August 2026: South Carolina Introduces First Statewide Vape Tax Starting October 1, 2026
South Carolina will introduce its first statewide excise tax on vaping products and electronic cigarettes beginning October 1, 2026, following the passage of House Bill 4303 (Act 234). The new law brings e-liquids and disposable vape devices into the state’s tax system, aligning South Carolina’s tax framework with neighboring states such as North Carolina and Georgia.
Under the new law, consumers will pay five cents per milliliter of consumable nicotine liquid. State officials project the tax will generate roughly $14.3 million annually and all proceeds will be deposited directly into the South Carolina Medicaid Reserve Fund, which already receives the majority of revenue from the state’s existing 57-cent tax on 20-pack traditional cigarettes. Lawmakers introduced the measure in part to offset declining tax revenues from traditional cigarette sales as consumer preferences shift toward alternative nicotine products.
The legislation also establishes a reduced tax rate for non-combustible heated tobacco products compared to conventional cigarettes. While lawmakers positioned the tax as a way to bring parity to alternative nicotine products, public health groups have noted that five cents per milliliter is likely too low to curb youth vaping rates or drive smoking cessation.
June 2026: Alaska Moves to Tax Vaping Products After Years of Legislative Stalemate
Alaska is set to introduce its first statewide taxes on vaping and synthetic nicotine products after multiple earlier attempts to regulate the sector failed, including vetoed or stalled bills in previous legislative sessions. The new framework marks a significant policy shift in a state that has historically not applied a broad excise tax to e-cigarettes or vapor products. Under the approved legislation, synthetic nicotine products and nicotine substitutes will be taxed at 75% of the wholesale price under Alaska’s “other tobacco products” tax category, effective July 1, 2026. In addition, electronic smoking products and vapor products will be taxed at 25% of the retail sales price starting July 1, 2027.
The measure follows years of debate over how to regulate emerging nicotine products, with earlier proposals failing due to opposition concerns over taxation levels and regulatory scope. The new law represents a compromise approach that phases in taxation across different product categories and brings vaping products into line with other taxed nicotine goods. The legislation signals a turning point in Alaska’s tobacco policy, aligning the state more closely with a growing number of U.S. jurisdictions that now tax alternative nicotine products as part of broader public health and revenue strategies.
June 2026: Georgia Finalizes Amended Tobacco Excise Tax Rules
The Georgia Department of Revenue (DOR) has adopted amendments to the state’s tobacco excise tax regulations, formally incorporating vapor products and alternative nicotine products into its existing tax and licensing framework. The changes follow a rulemaking process launched earlier this year and are intended primarily to align administrative regulations with statutory changes enacted in recent years.
The amendments do not introduce new tax rates. Georgia continues to impose a tax of 5 cents per milliliter on closed-system vapor products, a 7% wholesale tax on open-system vapor products and single-use vaping devices, a 23% wholesale tax on large cigars, a 10% wholesale tax on smokeless and loose tobacco products, and a cigarette tax of $0.37 per pack of 20 cigarettes.
While largely administrative in nature, the revised rules provide greater regulatory clarity by integrating newer nicotine categories into Georgia’s tobacco excise tax and compliance framework.
June 2026: South Carolina Enacts New Vape Tax and Reduced Rate for Heated Tobacco Products
South Carolina has approved a significant overhaul of its taxation of alternative nicotine products, creating the state’s first excise tax on vaping products while simultaneously lowering the tax burden on heated tobacco products. The changes were enacted through HB 4303 and are scheduled to take effect on October 1, 2026. South Carolina’s new framework brings vaping products into the state’s excise tax system for the first time while establishing preferential tax treatment for heated tobacco products relative to traditional cigarettes.
Under the new law, vapor products and electronic cigarettes will be subject to a tax of 5 cents per milliliter of consumable nicotine liquid, ending South Carolina’s previous approach under which vaping products were generally subject only to sales tax. The new rate aligns South Carolina with neighboring states such as North Carolina and Georgia, both of which also tax vaping liquids at $0.05 per milliliter.
