average tobacco taxes.
Rep. Kristine Reeves, D-Federal Way, proposed House Bill 1416 and House Bill 1417 with a number of other Democrat cosponsors. Both measures impose additional taxes on those already in place around cigarettes and tobacco products.
HB 1416 imposes a new $0.015 per cigarette tax, about 30 cents for a standard pack. It also raises existing taxes on most vape juices, cigars and other products. HB 1417 imposes a new $0.0015 per cigarette “embodied carbon tax,” about 3 cents a pack.
These proposals are in addition to Washington’s $3.025 tax per pack, which doesn’t include the federal tax of $1.01 per pack or state and local sales taxes. According to the Tax Foundation, Washington has one of the highest tax rates for cigarettes, with a smuggling rate of 38.6%.
“Taxation varies greatly from state to state, and large differences in prices drive smuggling,” wrote Adam Hoffer, director of Excise Tax Policy at the Tax Foundation. “Low-taxed products commonly find their way into high-tax states.”
Reeves is also pushing to ban flavored tobacco products, which could potentially expand the black market further. Meanwhile, the U.S. Food and Drug Administration is pushing to slash the amount of nicotine allowed in cigarettes.
The proposed FDA rule is intended to help smokers curb the addiction, but critics say it’ll lead to people smoking more to feel the same effect or resorting to counterfeit products altogether.
Counterfeit products are illegal and rob the federal, state and local governments of valuable tax revenue. However, those tax rates also drive up the prevalence of fakes. According to the Tax Foundation, Washington has missed out on roughly $178.8 million from cigarette smuggling.
A recent WalletHub study found that Washington ranks 12th among other states and the District of Columbia for the highest out-of-pocket cost for cigarettes. While it showed Washingtonians paying over $4,000 annually for smoking, the figure surpassed $196,000 for their entire life.
“Buying cigarettes for your entire adult life can cost you hundreds of thousands of dollars, but that number pales in comparison to the hidden costs of smoking,” WalletHub Analyst Chip Lupo wrote. “Smokers also tend to have lower wages, higher health care costs and higher home insurance premiums.”
According to HB 1416, only 50% of the resulting revenue from vape products would go toward cancer research, with the remaining half intended for public health services. However, the bill also extends to several other products, with all that revenue directed to the general fund.
HB 1417 takes a different approach. It’s an embodied carbon tax related to the emissions of certain goods. In this case, the tax could help counteract carbon emissions directly and indirectly related to the production and use of cigarettes. However, it’s unclear how.
According to the proposal, all revenue from HB 1417 would go to the state’s general fund, similar to most of that from HB 1416. However, unlike the vape products provision of the first bill, HB 1417 doesn’t require the state to appropriate the money for emission reduction efforts.
Coincidentally, both proposals come as the state anticipates a $10 billion to $16 billion revenue shortfall over the next four years, according to some Democrats.
However, the Office of Program Research, made up of nonpartisan staff for the Washington State House of Representatives, has estimated a budget shortfall of $6.7 billion for the 2027-2029 biennium.
“Over a lifetime, smokers lose out on millions of dollars they could have made if they’d invested the money they spent on tobacco,” Lupo wrote.
The Legislature referred both proposals to the House Finance Committee for first readings but has not yet scheduled public hearings. If approved, both would take effect on Oct. 1, 2025.
