Cigar tax by state ranges from nothing at all in Florida, Pennsylvania, and New Hampshire to 95 percent of the wholesale price in Washington and Minnesota. Most states sit somewhere in between, charging a percentage of the wholesale cost, and roughly seventeen of them cap the tax on any single cigar so premium smokes do not carry a runaway bill. A federal excise tax applies everywhere on top of whatever the state charges.
States With No Cigar Excise Tax
Three states impose no state excise tax on cigars: Florida, Pennsylvania, and New Hampshire.
Florida’s tobacco products tax statute explicitly excludes cigars from its definition of “tobacco products.” The state charges 25 percent wholesale on loose tobacco, snuff, chewing tobacco, and similar products, but cigars are carved out of that definition entirely.1The Florida Legislature. Florida Statutes Title XIV Chapter 210 Pennsylvania takes a similar approach: its tobacco products tax covers smokeless tobacco, pipe tobacco, roll-your-own tobacco, and e-cigarettes, but specifically excludes cigars.2Pennsylvania Department of Revenue. Tobacco Products Taxes New Hampshire also exempts premium cigars from its tobacco tax.
One caveat on Pennsylvania. Philadelphia charges $0.036 per cigar sold within city limits, so the state exemption does not follow you into that city.
States With the Highest Cigar Tax Rates
At the top of the range, several states tax cigars at rates that can nearly double the wholesale price before the retailer’s markup.
Washington and Minnesota both impose 95 percent of wholesale. Washington applies this rate to all tobacco products under RCW 82.26.020,3Washington State Legislature. RCW 82.26.020 – Tax Imposed and it caps the per-cigar tax at $0.65. Proposed legislation, HB 2382, would raise that cap to $0.85 effective July 2026.4Washington State Legislature. House Bill 2382 Minnesota matches the 95 percent rate but caps the tax on premium cigars at $0.50 each.5Minnesota Office of the Revisor of Statutes. Minnesota Statutes Section 297F.05 – Rates of Tax
Vermont taxes cigars at 92 percent of wholesale with a tiered cap: $2 per cigar for most, and $4 per cigar when the wholesale cost exceeds $10. Utah imposes 86 percent of wholesale with no per-cigar cap, which makes it the most punishing state in the country for expensive cigars. Rhode Island charges 80 percent of wholesale, capped at $0.50 per cigar. New York and Alaska both tax at 75 percent of wholesale with no cap.
The District of Columbia and Wisconsin each sit at 71 percent, with Wisconsin capping at $0.50. Arkansas taxes at 68 percent with a $0.50 cap and adds another 2 percent of the manufacturer’s invoiced selling price on top.
Mid-Range and Lower-Tax States
A large group of states falls in the 20 to 65 percent range.
Oregon charges 65 percent of wholesale, capped at $1.00 per cigar. Colorado sits at 56 percent with no cap. California adjusts its tobacco products tax rate annually to match the burden placed on cigarettes; that rate has landed around 52.92 percent of wholesale in recent years, set under Revenue and Taxation Code Section 30123.6California Legislative Information. California Revenue and Taxation Code Section 30123 Iowa and Connecticut both charge 50 percent, each capped at $0.50 per cigar. Montana also sits at 50 percent, capped at $0.35.
Lower still: Idaho at 40 percent (capped at $0.50), Michigan at 32 percent (capped at $0.50),7Michigan Legislature. Michigan Compiled Laws 205.427 – Levy of Tax on Sale of Tobacco Products and Nevada at 30 percent (capped at $0.50). New Mexico sits at 25 percent and Indiana at 24 percent, both with caps. Ohio charges 17 percent (capped at $0.64), and North Carolina charges 12.8 percent with the lowest cap in the country at $0.30 per cigar.
How the Percentage and Cap Actually Work
Most states use an ad valorem tax, meaning a percentage of the wholesale price. A state charging 50 percent on a cigar with a $5 wholesale cost collects $2.50. When the wholesale price rises, the tax rises with it, which hits premium cigars harder than budget ones.
