The cigarette tax in Indiana is $0.995 per standard pack of 20, charged as a state excise tax of $0.04975 on each cigarette.1Indiana General Assembly. Indiana Code 6-7-1-12 – Cigarette Tax Add the federal excise tax of roughly $1.01 per pack and Indiana’s 7% sales tax on the retail price, and about $2.00 in excise taxes is built into every pack before the register total.
What You Pay Per Pack
Indiana sets its cigarette tax per cigarette, not per pack. At $0.04975 each, a standard 20-count pack carries $0.995 in state tax and a 25-count pack carries $1.24375. The amount doesn’t move with the brand or shelf price, because the tax tracks the number of cigarettes rather than what the store charges.
The per-cigarette rate applies to standard-weight cigarettes, meaning those weighing no more than three pounds per thousand. Heavier cigarettes are taxed at a proportionally higher rate, but nearly all commercially sold cigarettes fall into the standard category, so the $0.995-per-pack figure is what Indiana smokers actually see.
Federal excise tax sits on top. Under 26 U.S.C. ยง 5701, small cigarettes are taxed at $50.33 per thousand, about $1.01 per pack of 20.2Office of the Law Revision Counsel. 26 USC 5701 – Rates of Tax Large cigarettes are taxed at $105.69 per thousand. The federal tax is collected from manufacturers and importers, so it’s already in the wholesale price Indiana distributors pay and the retail price you pay.
Indiana’s 7% sales tax then applies at checkout to the full retail price, which already includes both excise taxes. So the combined bite on a standard pack is roughly $2.00 in excise taxes plus 7% of whatever the retailer charges.
Tax on Cigars, Snuff, and Vaping Products
Cigarettes and other tobacco products are taxed under different frameworks, so the per-pack figure above doesn’t carry over. Non-cigarette tobacco products are generally taxed as a percentage of their wholesale price:3Indiana General Assembly. Indiana Code 6-7-2-7 – Tax on Distribution of Tobacco Products and Alternative Nicotine Products
- Cigars: 24% of the wholesale price, capped at $1.00 per cigar.
- Chewing tobacco, pipe tobacco, and other tobacco products other than moist snuff: 24% of the wholesale price.
- Moist snuff: $0.40 per ounce.
- Alternative nicotine products: $0.40 per ounce by product weight as listed by the manufacturer.
The per-cigar cap means an expensive premium cigar carries a lower effective rate than a cheap one, since the tax maxes out at a dollar regardless of wholesale price.
Vaping products are taxed at 30%, but the collection point depends on the product. Closed-system cartridges (pre-filled pods) are taxed at the distribution level at 30% of the wholesale price. Open-system products, including refillable tanks, bottled e-liquid, and the devices themselves, are taxed at the retail level at 30% of the gross retail income from the sale.4Indiana Department of Revenue. E-Cigarette Compliance Both rates were raised from 15% to 30%.5Indiana Department of Revenue. General Tax Information Bulletin 206 – Other Tobacco Products Tax, Closed System Cartridge Tax, and the Electronic Cigarette Tax For the buyer, the result is the same either way: 30% is in what you pay.
The Stamp on Every Pack
Every pack of cigarettes sold legally in Indiana has to carry a physical tax stamp, an adhesive marker showing the state excise tax has been paid. Distributors buy the stamps from the Department of Revenue and affix them before the packs reach retailers.
For a consumer, the stamp is the quickest way to tell a legal pack from a contraband one. A pack sitting on a shelf without an Indiana stamp has either crossed state lines illegally or skipped the tax somewhere in the chain. The Department of Revenue can seize unstamped cigarettes along with any vending machine or container holding them, and the seized goods are forfeited to the state.6Indiana General Assembly. Indiana Code 6-7-1-24 – Sale or Possession of Cigarettes Without Stamps
Penalties for Unstamped Cigarettes
When unstamped cigarettes turn up, forfeiture is only the first consequence. The Department has three options for seized product: auction it publicly (with the buyer required to affix stamps), let the original owner redeem it by paying the full tax owed plus a 50% penalty and seizure costs, or destroy it.6Indiana General Assembly. Indiana Code 6-7-1-24 – Sale or Possession of Cigarettes Without Stamps
Criminal charges can follow. Selling or holding unstamped cigarettes for sale is a Class A misdemeanor, punishable by up to one year in jail. Licensed distributors and Department employees doing their jobs are excluded. Possessing more than 1,500 unstamped cigarettes, roughly 75 packs, is treated as evidence of intent to sell.
The charge escalates for repeat offenders. Knowingly possessing more than 12,000 unstamped cigarettes, about 600 packs, after a prior misdemeanor conviction for an unstamped-cigarette offense is a Level 6 felony, punishable by six months to two and a half years in prison. Forfeiture and criminal penalties run on separate tracks, so losing the product doesn’t close out the case.
Buying Cigarettes Online
Ordering cigarettes online doesn’t get you around the Indiana tax. The federal Prevent All Cigarette Trafficking (PACT) Act imposes strict requirements on anyone selling or shipping cigarettes, smokeless tobacco, or electronic nicotine delivery systems across state lines to consumers.7Bureau of Alcohol, Tobacco, Firearms and Explosives. Prevent All Cigarette Trafficking (PACT) Act
Remote sellers must register with the ATF and with Indiana’s tobacco tax administrators, file monthly reports for every month they ship into the state, comply with Indiana’s licensing and stamp requirements, verify buyer age, and follow specific packaging and labeling rules. The PACT Act also generally bans using the U.S. Postal Service to mail cigarettes, smokeless tobacco, and e-cigarettes to consumers. A seller who ignores these rules faces federal penalties, and Indiana can still pursue the unpaid state tax on its own.