New York Loses $400 Million After Imposing The Nation’s Highest Cigarette Tax

New York is reaping the whirlwind of sky-high cigarette taxes with a wave of smuggling decimating the state’s revenue.

New York holds the dubious honor of having the highest cigarette taxes in country, with the average pack of smokes in New York City costing as much as $10.60.

New York raised taxes on cigarettes to $4.35 in 2010 from $2.75. In total, cigarette taxes have increased by 190 percent since 2006. The sharp rise has resulted in a raft of unintended consequences which are dealing a significant blow to the state’s finances.

New York State Comptroller Thomas DiNapoli reports New York’s revenue from cigarette taxes has plunged by $400 million over the past five years.

According to the The New York Post, a separate study by National Academies of Sciences, Engineering, and Medicine shows the state lost a hefty $1.3 billion in uncollected taxes each year because smokers switched to cheaper alternatives.