Excise Taxes

What Are Excise Taxes?
Excise taxes are special taxes often included in the final price of certain goods or services. For example, excise taxes are generally included in everyday products like gasoline and alcohol. They’re also included in services like cell phone plans and even indoor tanning. However, no consumer product or service is as heavily taxed as cigarettes and other tobacco products.

How Cigarette Excise Taxes Stack Up

When comparing the excise tax on cigarettes to other consumer goods, the difference is obvious. On average, excise taxes on cigarettes make up around 53 percent of the average retail cost. In other words, more than half of what you pay for a pack of cigarettes is due to taxes and fees.

Federal Excise Taxes

Today the average price of a pack of cigarettes in the U.S. is $6.98, of which 53% ($3.64) is government taxes and fees. In 2009, the largest federal tobacco tax increase in history raised the federal tax from 39₵/pack to $1.01/pack (totaling more than $10 a carton!).

The chart below shows how much your taxes in cigarettes and other tobacco products went up as a result of the Federal Government’s actions in 2009:

State Excise Taxes

How do taxes in your state stack up? This map shows how much each state collects for every pack of cigarettes sold. Remember, you pay these taxes in addition to the federal tax of $1.01 per pack!

Fighting Back Against Excise Tax Increases

Despite the fact that cigarettes are the most heavily taxed consumer product, lawmakers still use excise tax increases to pay for a variety of things—from local pet projects to state budget shortfalls. Consider these facts:

  • Since 2000, lawmakers at the state and federal level have  increased excise taxes on cigarettes more than 145 times!
  • In 2019, adult tobacco consumers paid more than $42.3 billion in federal, state, and local excise taxes.

That’s why Citizens for Tobacco Rights works nationwide to counter unfair and unreasonable excise tax increases on tobacco products. We are here as a resource to help you stay informed about tobacco issues that impact you and provide you the tools you need to make your voice heard by your legislators if and when risk of another excise tax surfaces.

Sources

Bill Orzechowski & Rob Walker, “The Tax Burden on Tobacco,” vol. 54 (February 2020); funded in part by Altria Client Services LLC

Bureau of Labor Statistics, “Consumer Expenditure Survey” (January 14, 2009), available from http://www.bls.gov/cex/cellphones2007.htm

Energy Information Administration, Gasoline Components History (July 2011), available from http://www.eia.gov/oog/info/gdu/gaspump.html

Tax Foundation, “States Target Cell Phones for Stealth, Burdensome Taxes” (February 18, 2011), available from http://www.taxfoundation.org/research/show/27059.html

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