At the same time, lawmakers created a separate tax category for heated tobacco products, often referred to as “electronic tobacco devices” or heated cigarettes. These products will be taxed at a lower rate than conventional cigarettes, reflecting legislators’ view that heated tobacco products differ from combustible tobacco. Earlier versions of the legislation proposed a tax of 28.5 cents per pack of 20 heated tobacco sticks compared with 57 cents per pack of cigarettes. The final enacted legislation establishes a distinct tax rate for heated tobacco products beginning October 1, 2026.
Supporters argued that the revised structure better differentiates between combustible cigarettes and alternative nicotine products, while opponents criticized the reduction in taxes on heated tobacco products and warned that lower taxes could encourage continued nicotine use.
April 2006: Delaware Advances Broad Tobacco Tax Hike, Expands Scope to Vapes and Nicotine Pouches
Delaware lawmakers have advanced a revised bill that would significantly increase tobacco taxes and expand them to newer nicotine products, including vapes and nicotine pouches. The measure now moves to the full House for consideration and represents the state’s first major tobacco tax increase in nearly a decade, aimed at both raising revenue and reducing consumption.
Under the proposal, tax rates would increase or be newly applied across multiple product categories. The cigarette tax would rise from $2.10 to $3.60 per pack. Vapor products would be taxed at $0.10 per milliliter of e-liquid. Other tobacco products would be taxed at 40% of wholesale price, while premium cigars would be taxed at 30% of wholesale price. The tax on moist snuff would increase to $1.23 per ounce.
A key structural change is the explicit inclusion of nicotine pouches within the definition of taxable tobacco products, effectively closing a regulatory gap and broadening the tax base. The revised framework seeks to align taxation more consistently across traditional and emerging nicotine categories.
If enacted, the new tax rates are expected to take effect on September 1, 2026, with additional increases in licensing fees scheduled for 2027. While the measure is projected to generate additional state revenue, it has also raised concerns among retailers about potential cross-border purchasing and its impact on local sales. Overall, the bill signals a shift toward a more comprehensive and harmonized nicotine taxation approach in Delaware, capturing a wider range of products while materially increasing rates across most categories.
March 2026: U.S. States Move to Expand Tobacco Excise Taxes in 2026
With the 2026 state legislative session in full swing, excise taxation on cigarettes, vaping products, nicotine pouches and other tobacco-related items has emerged as a central policy focus across the United States. Faced with persistent budget pressures and declining cigarette consumption, many states are looking to tobacco and nicotine taxes as a stable source of revenue. At the same time, policymakers are increasingly seeking to extend legacy tobacco tax systems to cover rapidly growing categories such as nicotine pouches and other non-combustible nicotine products.
Lawmakers have already introduced bills in roughly twenty states aimed either at increasing existing tobacco taxes or extending them to newer nicotine formats. The policy momentum reflects two parallel trends: shrinking cigarette tax bases and the rapid rise of alternative nicotine products that historically have faced little or no excise taxation.
New York: Proposed 75% Tax on Nicotine Pouches
One of the most closely watched proposals comes from New York. Governor Kathy Hochul has proposed extending the state’s existing 75% wholesale tax on “other tobacco products” to include nicotine pouches such as ZYN and VELO. The measure is designed to offset declining cigarette tax revenue and could generate an estimated $44–57 million annually for the state budget.
Supporters argue the proposal would close a regulatory loophole by applying similar tax treatment to all nicotine products. Opponents, including retail and convenience store associations, warn that such a steep tax could sharply increase pouch prices and encourage cross-border purchases or illicit trade. The proposal has become a focal point in the broader debate about how aggressively states should tax reduced-risk nicotine alternatives.
Washington: Expanding Taxes to All Nicotine Products
Washington State has already moved ahead with a broad expansion of its tobacco tax system. Beginning January 1, 2026, any product containing nicotine—whether derived from tobacco or produced synthetically—is subject to the state’s tobacco products tax.
