There may be hope for taxpayers in Hawaii after all. After legislators sought a massive tax hike on cigarettes, a technical flaw with HB 895, which raised the tax on smokeless tobacco products from 40 percent to 70 percent, would actually maintain the current tax rate for cigarette consumers. This probably wasn’t what tax hikers in Hawaii had in mind.
The Hawaii legislature recently passed two bills that increase the tax on tobacco products. Hawaii’s Governor Linda Lingle signed HB 1175, which increased tax on cigarettes from $2 to $3 per pack gradually over two years. She then vetoed HB 895, the tax on smokeless tobacco, but the legislature overrode her veto shortly afterwards.
However, since HB 895 became law after HB 1175, it takes precedence over any previous legislation – including HB 1175. Since HB 895 specifies the current cigarette tax rate, this means it could effectively cancel out the cigarette tax increase. It could also provide a tax holiday until September 30 for non-cigarette tobacco products.
Smokers, keep your fingers crossed and stay tuned for updates.