States Profiting the Most From Sin

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5. New Hampshire
> Pct. total revenue from sin: 5.8%
> Revenue from sin: $480.2 million (35th highest)
> Most profitable sin: Tobacco
> Lottery proceeds: $79.4 million (35th highest)

No state collected a greater share of its revenue from tobacco taxes than New Hampshire. Over 2.4% of the state’s $8.3 billion in revenue came from excise taxes on tobacco. For context, the average share among all states is 0.7%, and the second largest share of tobacco tax revenue is 1.6% in Rhode Island.

Liquor is also a major contributor to the New Hampshire’s revenue. New Hampshire has the second highest share of its revenue coming from alcoholic beverage license taxes as well as liquor store profits, at 0.2% and 1.7%, respectively.

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4. Delaware
> Pct. total revenue from sin: 6.6%
> Revenue from sin: $531.2 million (31th highest)
> Most profitable sin: Lottery
> Lottery proceeds: $240.7 million (24th highest)

Delaware is one of just four states in which sin taxes make up more than 6% of total revenue. Almost 3%, or over $240 million in 2016, of the state’s total revenue came from lottery proceeds, the third highest share among states. Lottery revenue amounted to more than 45% of sin taxes the state collected that year.

A relatively high share of about 1.2% of Delaware’s revenue comes from tobacco products. Only a handful of other states derive a larger share of their revenue from tobacco.

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3. Nevada
> Pct. total revenue from sin: 6.7%
> Revenue from sin: $1.1 billion (19th highest)
> Most profitable sin: Gaming
> Lottery proceeds: N/A

It should come as no surprise that Nevada, home to Sin City, ranks highly among states profiting the most from sin. Sin taxes provide 6.7% of Nevada’s revenue, one of the highest shares of all states. Of the $1.1 billion in annual revenue Nevada makes in sin taxes, more than $900 million come from gaming. Nevada has over 300 casinos.

Nevada ranks only third in terms of total tax revenue gained from gaming, behind the more populous states of Pennsylvania and New York. The state has the 19th highest total revenue from sin taxes at $1.1 billion, despite having the 33rd largest population among states. Nevada is one of just a handful of states that has no state-run lottery.

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2. West Virginia
> Pct. total revenue from sin: 6.9%
> Revenue from sin: $953.1 million (21th highest)
> Most profitable sin: Lottery
> Lottery proceeds: $501.6 million (17th highest)

West Virginia gets more than 3.6% of its total revenue from lottery proceeds — more than triple the 1.1% average among states. The state pulled in more than half a billion dollars from the lottery in 2016, making up more than half of the revenue it collected from all sin taxes.

West Virginia collects about 0.6% of its revenue from taxes on tobacco products, below the 0.7% national average. This is somewhat surprising considering the state has the highest adult smoking rate, at 24.8%. West Virginia, however, has lower state cigarette excise taxes than most other states.

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1. Rhode Island
> Pct. total revenue from sin: 10.4%
> Revenue from sin: $856.3 million (25th highest)
> Most profitable sin: Lottery
> Lottery proceeds: $369.4 million (19th highest)

At 10.4%, Rhode Island derives by far the largest share of its revenue from sin taxes, several percentage points above the next closest state. Despite having barely over 1 million residents, Rhode Island pulled in over $856 million from sin taxes in 2016.

Like many other states, Rhode Island’s biggest sin tax contributor to its revenue is the lottery. The state made over $369 million in lottery proceeds in 2016, accounting for 4.5% of the state’s total revenue that year — the highest share of any state by far. Nearly 1.6% of the state’s 2016 revenue came from taxes on tobacco products, more than double the 0.7% average among states. This may be due in part to the fact that Rhode Island’s cigarette excise tax rate of 4.3% is one of the highest of all states.