This policy change effectively brings nicotine pouches and certain disposable vaping products under the state’s existing tax regime, which can reach approximately 95% of the taxable sales price for many tobacco products. Legislators are also considering an additional proposal to raise the state cigarette tax by $2 per pack, a move that would further increase Washington’s already high cigarette prices.
Nebraska: Newly Introduced Tax on Alternative Nicotine Products
Nebraska is among the states that have recently expanded their tax systems to capture emerging nicotine formats. Beginning January 1, 2026, alternative nicotine products—including nicotine pouches and nicotine analog products—are subject to a tax equal to 20% of the purchase price paid by the first owner of the product.
The policy reflects a broader effort by the Nebraska legislature to modernize its tobacco tax framework by explicitly including products that do not contain tobacco leaf but deliver nicotine. Hearings in the current legislative session are exploring whether additional increases to tobacco product taxes may be necessary to support state budget priorities.
Maine: Significant Cigarette and Nicotine Product Tax Increase
Maine has implemented one of the most comprehensive tobacco tax increases taking effect in 2026. The state raised its cigarette excise tax from $2.00 to $3.50 per pack while also increasing taxes on smokeless tobacco, vapor products and nicotine pouches.
Under the new structure, vapor products and nicotine pouches are taxed at 75% of the wholesale price—up from 43% previously. The measure is expected to generate tens of millions of dollars in additional state revenue in the coming years, while public health advocates argue the higher taxes will discourage nicotine use.
Oregon: Introducing a Per-Unit Tax on Nicotine Pouches
Oregon has taken a different approach by introducing a dedicated excise tax structure specifically targeting oral nicotine products. Beginning January 1, 2026, nicotine pouch packages containing 20 units or fewer are taxed at $0.65 per package, while larger packages are taxed at $0.0325 per pouch.
The new levy operates alongside Oregon’s existing tobacco tax framework and represents one of the first examples of a state designing a product-specific tax for nicotine pouches rather than incorporating them into broader tobacco categories.
Rhode Island: Integrating Pouches into Existing Tobacco Tax Systems
Rhode Island has opted to integrate nicotine pouches into its existing tax structure for “other tobacco products.” As of October 2025, the state expanded the definition of OTP to include nicotine pouches, subjecting them to an 80% wholesale tax rate.
By simply redefining the product category rather than creating a new tax regime, Rhode Island ensured nicotine pouches would immediately face one of the highest effective tax rates applied to smokeless nicotine products in the United States.
Illinois and Other States Expanding Taxes
Other states are moving in a similar direction. Illinois recently increased its wholesale tax on tobacco and alternative nicotine products from 36% to 45%, while extending the tax for the first time to nicotine pouches.
Meanwhile, several states—including Michigan, Minnesota, Ohio, Georgia and Texas—have considered legislation to either increase cigarette taxes or expand existing excise frameworks to include newer nicotine formats such as pouches and vapor products.
A Structural Shift in Tobacco Tax Policy
The growing number of proposals reflects a structural shift in state tobacco tax policy. Historically, cigarette taxes served as the primary fiscal instrument for tobacco control and state revenue generation. However, as cigarette volumes decline and smoke-free nicotine products gain market share, states are increasingly attempting to adapt their tax systems.
The result is a patchwork of emerging policies. Some states are extending existing “other tobacco product” taxes to nicotine pouches, while others are designing entirely new tax categories or imposing per-unit excise taxes. For policymakers, the challenge lies in balancing revenue generation, public health objectives and concerns that excessive taxation could fuel illicit markets or cross-border purchasing.
As the 2026 legislative cycle progresses, additional states are likely to introduce or advance similar proposals. The direction of these policies will play an increasingly important role in shaping the economics of the U.S. nicotine market—particularly for emerging reduced-risk products that until recently faced relatively light taxation.
