The state of Illinois is increasing taxes on tobacco products beginning July 1, reported CBS News. “Right now, it is not exactly clear how the tax will be passed onto the consumer. But vaping products and popular Zyn pouches will now be subject to a 45% tax—up from 15%,” the outlet wrote.
“It’s also going to generate $29.7 million worth of revenue for the State of Illinois," said Illinois state Sen. Javier Loera Cervantes (D-Chicago).
Sen. Javier Loera Cervantes (D-Chicago) sponsored the bill to “raise taxes on everything from cigars and chewing tobacco to vapes and nicotine pouches to 45%,” reported CBS. Cervantes claims the new taxes will generate $29.7 million worth of revenue for the state.
The Illinois Fuel & Retail Association, however, is reportedly concerned that the vape, pouch and tobacco tax could send some potential customers across state lines.
Elsewhere, New York has the highest cigarette tax in the country. The state excise tax is $5.35 per pack of 20 cigarettes, and the New York City local excise tax is an additional $1.50 per pack, resulting in a combined rate of $6.85 in New York City. New York also has a 20% tax on the retail price of vapor products.
In April, NACS Daily reported that tobacco companies are urging President Donald Trump's administration to crack down on illegal vapes, including via import bans on Chinese devices.
“Tobacco groups, including British American Tobacco (BAT) and Altria have complained that while waiting years for their own vapes or other products to get permission for sale in the U.S., some vape makers have taken substantial market share even though authorities say they are illegal to sell,” reported Reuters.
BAT estimated last year that unauthorized disposable vapes account for around 70% of almost $12.93 billion worth of U.S. vape sales annually. U.S. authorities have said these unauthorized vapes, including products made by Chinese firms, are illegal to import into the U.S. or sell there.
The FDA has so far authorized only 34 tobacco and menthol-flavored vape products for sale.