The nation's first federal cigarette tax was enacted in 1864 as a Civil War revenue measure. In 2005 the federal cigarette tax stood at 37 cents per pack. The nation's first state-level cigarette excise tax was enacted in Iowa in 1921. By 1969 all 50 U.S. states had followed suit. In 2005 state-level cigarette taxes ranged from 7 cents per pack in South Carolina to $2.46 per pack in Rhode Island. The wide variety of state cigarette excise taxes provides opportunities for consumers to shop for bargains across borders—and for smugglers to make substantial profits.
Additional questions about cigarette taxes? Contact us at (202) 464-6200.
As of December 4, 2013, 22 states are full members of the Streamlined Sales Tax Project (SSTP), while two states are associate members and 26 states and the District of Columbia do not participate in the project.
Yesterday the Treasury Inspector General for Tax Administration released a report on the need to strengthen anti-fraud protection in the system that will deliver Obamacare’s premium subsidies. Roughly, the problem is...