Indiana’s tobacco tax is a layered system: cigarettes carry a stamp tax of 14.975 cents per stick, which comes to about $2.995 on a standard 20-pack; cigars, pipe tobacco, and chewing tobacco are taxed at 24% of wholesale; moist snuff at 50 cents per ounce; and vaping products at either 30% of wholesale or 15% of retail depending on the device. Distributors pay most of these taxes before product reaches stores, hold a state registration certificate, and file monthly through the Indiana Taxpayer Information Management Engine (INTIME).
Cigarette Tax Rate
Standard cigarettes weighing three pounds or less per thousand sticks are taxed at 14.975 cents per cigarette, which produces the familiar $2.995 figure on a 20-count pack.1Indiana General Assembly. Indiana Code 6-7-1-12 – Rate of Taxation Heavier cigarettes, those exceeding three pounds per thousand, are taxed at 19.902 cents per stick, pushing a 20-pack to roughly $3.98. If those heavier cigarettes also run longer than six and a half inches, each additional two-and-three-quarter-inch segment is counted as a separate cigarette for tax purposes.
The tax is paid through adhesive stamps. Licensed distributors buy stamps from the Department of Revenue and affix one to every pack before it ships to a retailer. A discount applies at the time of purchase, but the distributor must pay by electronic funds transfer within 30 calendar days. Miss that window and the discount is forfeited, penalty and interest attach, and the Department will refuse to sell more stamps until the account is current.2Legal Information Institute. 45 IAC 8.1-1-26 – Purchase of Tax Stamps
Rates on Cigars, Smokeless, and Other Tobacco Products
Products outside the cigarette category sit in a separate chapter of the tax code and are not taxed per stick. Most are taxed as a percentage of wholesale price, with moist snuff and alternative nicotine products on a per-ounce basis.
- Cigars are taxed at 24% of the wholesale price, capped at $1 per cigar. The cap matters for premium cigars where 24% of wholesale would otherwise run well above a dollar.3Justia Law. Indiana Code 6-7-2 – Tobacco Products Tax
- Pipe tobacco and chewing tobacco are taxed at 24% of the wholesale price with no per-unit cap.
- Moist snuff is taxed at $0.50 per ounce. Fractional ounces are prorated and rounded up when the third decimal exceeds four.4Indiana General Assembly. Indiana Code 6-7-2-7-b – Tax on Distribution of Tobacco Products
- Alternative nicotine products such as pouches and dissolvables are taxed per ounce based on the manufacturer’s listed product weight.
Liability is triggered when a distributor brings these products into Indiana, manufactures them here, or ships them to retail dealers. Invoices documenting the wholesale price behind each calculation have to be kept on file.
Tax on E-Cigarettes and Vaping Products
Vaping products sit in their own chapter, and the rate depends on the delivery system. Closed-system cartridges, meaning pre-filled disposable pods, are taxed at the distributor level at 30% of the wholesale price.5Indiana Department of Revenue. E-Cigarette Compliance That rate doubled from 15% effective July 1, 2025. Open-system products, meaning refillable tanks and bottled e-liquids, are taxed at 15% of the retailer’s gross retail income and collected at the point of sale.6Justia Law. Indiana Code Title 6, Article 7, Chapter 4 – Electronic Cigarette Tax
The split matters for cash flow. Closed-system tax is paid upstream before the pods ship. Open-system tax is collected downstream at checkout. A business handling both needs separate tracking so each product hits the right tax base.
Distributor Registration Certificate
Anyone distributing tobacco products in Indiana needs a registration certificate from the Department of Revenue. The application carries a $500 annual fee and requires a $1,000 surety bond or letter of credit naming the state as beneficiary. The bond is conditioned on payment of all taxes, fines, and penalties under the cigarette tax chapter.7Indiana General Assembly. Indiana Code 6-7-1-16 – Distributors Registration Certificate, Application Fee, Bond, Refunds
Each place of business needs its own certificate, and each certificate has to be posted in a visible spot at the location it covers. The Department assigns every certificate a unique number. No one can purchase cigarette tax stamps without an active certificate, so letting the registration lapse effectively halts cigarette distribution.
Monthly Filing and Payment
Returns and payments go through INTIME on a monthly cycle. Filings are due by the 15th of the month following the reporting period, with the deadline rolling to the next business day when the 15th falls on a weekend or holiday.8Indiana Department of Revenue. Tax Filing Deadlines Each product category has its own form:
- Cigarettes: resident distributors file Form CIG-RM and non-resident distributors file Form CIG-NRM, with Form CT-19 reporting the number of cigarettes stamped during the month.9Indiana Department of Revenue. Cigarette, E-cigarette and Other Tobacco Products
- Other tobacco products: Form OTP-M with supporting transaction schedules.
- Electronic cigarettes: Form ECG-103.
All of these forms are filed electronically.
Penalties for Unstamped and Unreported Product
Indiana treats unstamped cigarettes aggressively. The Department of Revenue can seize cigarettes that lack proper stamps along with the vending machines or containers holding them. Seized product can be auctioned (the buyer then has to stamp it), destroyed, or redeemed by the original owner on payment of the full tax, a 50% penalty, and the costs of the proceeding.10Indiana General Assembly. Indiana Code 6-7-1-24 – Sale or Possession of Cigarettes Without Payment of Tax or Stamps Affixed
Criminal exposure escalates with volume and prior history. Selling or holding for sale any packages of cigarettes without Indiana tax stamps is a Class A misdemeanor, with an exception for licensed distributors and Department employees acting officially. Knowingly possessing more than 12,000 unstamped cigarettes after a prior misdemeanor conviction for possessing or selling unstamped cigarettes is a Level 6 felony. Seizure does not bar prosecution; a distributor can lose the inventory and still face charges. Late filing and late payment of any tobacco tax draw separate penalties and interest from the Department.
Federal Obligations Layered on Top
Indiana’s registration and filing requirements do not replace federal ones. Depending on the business, a federal permit from the Alcohol and Tobacco Tax and Trade Bureau may be required (there is no application fee), PACT Act registration with ATF applies to interstate shipments of cigarettes, smokeless tobacco, and electronic nicotine delivery systems, and federal rules require cigarette distributors to keep business records at the premises for three years after the close of the year they were created.11eCFR. 27 CFR 646.150 – Retention of Records Shipping tobacco to consumers is tightly restricted: the Postal Service allows only narrow exceptions, and the major private carriers have their own bans.12United States Postal Service. Domestic Shipping Prohibitions, Restrictions, and HAZMAT