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Vapor Taxes by State, 2022

Today’s map looks at the design of excise taxes for vaping and tobacco alternatives, which is important in the pursuit of harm reduction from smoking. Higher vapor taxes on products such as E-cigarettes could encourage vapors to go back to smoking cigarettes and will discourage cigarette smokers from switching to vaping products.  Since vaping entered […]

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State Tax Changes Taking Effect July 1, 2022

Although the majority of 2022 state tax changes take effect at the start of the calendar year, some are implemented at the beginning of the fiscal year. Individual and corporate income tax changes usually take effect at the beginning of the calendar year to maintain policy consistency throughout the tax year, but sales and excise […]

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Comments on Tobacco Product Standard for Menthol in Cigarettes

The Tax Foundation respectfully submits comment on the state tax and revenue implications of the proposed tobacco product standard for menthol in cigarettes. Alongside the intended consequence of limiting sales of menthol cigarettes, menthol cigarette prohibition will have a significant impact on state revenue collections, in excess of the losses associated with individuals who respond […]

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Menthol Ban Would Boost Smuggling, Reduce Revenues, with Few Health Benefits

Today, the U.S. Food and Drug Administration (FDA) unveiled long-anticipated proposed regulations banning the sale of menthol cigarettes and flavored cigars, part of ongoing efforts to support smoking cessation. Critics doubt, however, whether banning mentholated cigarettes will reduce smoking or instead simply channel menthol smokers toward other tobacco products—or smuggled menthols. And states have yet […]

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Will Colorado Spend Millions on Flavored Tobacco and Nicotine Prohibition?

A bill that would prohibit the sale of flavored tobacco and nicotine products, HB22-1064, is moving through the Colorado legislature, which undoubtedly would have a significant impact on the revenue from taxes levied on those products. Flavored tobacco and nicotine products make up a significant portion of the market: over 20 percent of cigarettes and […]

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Facts & Figures 2022: How Does Your State Compare?

How do taxes in your state compare regionally and nationally? Facts and Figures, a resource we’ve provided to U.S. taxpayers and legislators since 1941, serves as a one-stop state tax data resource that compares all 50 states on over 40 measures of tax rates, collections, burdens, and more. For visualizations and further analysis of 2022 state tax data, explore […]

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Federal Menthol Cigarette Ban May Cost Governments $6.6 Billion

This spring, the United States Food and Drug Administration (FDA) is expected to announce a national ban on menthol-flavored cigarettes and cigars with a characterizing flavor, an attempt to limit tobacco consumption, and, as a result, improve public health. But given the high level of taxation on tobacco products (on average, excise taxes alone make […]

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Massachusetts Flavored Tobacco Ban: No Impact on New England Sales

Earlier this month, JAMA Internal Medicine published a study about the impact of banning flavored tobacco products in Massachusetts. The study found, not surprisingly, that the sale of flavored tobacco decreased following the ban. By comparing sales in Massachusetts with sales across 27 other states, the authors observed that sales had decreased more in Massachusetts […]

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Indonesia Reform Simplifies Tobacco Taxes but More Work Remains

More than 300 billion cigarettes are sold each year in Indonesia—making it the world’s second-largest cigarette market to China. As such, it is important how Indonesia taxes tobacco products. Last year, I wrote about the counterproductive complexity of the country’s tobacco tax system, but in December, Indonesia announced some positive changes to the design. Effective […]

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Proposal to Raise Vapor Taxes in Washington State Gets Base and Rate Wrong

Just like last year, Washington lawmakers will consider a bill (HB 1676) which would change the vapor tax base and increase the tax rate on vapor products. Both these changes would be steps in the wrong direction, as they would negatively impact smokers’ decision to switch from more harmful combustible products to harm-reducing vapor products. […]