Tobacco taxes

Evidence Rating  
Scientifically Supported
Evidence rating: Scientifically Supported

Strategies with this rating are most likely to make a difference. These strategies have been tested in many robust studies with consistently positive results.

Health Factors  
Decision Makers

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 legislation1.

Note: The term “tobacco” in this strategy refers to commercial tobacco, not ceremonial or traditional tobacco. County Health Rankings & Roadmaps recognizes the important role that ceremonial and traditional tobacco play for many Tribal Nations, and our tobacco-related work focuses on eliminating the harms and inequities associated with commercial tobacco.

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 adolescents1, 2, 3. Increasing the price of tobacco also reduces tobacco initiation among youth1.

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%1. Price increases have the greatest effect on tobacco use among Hispanics, blacks1, children, adolescents2, 3, 4, and individuals with low incomes2, 5, 6, 7.

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 another1, 8. 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 prices9, 10. Researchers suggest that minimum price laws may counteract these behaviors9, 11, 12.

Tobacco price increases can generate substantial health care cost savings and avert the cost of lost work productivity due to tobacco related illnesses1, 8.

International evidence indicates that a 50% increase in cigarette prices can often lead to a 20% reduction in cigarette consumption13

Impact on Disparities

Likely to decrease disparities

Implementation Examples

All states tax cigarettes; as of March 2021, the overall average tax is $1.91 per pack. Four states tax cigarettes at 50 cents or less per pack (Georgia, Missouri, North Carolina, and North Dakota), 22 states have taxes of $2 or more, and 10 states, Washington, DC, Puerto Rico, the Northern Mariana Islands, and Guam have taxes of $3 or more. New York State and Connecticut have the highest state tax rate, $4.35 per pack14. Most states also tax smokeless tobacco15.

Chicago and Evanston, IL have the highest combined state-local tax rates of $7.16 and $6.48 per pack, respectively14. Other high state-local tax rates also include New York City at $5.85 and Juneau, AK at $5.00 per pack14

Implementation Resources

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.

LawAtlas-Tobacco pricing - LawAtlas. Tobacco pricing strategies. 2019.

Footnotes

* Journal subscription may be required for access.

1 CG-Tobacco use - The Guide to Community Preventive Services (The Community Guide). Tobacco.

2 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.

3 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.

4 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.

5 Keeler 2020 - Keeler C, Max W, Yao T, et al. Smoking behavior in low- and high-income adults immediately following California Proposition 56 Tobacco Tax Increase. American Journal of Public Health. 2020;110(6):868-870.

6 Parks 2017 - Parks MJ, Kingsbury JH, Boyle RG, Choi K. Behavioral change in response to a statewide tobacco tax increase and differences across socioeconomic status. Addictive Behaviors. 2017;73(February):209-215.

7 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.

8 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.

9 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.

10 Choi 2017* - Choi K, Boyle RG. Changes in cigarette expenditure minimizing strategies before and after a cigarette tax increase. Tobacco Control. 2017.

11 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.

12 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.

13 World Bank Group 2017 - Marquez PV, Moreno-Dodson B, Irwin A, et al. Tobacco tax reform at the crossroads of health and development: A multisectoral perspective. World Bank Group, Washington, DC. 2017.

14 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.

15 CDC-STATE - Centers for Disease Control and Prevention (CDC). State tobacco activities tracking and evaluation (STATE) system.

Date Last Updated