A per-cigar cap sets a ceiling. Michigan taxes cigars at 32 percent of wholesale. On a cigar with a $3 wholesale price, the raw calculation is $0.96, but the $0.50 cap limits the actual tax to $0.50. On a $1 wholesale cigar, the 32 percent calculation comes to $0.32, which sits below the cap, so you pay the full percentage. The cap only kicks in once the cigar is expensive enough for the percentage to exceed it.7Michigan Legislature. Michigan Compiled Laws 205.427 – Levy of Tax on Sale of Tobacco Products
Most capped states set the limit at $0.50 per cigar: Connecticut, Idaho, Iowa, Minnesota, Nevada, New Mexico, Rhode Island, and Wisconsin. North Carolina’s $0.30 is the lowest. Montana caps at $0.35. Indiana and Oregon go to $1.00. Ohio sits at $0.64. Vermont has the highest at $2 for most cigars and $4 for those with a wholesale cost above $10.8Centers for Disease Control and Prevention. STATE System Excise Tax Fact Sheet
States without caps, like Utah, New York, and Alaska, let the percentage run unchecked. A cigar with a $20 wholesale cost in Utah faces $17.20 in state tax with no ceiling. For premium buyers, the presence or absence of a cap matters more than the headline rate.
One more distinction worth knowing. States draw a sharp line between “little cigars” (cigarette-sized, often filtered, sold in packs of twenty) and “large cigars.” Roughly half the states tax little cigars at the cigarette rate rather than grouping them with other cigars, so the rates above apply to large cigars.
The Federal Excise Tax Underneath
Before any state tax enters the picture, the federal government takes its cut under 26 U.S.C. ยง 5701. Small cigars (weighing no more than three pounds per thousand) are taxed at $50.33 per thousand, roughly five cents each. Large cigars are taxed at 52.75 percent of the manufacturer’s sale price, capped at 40.26 cents per cigar.9Office of the Law Revision Counsel. 26 USC 5701 – Rate of Tax
The federal cap matters for premium buyers. A cigar selling for $20 at the manufacturer level would technically owe $10.55 at 52.75 percent, but the cap limits the federal bite to 40.26 cents. The manufacturer or importer pays this before the cigar reaches a wholesaler, so consumers never see it as a line item. It is baked into the price.
Local Taxes Can Add Another Layer
State rates do not always tell the full story. Some cities and counties impose their own tobacco taxes. Philadelphia charges $0.036 per cigar even though Pennsylvania exempts cigars at the state level. Cook County (Chicago) and New York City also impose local tobacco taxes that stack on top of state rates.
Local tobacco taxes are less common than state-level ones and tend to appear in large urban areas. They are usually modest compared to the state rate, but for frequent buyers the added cost adds up.
Buying Online From Another State
When you buy cigars online from an out-of-state retailer, the seller may not collect your state’s excise tax at the time of sale. In that case, you are legally required to self-report the purchase and pay a use tax to your state’s revenue department. The use tax rate matches your state’s cigar excise rate, and most states expect these reports quarterly.10California Department of Tax and Fee Administration. Cigarette and Tobacco Products Excise and Use Tax Return
Compliance in practice is low, but the exposure is real. States can assess back taxes, interest, and penalties on unreported purchases, and some have gotten more aggressive about cross-referencing shipping records from online tobacco retailers against consumer filings.
One difference from cigarettes: cigars are not covered by the federal PACT Act’s mailing prohibition. Cigarettes and smokeless tobacco cannot ship through the U.S. Postal Service, but cigars can.11U.S. Customs and Border Protection. Mailing Tobacco Products to the United States Through the Postal Service and Other Carrier Services Some states ban direct-to-consumer tobacco deliveries entirely regardless of federal rules, so the delivery route depends on where you live.
Cigar Prices on Tribal Land
Federally recognized tribes are sovereign nations, and on-reservation tobacco sales operate under a different set of rules. Tribal members buying cigars on tribal land are generally exempt from state excise taxes. Non-tribal members who buy on a reservation technically owe the state tax, but states are limited in how they can enforce collection on sovereign land.
Roughly a third of states with tribal lands have negotiated intergovernmental compacts on tobacco taxation. Some require prepayment of excise taxes on all products entering tribal retail channels, with a refund mechanism for sales to tribal members. Others use quota systems that limit the volume of tax-free tobacco available to each tribe. A handful require state tax stamps on all tobacco products including those sold by tribal retailers, and a few prohibit stamping tribally sold products altogether.
For consumers, prices on reservations are often lower than in surrounding areas, particularly in high-tax states, because tribal retailers may not collect the full state excise tax. Whether that triggers a use tax obligation on your end depends on your state’s laws and the compact in place.