February 2026: Nebraska Cigarette and Vape Tax Hikes Spark Economic and Public Health Debate
Proposed legislation in Nebraska would significantly increase taxes on cigarettes and nicotine products, drawing criticism over its potential economic impact. One bill would more than double the state cigarette tax from 64 cents to $1.64 per pack, while another would fundamentally change how tobacco and nicotine products are taxed by replacing the flat per-pack cigarette tax with a 30% levy on the retailer purchase price. The same 30% rate would apply to vape products and other alternative nicotine products, up from the current 20%, raising concerns about higher consumer prices and pressure on small retailers, particularly vape shops and convenience stores.
Critics argue the proposed tax hikes would be regressive, disproportionately affecting lower-income consumers, and could fall short of revenue expectations if higher prices push consumers toward cross-border purchases, online sales, or illicit markets. There are also concerns that sharply increasing taxes on vape products could weaken incentives for adult smokers to switch to lower-risk alternatives, potentially undermining harm-reduction goals. The proposals have intensified debate in the state over how to balance public health objectives with economic consequences and tax efficiency.
January 2026: West Virginia to Raise E-Cigarette Taxes and Tighten Compliance Under House Bill 4482
West Virginia’s House Bill 4482 would significantly increase taxes on e-cigarettes and vaping products starting July 1, 2026, by raising the excise tax rate on devices, e-liquids, and related components to 50% of taxable sales price. Previously, e-liquid was taxed at $0.075 per milliliter, but the new law shifts to a much higher percentage-based excise approach. The measure also tightens administrative requirements by mandating that distributors and retailers register with the state Tax Commissioner and submit monthly reports and tax payments by the 15th of each month. In addition, penalties for late reporting increase sharply, from $25 to $500 per month, signaling a tougher enforcement stance.
The changes mark a significant shift from West Virginia’s earlier tax framework, in which e-liquid was taxed on a per-milliliter basis under the Tobacco Products Excise Tax Act. By moving to a 50 % excise rate on all vaping products and components, the bill aligns e-cigarette taxation more closely with other tobacco product taxes and is likely intended to boost state revenue and potentially discourage use. The heightened reporting and penalty requirements also reflect a push for stronger compliance and oversight within the vaping product supply chain.
January 2026: U.S. Tobacco and Nicotine Taxes Rise in Early 2026 as States Tighten Coverage of New Products
As 2026 began, several U.S. jurisdictions implemented significant tobacco and nicotine tax increases designed both to generate government revenue and to influence consumption patterns. At least five states instituted higher excise taxes on tobacco products effective January 2026, resulting in increased costs for adult tobacco and nicotine consumers that will flow through to retailers and ultimately to consumers.
Foremost among these changes is in Washington State, where legislators expanded the existing “Other Tobacco Products” (OTP) tax to cover all products containing nicotine, regardless of whether the nicotine is derived from tobacco or synthetically manufactured. Under Senate Bill 5814, this expansion subjects e-cigarettes, disposable and refillable vapes, and nicotine pouches to a 95% excise tax on the selling price, a rate that effectively doubles retail prices and creates a new reporting burden on retailers for pre-existing inventory. The tax now also applies alongside other levies such as litter taxes, tightening what had previously been a regulatory loophole for many nicotine alternatives.
Maine implemented its first tobacco tax increases in over a decade under legislation signed in 2025, with the higher rates going into effect on January 5, 2026. Cigarette taxes rise sharply from $2.00 to $3.50 per pack, while the tax on other tobacco products — including cigars and smokeless tobacco — increases from 43% to 75% of wholesale value. These changes position Maine among the states with the highest tobacco tax burdens nationwide and align excise tax structures across multiple product categories.
