Laws & Taxes

Tobacco Taxes & Payments

Cigarettes are one of the most heavily taxed consumer products in the United States. Federal, state and local governments collect more money from the sale of cigarettes than retailers, wholesalers, farmers and manufacturers combined.

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Here are some of the facts about tobacco taxes today:

  • Since 1998, governments at all levels have collected more than $528.5 BILLION in cigarette taxes (including sales tax) and payments from smokers.
  • Settlement payments, federal, and state and local taxes on cigarettes for fiscal year 2013 amounted to more than $43.9 BILLION.

– Federal excise taxes – $14,166,973,085
– State and local excise taxes – $17,182,878,658
– State cigarette sales taxes – $4,043,504,916
– Tobacco settlement payments – $8,512,945,925

  • The government per-pack profit from cigarettes in 2013 was $3.80 (or 66 percent of the cost of a pack of cigarettes); more than six times the profit of R.J. Reynolds Tobacco Company
  • Adult smokers make up about 18.1 percent of the population, yet smokers as a group are the only ones singled out for more and more “sin” taxes.
  • Cigarette tax increase proposals are made frequently – usually to fund new or expanded government programs.

– Since 2001, 48 states have increased tobacco taxes.
– Since 2000, federal taxes on a pack of cigarettes have increased 197 percent.
– Since 1998, the average cost of a pack of cigarettes has more than doubled (from $2.17 to $5.76).

Click here to see more information on cigarette taxes and payments in your state.

See how much revenue has been collected so far this year from cigarette taxes and settlement payments.

Sources: Tax Burden on Tobacco, Historical Compilation, Vol 46, Orzechowski and Walker, Arlington, VA, 2013; Behavioral Risk Factor Surveillance System (BRFSS), Centers for Disease Control and Prevention.

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