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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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.
49 min read
People respond to incentives. As tax rates increase or products are banned from sale, consumers and producers search for ways around these penalties and restrictions.
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Several states are considering introducing or increasing taxes on vapor products to make up declining tax revenue from traditional tobacco products or to fill budget holes in the wake of the coronavirus pandemic. However, lawmakers should approach the issue carefully because flawed excise tax design on vapor products could drive consumers back to more harmful combustible products like cigarettes.
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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.
4 min read
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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Especially for a state that relies so heavily on the sales tax as a source of revenue—and where most people want to keep it that way—a broad base and a low rate is crucial.
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Explore the latest EU tobacco and cigarette tax rates, including EU excise duties on cigarettes. Compare cigarette taxes in Europe.
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As much as 98 percent of vaping products sold in the US are illicit. Most states levy an excise tax on vaping products, but these tax systems vary substantially. The result is a messy tax system covering largely illicit products, and no one knows whether taxes are being collected and remitted on most products sold nationwide.
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Summer has arrived and states are beginning to implement policy changes that were enacted during the legislative session (or are being phased in over time).
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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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Two pieces of tobacco legislation in Michigan have the potential to decrease state tax collections by $320 million per year, deter smokers from switching to less harmful products, and increase illicit trade and crime.
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Nebraskans need property tax relief and there are sound ways to provide it. However, increasing the sales tax rate to the highest in the country and dramatically increasing cigarette excises is not sound tax policy.
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While some recommendations follow the principles of sound tax policy and may improve the District’s tax climate, some proposals make the tax code more complex and less neutral, potentially disincentivizing investment and business activity.
6 min read
Thirty-four states will ring in the new year with notable tax changes, including 15 states cutting individual or corporate income taxes (and some cutting both).
17 min read
People respond to incentives. As tax rates increase or products are banned from sale, consumers and producers search for ways around these penalties and restrictions.
17 min read
It’s been almost a year since California banned the sale of all flavored tobacco products, and the big question is: did it work?
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In recognition of the fact that there are better and worse ways to raise revenue, our Index focuses on how state tax revenue is raised, not how much. The rankings, therefore, reflect how well states structure their tax systems.
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Minimum markup policies tend to be wildly unpopular among both taxpayers and policymakers. Lawmakers should carefully evaluate whether minimum markup laws are policies that improve the well-being of their constituents.
3 min read
Step into the shadows of illicit trade where taxation, incentives, and criminal networks intersect to fuel the lucrative cigarette smuggling market.
If the policy goal of taxing cigarettes is to encourage cessation, vapor taxation must be considered a part of that policy design.
3 min read