Judging by state tax receipts, smoking appears to be down in Illinois – but it’s hard to say by how much. The cigarette tax rose from 98 cents to $1.98 on July 1, 2012 – a 102 percent increase. In the fiscal year that followed, cigarette tax collection rose only 40 percent, suggesting sharply lower sales. But Kathy Drea, vice president of advocacy for the American Lung Association of Illinois, says hoarding of cigarettes and tax stamps before the tax went up skews the numbers.
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“We know that the retailers were hoarding product perhaps even for as long as three years before the cigarette tax bill finally passed. We also know that some wholesalers bought millions of dollars’ worth of tax stamps before the law took effect,” she said. As a result, tax collection for the fiscal year prior to the tax increase was inflated, whereas cigarettes were sold in the following year that had been taxed in the prior year, depressing collection for Fiscal Year 2013. However, Fiscal Year 2013 showed a 45 percent increase over 2011, so some of the shortfall below a 102 percent increase appears to be due to an actual falloff in cigarette sales, according to the Illinois Department of Revenue.
Drea says there is anecdotal evidence of smokers quitting altogether or smoking less because of the price increase.