Hawaii raised its cigarette excise tax effective January 1, 2026, under Act 95, Session Laws of Hawaii 2025. The excise tax on cigarettes — previously 16 cents per cigarette — increased to 18 cents per cigarette (or little cigar), a modest per-unit hike that will be reflected in the cost of packs statewide. Retailers must now affix updated tax stamps to reflect the new rate, though packs with older stamps already in inventory may still be sold under certain conditions. The increase also changes how revenue from cigarette taxes is allocated, supporting health-related funds including the Hawai‘i Cancer Research Special Fund. Hawaii’s tobacco tax regime more broadly already treats other tobacco products (including cigars and smokeless tobacco) as taxable at a rate of 70% of wholesale price, and includes electronic smoking devices and e-liquids under the state’s tobacco tax definition — a measure first phased in January 1, 2024. These structural tax rules continue to apply in 2026 and influence price signals for nicotine products throughout the state’s retail channels.
Nebraska amended its Tobacco Products Tax Act so that alternative nicotine products — including nicotine pouches and ENDS containing nicotine or nicotine analogues — are now defined as “tobacco products” and subject to the tobacco products tax at 20 % of the purchase price paid by the first owner (i.e., essentially a wholesale-equivalent tax). This change is operative January 1, 2026 and represents a new tax base for emerging nicotine products in the state. The statute also updates compliance provisions and licensing rules as part of the overall Tobacco Products Tax framework.
Oregon introduced a new excise tax on oral nicotine products (e.g., nicotine pouches) that took effect January 1, 2026 under House Bill 3940. Under the law, packages with 20 or fewer consumable units are taxed at $0.65 per package, while packages with more than 20 units are taxed at $0.0325 per unit. This excise tax is reported by distributors beginning with first-quarter 2026 returns and applies alongside Oregon’s existing tobacco tax regime, which already taxes traditional tobacco products (e.g., cigars at 65 % of wholesale and moist snuff per-ounce rates).
Other states have layered in state-level reforms that affect tobacco and nicotine taxation either directly at the start of 2026 or through structural changes put in place in 2025 but operationally binding in the new year. For example, Illinois refashioned its Tobacco Products Tax Act to update definitions and require electronic filing for tax returns beginning January 1, 2026, even as broader rate increases took effect in mid-2025. In Delaware, tax reform expanded the definition of taxable nicotine products and adjusted excise tax rates on cigarettes, cigars, vapor liquids, and nicotine pouches — changes that included licensing fee updates effective January 1, 2026 after initial rate hikes in late 2025.
Collectively, the early-2026 tax adjustments reflect a broader trend among U.S. states to close regulatory gaps, align taxation across both traditional tobacco and emerging nicotine products, and bolster revenue. The impact on retail pricing, especially for synthetic nicotine and vapor products, is substantial in markets with aggressive tax regimes — with potential consequences for consumer demand, cross-border purchasing behavior, and underlying public health objectives.
November 2025: Washington will apply 95% tax to all nicotine products starting in 2026
Washington state will implement a major shift in its excise-tax structure beginning January 1, 2026, when all nicotine-containing products – regardless of whether the nicotine is tobacco-derived or synthetic – will be taxed under the state’s Tobacco Products Tax. The Washington Department of Revenue (DOR) announced that the change will replace the state’s existing vapor-products tax regime and bring e-cigarettes (vaping liquids, disposable vapes), nicotine pouches, and synthetic nicotine products under a single, value-based tax structure. Retailers and distributors are required to declare all inventory on hand at the start of 2026, and previous vapor-tax payments cannot be credited against the new liability. The update follows legislation directing that non-combustible and synthetic nicotine products be treated consistently with other tobacco categories, eliminating a long-standing tax-classification gap.
