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‘Sin Taxes’ Can Be Iffy Sources of State Revenue, Report Says

Oct. 8, 2019, 8:19 PM

Sin taxes, which often are viewed as “budget saviors,” play only a small role in state budgets, according to an Urban-Brookings Tax Policy Center study report.

The report, released Oct. 8, argues that lawmakers should be mindful of the limitations behind sin tax revenue, which has been weak since the Great Recession of 2007-09. The taxes accounted for 4.8% of total state general revenue in 2017.

  • According to the report, between fiscal years 2008 and 2017, state revenue from sin taxes grew only 6.3%.
  • The report identifies taxes on vapor products as a...
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