New Jersey Assembly Bill A3722

New Jersey 2026-2027 Regular Session

• Introduced: 1/13/26
• Refer: 1/13/26

Caption

Provides phased-in increases in cigarette tax rate over four-year period.

Impact

The bill retains existing legal stipulations that dedicate a portion of cigarette tax revenue to public health initiatives, such as smoking cessation programs. Moreover, it earmarks a sizable portion of these revenues—$391.5 million—for the Health Care Subsidy Fund, which benefits acute care hospitals in the State. These funds support hospitals that provide critical services to patients, regardless of their financial circumstances, ensuring that public health infrastructure remains robust even as cigarette tax revenues increase.

Summary

Assembly Bill A3722 proposes a significant change to the existing cigarette tax structure in New Jersey by instituting phased increases to the tax rate over a four-year period. Currently, the State imposes a tax rate of $0.135 per cigarette, which translates to $2.70 per pack of 20. A3722 aims to incrementally raise this tax to $4.00 per pack by 2027. This four-step increase would begin with a $0.55 increase in 2024, followed by additional annual increases of $0.25 each year thereafter until the final rate is reached in 2027.

Contention

While the sponsors argue that the increased tax rates will not only generate additional revenue for the state but also serve as a public health measure to discourage smoking, opposition may arise from businesses and consumers concerned about the financial burden of higher taxes. Critics may argue that the increases could lead to a rise in illicit tobacco sales as smokers seek more affordable alternatives. This potential for increased black-market activity is a notable concern among various stakeholders involved in tobacco distribution and sales.