Under the new system, nicotine products will be taxed at 95% of the wholesale price, the same rate currently applied to most “other tobacco products” in the state. This represents a significant increase for many alternative nicotine products that were previously taxed either minimally or under a lower per-milliliter vapor tax. The shift is expected to raise prices across nicotine categories and increase state revenue, while standardizing tax treatment and closing loopholes that allowed newer nicotine products to avoid higher excise obligations. Compliance requirements will increase for retailers, who must update licensing and adjust point-of-sale systems as Washington aligns its tax approach with a growing national trend toward equalizing taxes across all nicotine-delivery formats.
| Product / Category | Current Tax Scheme | Tax Scheme from Jan 1, 2026 |
|---|---|---|
| Vapor products (e-cigarettes, liquids, disposables) | Volume-based vapor tax (per-mL structure) | OTP tax: 95% of wholesale price |
| Synthetic nicotine pouches and other non-combustible synthetic products | Untaxed or taxed under vapor-tax regime | OTP tax: 95% of wholesale sales price |
| Traditional OTP products (cigars, pipe tobacco, chewing tobacco, moist snuff) | Generally taxed at 95% of wholesale price or product-specific rates | Remain under OTP structure; unchanged aside from expanded coverage |
September 2025: A new Michigan bill seeks to tax new nicotine products
Michigan Senate Bill 582 seeks to amend the tobacco products tax act of 1993, expanding covered products, record keeping, taxation changes, enforcement and the distribution of revenue. The bill updates the current tax codes on tobacco and nicotine products in the state, expanding products and updating taxation and licensing requirements.
Current law covers products such as cigarettes, cigars, smokeless tobacco, pipe tobacco and wraps. With Senate Bill 582, products would include alternative nicotine products (noncombustible, nicotine-containing items not made with tobacco, such as nicotine pouches), authorized consumable material (such as e-liquids, pods and cartridges approved by the FDA) and authorized vapor products (e-cigarettes or vape devices approved by the FDA). The 32% state tax on wholesale price would be extended to the new nicotine products listed under the expansion of covered products section. The new revenue would be split evenly between the Healthy Michigan Fund and the Medicaid Trust Fund.
September 2025: Alabama cities racing against time to double tax on vape products
Ahead of the state excise tax of 10-cent-per-milliliter on vape products goes into effect in Alabama, some cities opt in to the local version to effectively double the levy, bringing the total tax to 20 cents per milliliter for vape retailers operating within city limits. If cities don’t act by October 1, 2025, they’ll lose the ability to levy the tax entirely. The October 1 deadline was added into a new state law regulating the vape industry adopted by the Alabama lawmakers. The combined taxes – both state and municipal – are scheduled to take effect October 1, 2025.
If cities do not impose their own tax, they will still get some revenue from the state portion of the tax. The 10-cent-per-milliliter state tax will send 50% of its revenues to the state’s General Fund, 25% to municipalities and 25% to county governments. The further re-allocation to the cities and counties are based on population. Cities and counties that adopt their own vape product tax will not receive a portion of the 25% allocation from the state tax. Cities that have adopted the local tax so far include Gulf Shores, Orange Beach, Foley, Dothan, Decatur, Chelsea and Muscle Shoals.
As of mid-2025, 33 states, plus the District of Columbia and Puerto Rico, have an excise tax on vapor products. In the vicinity of Alabama, Louisiana taxes vape products at 15-cent-per-milliter while Georgia’s tax is at 5-cent-per-milliliter. Tennessee began a 10% excise tax on the wholesale cost of open-system vapor products and a 7-cent-per-milliliter tax on closed-system device on July 1, 2025.
