States Ditching Opioid Taxes in Pursuit of One-Time Payouts

Taxing opioids once looked like the next big revenue opportunity for states. But while taxes on sports betting, marijuana, and vaping products have become common, only New York has followed through with an opioid tax, which partially backfired.

Two of the big forces behind the trend: First, most states are embracing a big, one-time payout through legal settlements with opioid manufacturers and distributors. Second, state tax and health care professionals have criticized levying what appears to be a “sin tax” on a medicine that fulfills a critical need for those who suffer from chronic pain.

“A tax on opioids isn’t ...