Tobacco is the most highly taxed consumer product in the United States. The tools on this page allow you to explore state tax rates and the effects tax policy and tobacco regulations can have on state revenues, smuggling, and effective tax rates for different income groups.
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Growing cigarette tax levels and differentials have made cigarette smuggling both a national problem and a lucrative criminal enterprise.
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Even if tobacco tax increases generate more revenue in the short run, the shrinking tax base guarantees long-run revenue declines.
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The excise tax family is growing. Over the last decade, several products have become subject to excise taxes or are in the process of becoming so. Given this development, it is more crucial than ever that lawmakers, businesses, and consumers understand the possibilities and, more importantly, limitations of excise tax application.
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This web tool allows taxpayers to see how cigarette tax revenues have changed since 1955. Across almost all states, a clear pattern of volatility emerges. Tax rate hikes are met with a momentary bump in revenue, followed by a falloff.
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New nicotine products, along with a greater consciousness about the dangers of smoking, have prompted millions to give up smoking. This has contributed to federal and state excise tax collections on tobacco products declining since 2010. Our new report outlines the best way to tax nicotine products based on health outcomes and revenue stability.
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Excise taxes are regressive, and other alternatives are frequently available to incentivize behavior change.
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The State Tax Competitiveness Index enables policymakers, taxpayers, and business leaders to gauge how their states’ tax systems compare. While there are many ways to show how much state governments collect in taxes, the Index evaluates how well states structure their tax systems and provides a road map for improvement.
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Creative destruction—coined by famed economist Joseph Schumpeter—is the idea that new innovations disrupt and “destroy” existing economic structures as they create better and more efficient products and processes.
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Countries and global organizations should recognize the harms caused by cigarette smuggling and the fact that this illicit trade is a direct result of exorbitant tax policies.
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Cigarette smokers in the European Union pay far more in excise taxes than they do for the cigarettes themselves. Our latest map illustrates the wide variance in cigarette excise taxes across EU Member States.
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Even if tobacco tax increases generate more revenue in the short run, the shrinking tax base guarantees long-run revenue declines.
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Growing cigarette tax levels and differentials have made cigarette smuggling both a national problem and a lucrative criminal enterprise.
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The European Commission proposed new budget options for 2028 to 2034. It is worth zooming in on one new proposal for revenues that would support EU-level spending. The “Corporate Resource for Europe,” or CORE, provides a good opportunity to think through how best to raise revenue for the EU budget.
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Summer has arrived, and states are beginning to implement policy changes that were enacted during this year’s legislative session (or that have delayed effective dates or are being phased in over time).
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The vaping industry has grown rapidly in recent decades, becoming a well-established product category and a viable alternative to cigarettes for those trying to quit smoking. US states levy a variety of tax structures on vaping products.
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Instead of doubling down on a shrinking tax base, Ohio lawmakers should instead look towards tax solutions that secure the state’s long-term fiscal health.
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New leadership at the FDA will have the opportunity to revisit decisions that have shifted consumption to illicit products and discouraged harm reduction—policies that, however well intended, have come at a significant cost in lives.
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Among the many other tax proposals being considered in Washington this year, policymakers have proposed separate bills that would impose a carbon tax on cigarettes and implement a state-wide flavor ban on tobacco products.
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Facts & Figures serves as a one-stop state tax data resource that compares all 50 states on over 40 measures of tax rates, collections, burdens, and more.
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An update to the EU’s Excise Tax Directive that embraces harm reduction principles would save lives and provide a steady stream of revenue to support public health expenditures.
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Thirty-nine states will begin 2025 with notable tax changes, including nine states cutting individual income taxes. Recent years have seen a wave of significant tax reforms, and the changes scheduled for 2025 show that these efforts have not let up.
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The US already has massive problems with cigarette smuggling. A cigarette prohibition would be devastating to tax coffers while pushing smokers toward what could become the world’s largest illicit market.
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Tax avoidance is a natural consequence of tax policy. Policymakers should consider the unintended consequences, both to public health and public coffers, of the excise taxes and regulatory regimes for cigarettes and other nicotine products.
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Growing cigarette tax levels and differentials have made cigarette smuggling both a national problem and a lucrative criminal enterprise.
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Over 500 million premium cigars were sold in the United States in 2023. With each sale comes a complex tax landscape.
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