By PDI CStore Essentials Team on July 02, 2019

Cigarette Tax in Each State

There has been an undeniable trend in tax increases, regulations, and policy changes surrounding the distribution and sale of cigarettes. With tighter margins and dwindling volumes, it might seem easy to overlook the cigarette category and look to other tobacco products for the future.

Even with these changes, however, Convenience Store News released a 2017 report that ranked cigarettes as the No.1 sold in-house product by a very large margin. Their report indicates that cigarettes retain 29.82% of all convenience store sales.

This means that opening a new convenience store and centering your business, to some extent, around the sales of cigarettes will be an integral part of any convenience store business strategy.

Knowing the cigarette taxes in each state can help in deciding where to open your next business or expand to other parts of the country. The current US median on a packet of cigarettes is $1.66.

Below is a list for the current cigarette tax in each state.

Cigarette Tax in Each State Over $4.00

  • Connecticut $4.35
  • New York: $4.35
  • Rhode Island $4.25
  • District of Columbia $4.50

Cigarette Tax in Each State Between $3.00-$3.99

  • Hawaii $3.20
  • Massacheusettes $3.51
  • Minnesota $3.04
  • Vermont $3.08
  • Washington $3.02

Cigarette Tax in Each State Between $2.00-$2.99

  • Alaska $2.00
  • Arizona $2.00
  • California $2.87
  • Delaware $2.10
  • Maine $2.00
  • Maryland $2.00
  • Michigan $2.00
  • New Jersey $2.70
  • Oklahoma $2.03
  • Pennsylvania $2.60
  • Wisconsin $2.52

Cigarette Tax in Each State Between $1.00-$1.99

  • Arkansa $1.15
  • Florida $1.34
  • Illinoi $1.98
  • Iowa $1.36
  • Kansas $1.29
  • Kentucky $1.10
  • Louisiana $1.08
  • Montana $1.70
  • Nevada $1.80
  • New Hampshire $1.78
  • New Mexico $1.66
  • Ohio $1.60
  • Oregon $1.33
  • South Dekota $1.53
  • Texas $1.41
  • Utah $1.70
  • West Virginia $1.20

Cigarette Tax in Each State Less than $1.00

  • Alabama $0.67
  • Colorado $0.84
  • Georgia $0.37
  • Idaho $0.57
  • Mississippi $0.68
  • Missouri $0.17
  • Nebraska $0.64
  • North Carolina $0.45
  • North Dakota $0.44
  • South Carolina $0.57
  • Tennessee $0.62
  • Virginia $0.30
  • Wyoming $0.60

Local and City Taxes

Federal and state taxes made up almost half of total cigarette packet prices in 2016. And those numbers don’t include local cigarette taxes that occur in some districts or cities. In New York City and Chicago, the combination of state, federal, and local taxes can add up to $6.00 alone.

Being aware of federal, local, and state taxes will help you make informed decisions on where to expand and at what cost.

Diversifying Your Tobacco Sales

Some of the ways convenience store owners can curb the increase in taxes is by making their tobacco sales more competitive. More and more retailers are embracing pre-priced items in order to expand their cigarette and tobacco segments.

Diversifying products is also a necessity in order to embrace new customers and, without taking away from cigarette sales, appeal to an emerging audience. Moist smokeless tobacco continues to steadily grow and will bolster the tobacco selection of any convenience store.

Vapor and electronic cigarettes are another product that convenience store owners should implement in their cigarette sales strategy. Even more so than smokeless tobacco, electronic cigarettes, and vapor products are growing at faster rates every year.

Again, cigarette sales constitute to be the highest sales in convenience stores despite increases in taxes. Maintaining a robust cigarette selection while embracing alternative tobacco products will help retain customers making the switch off of cigarettes and keep your business active against the competition.

CStore Essentials is dedicated to helping convenience store owners become more informed, aware, and prepared for their business ventures. Aside from providing information on the issues relevant to your business, we also offer a cutting-edge, all-in-one backend solution for all of your managerial and transaction needs.

CStore Essentials' flexible POS system and automated reports will help you assess valuable data and manage your business anywhere, anytime. Try the free CStore Essentials demo today.

Published by PDI CStore Essentials Team July 2, 2019