Tobacco taxes are set to increase in Indiana Tuesday, July 1, marking the first tax hike on the product in almost 20 years. Photo from Unsplash.

News Release

INDIANAPOLIS — Up for a smoke? It’ll cost an extra dollar, starting Tuesday, July 1.

During Indiana’s legislative session earlier this year, legislators okayed the first tax increase on tobacco products in almost two decades. Taxes on every cigarette pack sold in-state will now include $2 in taxes, almost double what it was previously.

All tobacco products, including chewing tobacco and vapor-based products such as vapes and e-cigarettes are affected.

The tax hike, introduced and eventually included in the 2025-27 state budget, was initially opposed by many Republican lawmakers. An eleventh-hour projection revealing a $2.4 billion shortfall changed attitudes, however, as the state scrambled to offset incoming deficits.

Currently, the $1 “vice tax” on tobacco is set to add $400 million a year to state coffers.