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.
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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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Later this week, the European Union is expected to release a new Tobacco Tax Directive, the first update in more than a decade. Early reports indicate that the EU will propose a significant increase to the existing minimum cigarette tax rates levied across the Union and expand the product categories that are taxed, including a block-wide vaping tax.
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The mix of tax sources states choose can have important implications for both revenue stability and economic growth, and the many variations across states are indicative of the different ways states weigh competing policy goals.
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The FDA’s proposal to ban flavored cigars would carry significant revenue implications for many state governments.
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New Jersey lawmakers should be weary of flavor bans after seeing the results in Massachusetts.
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If the policy goal of taxing cigarettes is to encourage cessation, vapor taxation must be considered a part of that policy design.
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Although the majority of state tax changes take effect at the start of the calendar year, some are implemented at the beginning of the fiscal year. Fourteen states have notable tax changes taking effect on July 1.
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Ireland and France levy the highest excise duties on cigarettes in the EU, at €8.85 ($10.47) and €6.88 ($8.13) per 20-cigarette pack, respectively.
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Learn more about the FDA’s proposal to ban the sale of menthol cigarettes and flavored cigars. Including its effect on revenue & public health measures.
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Lawmakers in Colorado, and in the several other states considering flavor bans, should think twice before following in the footsteps of Massachusetts. A statewide ban on flavored tobacco products is more than likely to costs millions of dollars, increase smuggling, and have a negligible effect on public health.
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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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The FDA’s expected announcement of a national ban on menthol-flavored cigarettes and cigars with a characterizing flavor would carry significant revenue implications for both the federal government and state governments, with likely limited benefits in smoking cessation.
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A recent JAMA Internal Medicine study on the impact of the Massachusetts flavored tobacco ban indicates that it has been a success. Unfortunately, it left out a very important piece of information: cross-border trade.
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More than 300 billion cigarettes are sold each year in Indonesia—making it the world’s second-largest cigarette market to China. As such, it is important how Indonesia taxes tobacco products.
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Maine’s proposal to increase tobacco and vapor taxes has at least four major issues: flawed revenue allocation, risk of increased smuggling, regressivity, and violation of the harm reduction principle.
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Lawmakers in Washington need not revisit their vapor tax. The current tax is levied at an appropriate level and it has the right tax base.
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A proposal to introduce a wholesale tax on vapor products in Alaska could make switching from combustible tobacco products very expensive for smokers.
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Indonesia, the world’s second-largest cigarette market, has a uniquely complex system when it comes to taxing its tobacco consumption, which is almost exclusively cigarettes (98 percent).
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The nicotine tax proposal in the Build Back Better Act neglects sound excise tax policy design and by doing so risks harming public health. Lawmakers should reconsider this approach to nicotine taxation.
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