The Best and Worst States To Be a Smoker

A smoker landing at John F. Kennedy International Airport in New York City would have to pay $19 for a pack of Marlboros. If that same smoker drove a few hundred miles south to North Carolina, he would pay less than half that price.

The same product could have vastly different prices depending on where in the country you are. The difference has little to do with the cigarettes themselves. It is almost entirely the result of tax policy.

Tobacco is the most highly taxed consumer product in the United States. Cigarettes are taxed at the federal, state, and local levels. On average nationwide, taxes make up nearly half of the retail price. In New York and Washington, D.C., more than 60 percent of what consumers pay is due to taxes.

According to data collated by the Tax Foundation, Chicago imposes the highest combined tax burden on cigarettes in the United States. Smokers there pay tax at four different levels of government: a $1.01 federal tax, a $2.98 Illinois state tax, a $3.00 Cook County tax, and a $1.18 Chicago city tax—bringing the total tax burden to $8.17 on a single pack of cigarettes.

Coming in second is New York City, where high state taxes, city taxes, and pricing rules make it one of the most expensive places in the country to buy cigarettes. The state has the highest state cigarette tax at $5.35 per pack, and New York City imposes an additional $1.50 tax. Those levies have spawned illicit activity. New York ranks second on the list of states with the most inbound cigarette smuggling. The Tax Foundation estimates that in 2023 New York lost more than $800 million in tax revenue due to black market sales.

Low-tax products often find their way into high-tax states. In 2023, California, which levies a $2.87 tax per pack, was the biggest importer of smuggled cigarettes: About 53 percent of cigarettes consumed in California were purchased illegally or in other states.

In 2022, California adopted Prop 31, a regulation restricting the sale of flavored tobacco products, including menthol cigarettes, causing a surge in smuggling. In a 2023 study for Altria, WSPM Group collected 15,000 discarded cigarette packs across major California cities and found that more than a quarter were foreign (27.6 percent) or illicit (0.1 percent) products.

A pack-a-day smoker in New York City might pay up to $7,000 a year for cigarettes, according to Tobacco Insider, with taxes accounting for $2,500 of that total. The tax burden is even heavier in Chicago, the U.S. city with the highest combined local, state, and federal excise taxes: nearly $3,000 a year for a pack-a-day smoker.

At the other end of the spectrum, smokers in the South and the Great Plains pay a fraction of what their fellow citizens in New York City, Chicago, and California pay. Missouri’s tobacco excise tax is just 17 cents per pack, the lowest of any state. That rate has not changed since 1993. North Carolina’s tobacco tax is 45 cents per pack. A pack-a-day smoker in North Carolina might spend $3,200 a year on cigarettes, about $3,700 less than a smoker in New York City does.

In some states, cigarettes remain an ordinary legal product. In others, lawmakers have turned them into a luxury good through taxation. But wherever taxes become punitive enough, smokers often respond the same way other consumers do: They shop elsewhere, cross borders, or turn to the black market.

Source: World Population Review