Vaping Taxes by State, 2025 | E-Cigarette and Vape Tax Rates
| State | Tax Charged | Tax per mL |
| Alabama | — | — |
| Alaska | — | — |
| Arizona | — | — |
| Arkansas | — | — |
| California | 52.92% of wholesale; 12.5% of retail | $2.26 |
| Colorado | 56% of manufacturing price | $1.47 |
| Connecticut | Closed: $0.40/mL; 10% of wholesale for other vapor products | $0.40 |
| Delaware | $0.05/mL | $0.05 |
| Florida | — | — |
| Georgia | Open: 7% of wholesale; Closed system: $0.05/mL | $0.05 |
| Hawaii | 70% of wholesale | $1.83 |
| Idaho | — | — |
| Illinois | 15% of wholesale | $0.39 |
| Indiana | Open: 15% of retail; Closed: 15% of wholesale | $0.39 |
| Iowa | — | — |
| Kansas | $0.05/mL | $0.05 |
| Kentucky | Open: 15% of wholesale; Closed: $1.50/cartridge | $0.83 |
| Louisiana | $0.15/mL | $0.15 |
| Maine | 43% of wholesale | $1.13 |
| Maryland | Open: 12% of retail; Closed: 60% of retail | $2.14 |
| Massachusetts | 75% of wholesale | $1.96 |
| Michigan | — | — |
| Minnesota | 95% of wholesale | $2.49 |
| Mississippi | — | — |
| Missouri | — | — |
| Montana | — | — |
| Nebraska | 10% retail if >3 mL; $0.05/mL if ≤3 mL | $0.05 |
| Nevada | 30% of wholesale | $0.79 |
| New Hampshire | Open: 8% of wholesale; Closed: $0.30/mL | $0.30 |
| New Jersey | Open: 10% of retail; Closed: $0.10/mL | $0.10 |
| New Mexico | Open: 12.5% of wholesale; Closed: $0.50/cartridge | $0.28 |
| New York | 20% of retail | $0.71 |
| North Carolina | $0.05/mL | $0.05 |
| North Dakota | — | — |
| Ohio | $0.10/mL | $0.10 |
| Oklahoma | — | — |
| Oregon | 65% of wholesale | $1.70 |
| Pennsylvania | 40% of wholesale | $1.05 |
| Rhode Island | Open: 10% of wholesale; Closed: $0.50/mL | $0.50 |
| South Carolina | — | — |
| South Dakota | — | — |
| Tennessee | Open: 10% of wholesale; Closed: $0.07/mL | $0.07 |
| Texas | — | — |
| Utah | 56% of manufacturing price | $1.47 |
| Vermont | 92% of wholesale | $2.41 |
| Virginia | $0.11/mL | $0.11 |
| Washington | Open: $0.09/mL; Closed: $0.27/mL | $0.27 |
| West Virginia | $0.075/mL | $0.08 |
| Wisconsin | $0.05/mL | $0.05 |
| Wyoming | 15% of wholesale | $0.39 |
| District of Columbia | 71% of wholesale | $1.86 |
April 2025: Washington mulls over increasing state tax on cigarettes by $2
House Bill 2038 and its Senate counterpart, SB 5803, seek to add an extra $2 in tax on a pack of cigarettes. If passed, Washington would leap into the top tier of states with the highest cigarette taxes, moving from $3.025 per pack to $5.025. In addition, the state tax will be tied to inflation and adjusted every three years. Other tobacco and nicotine products, including vapes and nicotine pouches like ZYN, will be taxed up to 95% of the wholesaler price. Bills also inroduce a statewide ban on the sale of all flavored tobacco and nicotine products.
With multiple bills on the table, Washington lawmakers search for solutions to patch a projected $16 billion budget deficit over the next four years.
September 2023: New York increases stae tax on cigarettes by $1
Effective Sept 1, 2023, the New York State excise tax on cigarettes increased by $1 to a total of $5.35 a pack1 – marking the first increase since July 1, 2010 when the excise tax was increased from $2.75 to $4.35 a pack. In addition, NY City has a local excise tax of $1.50 a pack (i.e. $6.85 a pack total excise plus 8.875% sales tax).
Following this increase, New York became the state with the highest cigarette tax in the US2. Currently, Missouri has the lowest cigarette tax in the US – just $0.17 per pack. More than half of all states have not increased their taxes on cigarettes in the last ten years.
Background:
The tobacco excise tax (“sin tax”) is a levy imposed on tobacco products (supposedly) to reduce tobacco consumption and to generate funding for the healthcare programs linked to tobacco use. Excise taxes constitute a large share of cigarette prices in most countries. Accordingly, both cigarette prices and the industry profitability are highly dependent on the progression of excise tax structures/levels.
Footnotes:
