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How much does the U.S. collect in tax related monney from tobacco products and vaping?
Executive Summary
The United States collects roughly $19 billion annually in tobacco‑related tax revenue at the state and local level, with the overwhelming share coming from cigarette taxes and vaping contributing only a modest fraction of that total. Federal and state excise structures vary: the federal cigarette tax is $1.01 per pack, the average state cigarette tax was about $1.93 per pack as of January 1, 2024, and 33 states plus D.C. levy some form of vaping tax, producing small, highly variable revenues across states [1] [2] [3].
1. Why the $19 billion headline matters — cigarettes still dominate the tally
State and local governments collected roughly $19 billion from tobacco taxes in 2021, and that figure captures the large bulk of tobacco tax receipts coming from traditional combustible cigarettes, not novel nicotine products. Cigarette excise taxes and associated payments to states account for the lion’s share of this revenue; by contrast, vaping taxes are a recent, smaller and more fragmented stream, often generating only millions rather than hundreds of millions of dollars in a given state. This scale difference means policy debates framed around revenue must recognize that raising or altering vaping taxes will barely move the national tobacco‑tax needle compared with cigarette tax policy [1].
2. Federal and state tax architecture — high variability creates measurement challenges
At the federal level, the cigarette excise tax is fixed at $1.01 per pack, while state cigarette taxes averaged $1.93 per pack as of early 2024; other tobacco product excise rules differ considerably by product type. States use a mix of ad valorem, specific per‑unit, and wholesale taxes and some states tax vaping products by nicotine content, retail price, or cartridge/milliliter measures. This fragmented architecture complicates any single national estimate for “tobacco and vaping taxes” because collections depend on product mixes, tax bases, and enforcement practices that vary widely by jurisdiction [2] [4].
3. Vaping tax receipts — small but politically salient
Vaping taxes exist in fewer jurisdictions—33 states and D.C. had imposed excise taxes on vaping products as of mid‑2025—yet their revenue impact is limited. State examples show the modest scale: North Carolina’s vaping levy produced about $5 million in fiscal 2020 and state estimates for new vaping excise taxes typically range from $1 million to $16 million annually depending on the state and design. This evidence shows vaping taxes can generate material revenue for a state budget line item but rarely reach the scale of cigarette tax receipts at the national level [3] [1].
4. Conflicting tabulations — why some sources show higher national totals
One source notes roughly $26.9 billion from “tobacco taxes and cigarette company payments” annually, a number that exceeds the $19 billion state/local excise total because it appears to combine different revenue streams, possibly including federal excise receipts, legal settlement payments, or broader categories of tobacco‑related levies. Discrepancies across datasets arise from differences in what is counted (state vs. federal vs. industry payments), the year of measurement, and whether non‑excise revenues are included. Analysts must explicitly state scope when quoting national dollar figures to avoid conflating distinct revenue types [4] [1].
5. Fiscal volatility and policy tradeoffs — tobacco taxes aren’t steady as rock
Tobacco tax revenue is volatile: consumption declines, cross‑border purchases, tax avoidance, and product substitution blunt expected receipts over time. The policy community debates using tobacco taxes for health or budgetary purposes; public health groups advocate higher taxes to reduce consumption and fund programs, while revenue planners note that declining cigarette use and uneven vaping tax bases make future yield uncertain. These tradeoffs mean that policymakers should not assume sustained growth in tobacco tax revenue and must weigh health goals against fiscal predictability [5] [2].
6. Bottom line for the user’s question — what the U.S. collects now and what’s changing
The most defensible current estimate is that U.S. state and local governments collect about $19 billion annually from tobacco excise sources, predominantly cigarettes, while vaping taxes make up only a small slice, often measured in single‑digit millions for many states. Federal and industry payments and alternative accounting approaches can push some tallies higher (e.g., cited $26.9 billion), but those figures reflect different inclusions. For precise, jurisdictional revenue figures or a consolidated national accounting that incorporates federal excise receipts and legal settlements, analysts must consult detailed state and federal budget reports and clarifying methodology upfront [1] [4].