Taxes at the federal, state, or local level can increase the price consumers pay for tobacco. Revenue generated from tobacco taxes may fund tobacco prevention and control interventions. Some local governments cannot enact such measures due to state preemption legislation (CG-Tobacco use).
Expected Beneficial Outcomes (Rated)
Reduced number of tobacco users
Reduced youth smoking
Increased quit rates
Reduced tobacco consumption
Other Potential Beneficial Outcomes
Reduced health care costs
Evidence of Effectiveness
There is strong evidence that increasing tobacco taxes decreases tobacco consumption and increases quit rates among adults and adolescents (CG-Tobacco use, Hoffman 2015, Wilson 2012). Increasing the price of tobacco also reduces tobacco initiation among youth (CG-Tobacco use).
Overall, effects are proportional to the amount of the tobacco price increase; a 20% increase in unit price could reduce tobacco consumption by 10%, adult tobacco use by 4%, and youth initiation by 9% (CG-Tobacco use). Price increases have the greatest effect on tobacco use among Hispanics, blacks (CG-Tobacco use), children, adolescents (Hoffman 2015, Brown 2014*, Wilson 2012), and individuals with low incomes (Hoffman 2015, Vijayaraghavan 2013*).
Price increases that are narrow in scope (e.g., apply to cigarettes but not to other forms of tobacco) appear to encourage users to substitute one tobacco product for another (CG-Contreary 2015*, CG-Tobacco use). Some studies also indicate that smokers purchase cartons or discount brands, make online purchases, or use coupons or other price minimization strategies to avoid higher cigarette prices (Pesko 2014, Choi 2017*). Researchers suggest that minimum price laws may counteract these behaviors (Golden 2015a*, Pesko 2014, Doogan 2017*).
Impact on Disparities
All states tax cigarettes; as of April 2017, the overall average tax is $1.69 per pack. Four states tax cigarettes at 50 cents or less per pack (Georgia, Missouri, North Carolina, and North Dakota), 17 states and Washington DC have taxes of $2 or more, and 8 states have taxes of $3 or more. New York State has the highest state tax rate, $4.35 per pack (CTFK-Cigarette tax). Most states also tax smokeless tobacco (CDC-STATE).
Chicago and New York City have the highest combined state-local tax rates, $6.16 and $5.85 per pack, respectively (CTFK-Cigarette tax).
PHLC-Tobacco taxation - Tobacco Control Legal Consortium (TCLC). Taxation. Saint Paul: Public Health Law Center (PHLC).
CPHSS TCLC-Brossart 2014 - Brossart L, Moreland-Russell S, Walsh H, et al. Policy strategies: A tobacco control guide. St. Louis: Center for Public Health Systems Science (CPHSS), George Warren Brown School of Social Work, Washington University, Tobacco Control Legal Consortium (TCLC); 2014.
CPHSS TCLC-Brossart 2014a - Center for Public Health Systems Science (CPHSS). Pricing policy: A tobacco control guide. St. Louis: Center for Public Health Systems Science (CPHSS), George Warren Brown School of Social Work, Washington University, Tobacco Control Legal Consortium; 2014.
HealthPartners-CHA - HealthPartners Institute for Education and Research. Community health advisor (CHA): Resource for information on the benefits of evidence-based policies and programs: Helping communities understand, analyze, and model costs.
Citations - Evidence
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CG-Tobacco use - The Guide to Community Preventive Services (The Community Guide). Tobacco.
Hoffman 2015 - Hoffman SJ, Tan C. Overview of systematic reviews on the health-related effects of government tobacco control policies. BMC Public Health. 2015;15:744.
Wilson 2012 - Wilson LM, Avila Tang E, Chander G, et al. Impact of tobacco control interventions on smoking initiation, cessation, and prevalence: A systematic review. Journal of Environmental and Public Health. 2012;2012(961724):1-36.
Brown 2014* - Brown T, Platt S, Amos A. Equity impact of interventions and policies to reduce smoking in youth: Systematic review. Tobacco Control. 2014;23(e2):e98-e105.
Vijayaraghavan 2013* - Vijayaraghavan M, Messer K, White MM, Pierce JP. The effectiveness of cigarette price and smoke-free homes on low-income smokers in the United States. American Journal of Public Health. 2013;103(12):2276-2283.
CG-Contreary 2015* - Contreary KA, Chattopadhyay SK, Hopkins DP, et al. Economic impact of tobacco price increases through taxation: A community guide systematic review. American Journal of Preventive Medicine. 2015;49(5):800-808.
Pesko 2014 - Pesko MF, Xu X, Tynan MA, et al. Per-pack price reductions available from different cigarette purchasing strategies: United States, 2009–2010. Preventive Medicine. 2014;63:13-19.
Choi 2017* - Choi K, Boyle RG. Changes in cigarette expenditure minimizing strategies before and after a cigarette tax increase. Tobacco Control. 2017.
Golden 2015a* - Golden SD, Smith MH, Feighery EC, et al. Beyond excise taxes: A systematic review of literature on non-tax policy approaches to raising tobacco product prices. Tobacco Control. 2016;25(4):377-385.
Doogan 2017* - Doogan NJ, Wewers ME, Berman M. The impact of a federal cigarette minimum pack price policy on cigarette use in the USA. Tobacco Control. 2017.
Citations - Implementation Examples
* Journal subscription may be required for access.
CTFK-Cigarette tax - Campaign for Tobacco-Free Kids (CTFK). State cigarette excise tax rates and rankings. Washington, DC: Campaign for Tobacco-Free Kids (CTFK); 2017.
CDC-STATE - Centers for Disease Control and Prevention (CDC). State tobacco activities tracking and evaluation (STATE) system.
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