Table shows all cigarette tax rates in effect now and those that will go into effect through June 30, 2009
* – Effective 4/1/2009
** – Effective 3/1/2009
*** – Tax Stamp includes 75¢ health impact fee and 27.4¢ cigarette sales tax
Table shows all cigarette tax rates in effect now and those that will go into effect through June 30, 2009. Since 2002, 44 States, DC, and several U.S. territories have increased their cigarette tax rates 84 times. The six states in bold type have not increased their cigarette tax since 1999 or much earlier. Currently, 27 states (including DC) and Puerto Rico, the Northern Marianas, and Guam have cigarette tax rates of $1.00 per pack or higher, and 13 states (including DC) have cigarette tax rates of $2.00 per pack or higher. Tobacco states are KY, VA, NC, SC, GA, and TN. States’ average includes DC, but not Puerto Rico, other U.S. territories, or local cigarette taxes. Including Puerto Rico (which has a larger U.S. population than more than 20 states and DC) raises the state average slightly. The median tax rate is $1.15 per pack. MI, MN, and UT also have special 35¢ per pack taxes or fees on brands of manufacturers not participating in the state tobacco lawsuit settlements (NPMs). The highest combined state-local tax rate is now $4.25 in New York City, with Chicago, IL second at $3.66 per pack. Other high state-local rates include Evanston, IL at $3.48 and Anchorage, AK at $3.324 per pack.
Federal cigarette tax will increase to $1.01 per pack on 3/31/09. From the beginning of 1998 through 2002, the major cigarette companies increased the prices they charge by more than $1.25 per pack (but also instituted aggressive retail-level discounting for competitive purposes and to reduce related consumption declines). In January 2003, Philip Morris instituted a 65-cent per pack price cut for four of its major brands, to replace its retail level discounting and fight sales losses to discount brands, and R.J. Reynolds followed suit. In the last several years, Philip Morris, Reynolds American, and Lorillard have increased their product prices by at least 20 cents per pack. The U.S. Centers for Disease Control & Prevention estimates that smoking-caused health costs total $10.28 per pack sold and consumed in the U.S.
The average price for a pack of cigarettes nationwide is roughly $5.01 (including statewide sales taxes but not local cigarette or sales taxes, other than NYC’s $1.50 per pack cigarette tax), with considerable state-to-state differences because of different state tax rates, and different manufacturer, wholesaler, and retailer pricing and discounting practices. AK, DE, MT, NH & OR have no state retail sales tax at all; CO, MN & OK have a state sales tax but it do not apply it to cigarettes; and AL, GA & MO (unlike the rest of the states) do not apply their state sales tax to that portion of retail cigarette prices that represents the state’s cigarette excise tax.