Indiana’s 300% Tobacco Tax Hike Begins July 1st

Tobacco users will be paying a lot more for products beginning July 1st in Indiana.

As Hoosiers prepare for the upcoming July 4th Holiday, there will be a few changes coming to Indiana laws that folks will want to be aware of. Beginning on July 1st, 2025, Indiana will have some updated laws. These laws might be a hassle to some, while others might like the changes. There are a handful of laws that are going to be going into effect begning on July 1st. You can take a look at those by clicking here. However, one new change coming to Indiana next week will cause quite a bit of frustration to many Hoosiers.

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New Tobacco Tax Hike Begins July 1st

Earlier this year, Indiana lawmakers approved the first tax hike on tobacco products in nearly 20 years. According to Fox 59, Every pack of cigarettes sold in Indiana will now include $3 in taxes, double the previous amount. This new tax hike doesn't just include cigarettes. This increase includes all tobacco products, including vapes, e-cigarettes and chewing tobacco.

So, this bill will raise the tax on cigarettes from $1 to $3 per pack - a 300% rate increase, according to Axios. The price of a pack of cigarettes is expected to average $11 after July 1st. Other tobbaco products will have a similar increase in price. The price increase is dependent on several factors, which you can read here.

Why the Big Tax Increse for Tobacco Users?

Well, that answer is kind of obvious, right? The increased tobacco tax is estimated to net the state an additional $400 million a year. But the big reason is to encourge tobacco users to quit. We all know about the health risks of using tobacco products and public health advocates have long championed higher tobacco taxes as a means to reduce smoking rates.

According to the Indianapolis Recorder:

Research indicates that significant tax increases can lead to substantial declines in smoking, particularly among youth. For instance, a $2 per pack increase is estimated to prevent approximately 45,100 Indiana smokers from continuing the habit and deter 17,800 young people from ever starting.

 

Will this tax increase make you think twice about being a tobacco user or will it have little to no change for you?