Maryland Information
Tobacco Taxes
Maryland's excise tax per pack of cigarettes: $1.000
Maryland's excise tax collection for the
fiscal year ending June 2002: $206,237,000
Sales tax on tobacco products: 5.00%
Federal excise tax per pack of cigarettes: $0.39
Total federal excise tax collections in fiscal year 2002: $7,512,700,000
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Who Profits from
Cigarette Sales? 
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Comparing Excise Taxes on Cigarettes, Beer and Wine
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Number of six-packs of beer that must be sold in Maryland to produce the same state excise tax revenue generated by one carton of cigarettes: 197.5 |
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Number of bottles of wine that must be sold in Maryland to produce the same state excise tax revenue generated by one carton of cigarettes: 126.2 |
Maryland Smokers' Contributions
to the State Economy - FY2002
In 2001, Maryland smokers comprised only 21.1%1 of the adult population in the state. Here is what they already pay because they choose to buy a legal product:
Smokers Pay Excise Taxes2 |
$ |
206,237,280 |
Smokers Pay Sales Taxes2 |
$ |
54,176,580 |
Smokers Pay Tobacco Settlement Payments3 |
$ |
161,576,958 |
|
$ |
421,990,818 |
Smokers' Economic/Tax Profile 2001
Maryland smokers' median household income |
$ |
42,489 |
Maryland nonsmokers' median household income |
$ |
53,456 |
- Working Families Pay More1
26.4% of Maryland smokers had household income LESS THAN $25,000
21.1% of Maryland smokers had household income EQUAL TO or GREATER THAN $75,000
The impact of smoker payments on the incomes of working families was more than THREE TIMES the impact on higher income smokers. Those who can afford it least pay a disproportionate percentage of their hard-earned income in smoker payments.
- Smoker excise tax/sales tax/tobacco settlement payments liability in 20024
Total average paid per Maryland smoker in excise and sales taxes |
$ |
313 |
Cost per Maryland smoker for settlement payments to Maryland |
$ |
194 |
Total annual payments to Maryland per smoker |
$ |
507 |
Total annual payments to Maryland per nonsmoker |
$ |
0 |
Maryland Smoker Facts 5
- Total smokers' payments to Maryland in FY2002 were:
- More than sixteen times as large as FY2002 state excise taxes on alcoholic beverages ($25.7 million).
- Larger than FY2002 corporate net income taxes ($359.2 million).
- Total smokers' payments for FY2002 were large enough to support:
- Maryland's FY2003 operating budget appropriations for the Department of State Police ($290.5 million)
OR
- The Department of Aging ($45 million) AND Maryland Children's Health Program ($162.6 million) AND Child Welfare Services ($137.5 million) COMBINED
OR
- The Maryland Port Administration ($182.98 million) AND the Department of Natural Resources ($222.7 million) COMBINED.
- In 1997, smokers provided 7,210 jobs that paid an additional $15.5 million to the state in personal and corporate income taxes.6
TOTAL SMOKER CIGARETTE PAYMENTS TO MARYLAND
FY2002 |
|
Per year: |
$ |
421,990,818 |
Per day: |
$ |
1,155,348 |
Per hour: |
$ |
48,139 |
Per minute: |
$ |
802 |
Per second: |
$ |
13 |
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CIGARETTES DON'T PAY TAXES -
MARYLAND SMOKERS DO!!
1 Centers for Disease Control's Behavioral Risk Factor Surveillance System, 2001
2 Orzechowski & Walker, Arlington, Virginia; from state revenue department
3 PriceWaterhouseCooper
4 U.S. Census Bureau, 2000 state population and Centers for Disease Control's Behavioral Risk Surveillance System, 2001
5 Tax and Budget Comparisons are from the U.S. Census Bureau and Maryland Dept. of Budget and Management, FY2003 Fiscal Digest. Online at: http://www.dbm.maryland.gov/DBM%20Taxonomy/Budget/Publications/Fiscal%20Digest/TOC_FY2003_Fiscal_Digest.htm.
6 American Economics Group, Inc., The U.S. Tobacco Industry in 1997: Its Economic Impact in the States.
Master Settlement Agreement Payments To Date
$535,099,334 has been paid to Maryland since the Master Settlement Agreement was signed on November 23, 1998.
A summary of Maryland state law is provided below
(for specific questions regarding state law, contact your legal advisor.)
Minimum Age |
Customers must be 18 years or older to purchase tobacco products.
The purchase of tobacco products on behalf of a minor is prohibited. Distributing a coupon redeemable for tobacco products to a minor is prohibited. Violators will be subject to a fine of up to $300 for the first offense, up to $1,000 for the second offense within two years, and up to $3,000 for third and subsequent offenses within two years. The sale or offer for sale of clove cigarettes is prohibited. Violators will be guilty of a misdemeanor and subject to a fine of $ 500. |
Restricted Products |
Any substance containing tobacco, including cigarettes, cigars, smoking tobacco, snuff, smokeless tobacco, cigarette rolling papers and candy-like products that contain tobacco. |
Acceptable Forms of Identification |
Driver’s license or other valid identification issued by an employer, a governmental entity, or institution of higher education that positively identifies the purchaser as being at least 18 years old. |
Fine/Penalty Schedule for Selling to Minors |
Employees may be fined up to $300 for the first offense, up to $1,000 for the second offense within two years, and up to $3,000 for third and subsequent offenses within two years. |
Affirmative Defense |
It is a defense to the sale or distribution of tobacco products to a minor that the defendant examined the purchaser’s identification. |
Minor Possession |
Possession or use of tobacco products or cigarette rolling papers by minors is prohibited, except during the course of employment. Obtaining or attempting to obtain a tobacco product or cigarette rolling papers by using a form of identification that is falsified or identifies an individual other than the minor, is prohibited. Violators shall be issued a citation. |
Sign Requirement
 |
None. |
Compliance Checks |
As a condition of receiving federal substance abuse block grant funds, federal law requires the State of Maryland to conduct random, unannounced inspections of tobacco outlets to determine compliance rates. Compliance inspections are conducted by the Department of Health and Mental Hygiene, Alcohol and Drug Abuse Administration (ADAA). Minors used in the inspections are employees of ADAA and are instructed not to complete the sale and not to touch the tobacco. |
DISCLAIMER: This information summary is provided as a service of the Coalition, but is not intended to provide legal advice or analysis. These summaries are not intended to be complete representations of state law, which may contain additional rules and restrictions relating to tobacco products not mentioned in this summary, as well as retailing prohibitions related to matters including, but not limited to, state required training, minimum pack size, the sale of loose cigarettes and other restrictions. Retailers should not rely on these summaries as complete or accurate descriptions of applicable federal, state or local law. Users with questions about the law should seek the advice of counsel. Each state law is unique and possibly represents multiple legislative or regulatory acts. Local laws may differ. Check with local authorities for variations from state law. These summaries are not intended to be complete representations of state law. |
The reprinting of this information from the Coalition, does not constitute a representation or admission by RJRT that such information is accurate, complete, or a proper characterization of the laws concerned. The Coalition for Responsible Tobacco Retailing is a cooperative effort among retailers, wholesalers and manufacturers who share a common goal: to do all they can to prevent tobacco sales to minors.
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