Delaware Democrats Propose Tobacco, Alcohol Tax Hikes

June 19, 2017

Delaware Democrats want to close the state's $400 million budget shortfall with a tax hike on cigarettes, tobacco, alcohol, and "vaping" products.

The increase would raise a projected $18.8 million and take effect in September, the News Journal reported.

The tax on a six-pack of beer would go up 12 cents, to 21 cents; the tax on 750 ml of wine would go up 15 cents, to 34 cents; and the tax on 750 ml of hard liquor would go up 15 cents, to 89 cents.

Taxes on tobacco and nicotine products would increase, too. The tax on a 20-cigarette pack would go up 50 cents, to $2.10; the tax on snuff would increase by 38 cents to 92 cents; the tax on all other tobacco products would increase from 15 up to 30 percent; and a new five-cent tax per milliliter of fluid for e-cigarettes would be imposed.

"I can't imagine anybody's happy about a tax increase, but we've got to get more revenue to avoid some of the cuts we're talking about," said Speaker of the Delaware House of Representatives Pete Schwartzkopf.

Gov. John Carney (D) for his part did not want a liquor tax hike, but did request a $1-per-pack hike on cigarettes. Carney said that he would accept changes to the budget that further addressed the shortfall.

Leaders in both parties expect that the new taxes will pass as part of a broader budget compromise.

"I think we'll come to a resolution on those two taxes," said Delaware Senate Minority Leader Gary Simpson.

But producers and sellers of alcohol were less than pleased.

"There would not only be an immediate short time impact on the bottom line of our brewers, some of whom are struggling to make ends meet, but it would particularly affect new brewers coming into the state," John Klein, president of the Delaware Brewers Guild, told the News Journal.

"I like to think that Delaware's a business-friendly state, especially a small business state. Keeping taxes lower is the path we should continue down," he said.

While smokers and purveyors of cigarettes and e-cigarettes are expected to be unhappy with the tax hike, it did earn the backing of anti-smoking groups. IMPACT Delaware Tobacco Prevention Coalition told the News Journal that it supports the hike.

"Tobacco is the number one cause of preventable death in Delaware and nationwide. This fact alone is sobering and should make the case for legislators in this state and across the nation to take appropriate action to curtail tobacco use," IMPACT's statement said.

The tax hikes, if approved, will add to $116 million in expected corporate tax increases.

Published under: Smokes , Tax Hikes , Taxes