Oregon’s cigarette tax is $3.33 per pack of 20, or about 16.65 cents per cigarette.1Oregon Department of Revenue. Cigarette Tax and Licensing Voters set that rate by passing Measure 108 in November 2020, which added $2.00 to the previous $1.33 per-pack tax starting January 1, 2021, and directed most of the new revenue to the Oregon Health Plan.2Oregon State Legislature. Measure 108 Tobacco Tax Increase The same measure created Oregon’s first tax on vaping products and raised the cap on cigar taxes.
What the Per-Pack Rate Covers
The $3.33 applies to every pack of 20 cigarettes sold in Oregon. Measure 108 also made it illegal to sell cigarettes in packages smaller than 20, so you won’t find legal single-pack alternatives at a lower tax.1Oregon Department of Revenue. Cigarette Tax and Licensing
Little cigars now count as cigarettes for tax purposes. Any cigars that collectively weigh three pounds or less per 1,000 units are taxed at the full $3.33 per-pack rate instead of the lower cigar rate. That change closed a loophole where manufacturers could package tobacco as “little cigars” to avoid the cigarette tax.
Taxes on Other Tobacco and Vaping Products
Non-cigarette products are taxed by wholesale price or weight rather than per pack:
- Cigars: 65% of the wholesale price, capped at $1.00 per cigar. Measure 108 raised that cap from $0.50.3Oregon Public Law. Oregon Code 323.505 – Tax Imposed on Distribution; Rate
- Moist snuff: $1.86 per ounce, with a minimum of $2.24 per retail container.4Oregon Department of Revenue. Tobacco Products Tax and Licensing
- Pipe tobacco and other tobacco products: 65% of the wholesale price.
- Vaping products, including e-liquids, pre-filled pods, and electronic nicotine delivery devices: 65% of the wholesale price. Oregon had no vaping tax before Measure 108.2Oregon State Legislature. Measure 108 Tobacco Tax Increase
Because these taxes are a percentage of wholesale price rather than a flat fee, the state collects more from premium products than from budget ones. The tax gets baked into the shelf price, so you won’t see it broken out on a receipt the way sales tax would appear in other states.
How the Tax Gets Collected
Every pack sold in Oregon must carry a state tax stamp showing the excise tax has been paid. Only licensed distributors can buy stamps directly from the Department of Revenue, and they must affix one to each pack before selling to any retailer.1Oregon Department of Revenue. Cigarette Tax and Licensing If a pack reaches a store shelf without a stamp, something has gone wrong in the supply chain, and the pack is contraband.
Who Needs a License to Sell
Oregon licenses both ends of the tobacco supply chain.
Distributors
Anyone selling cigarettes as a distributor must get a license from the Department of Revenue for each business location. The license itself is free, but distributors have to post a security bond before the Department will issue one; the bond can be set at up to twice the distributor’s estimated average monthly tax liability.5Oregon State Legislature. Oregon Code Chapter 323 – Cigarettes and Tobacco Products – Section: 323.105 and 323.110 The license stays valid until suspended or revoked, with no annual renewal.
Retailers
Since January 1, 2022, every retailer selling tobacco or vaping products in Oregon must hold a retail tobacco product license. Separate licenses are required for each location. The license carries an annual fee, and the current amount is available from the Department of Revenue. The requirement covers convenience stores, gas stations, smoke shops, and any other business selling tobacco or inhalant delivery system products to consumers.
Where the Revenue Goes
After the Department of Revenue covers its administrative and enforcement costs, cigarette tax revenue is split by statute:6Oregon Public Law. Oregon Code 323.455 – Distribution of Certain Cigarette Tax Revenues
- 89.65% to the state General Fund
- 3.45% to Oregon’s cities
- 3.45% to Oregon’s counties
- 3.45% to the Department of Transportation for transportation services for older adults and people with disabilities
The General Fund share is earmarked further. Of that 89.65%, state law directs 51.92% to the medical assistance program under the Oregon Health Plan, either maintaining benefits or expanding eligibility, and another 5.77% to the Tobacco Use Reduction Account, which funds cessation and prevention programs. Add the pieces up and the majority of cigarette tax revenue lands in healthcare and tobacco reduction, which was the central promise of Measure 108.
Penalties for Unstamped or Untaxed Cigarettes
Civil penalties for violating Oregon’s cigarette tax laws can reach $1,000 per violation.7Oregon Public Law. Oregon Code 323.480 – Civil and Criminal Penalties A late tax payment triggers a delinquency penalty of 5% of the unpaid amount, and the Department of Revenue can seize unstamped cigarettes along with the equipment used to distribute them.
Criminal penalties for unlawful distribution scale with volume, measured over a rolling 90-day period:8Oregon State Legislature. Oregon Code Chapter 323 – Cigarettes and Tobacco Products – Section: 323.482
- 12,000 cigarettes or fewer: Class A misdemeanor
- 12,001 to 60,000: Class C felony (sentencing category 3)
- 60,001 to 120,000: Class C felony (sentencing category 5)
- More than 120,000: Class B felony (sentencing category 7)
For context, 12,000 cigarettes is 600 packs, and 60,000 is 3,000 packs.
Federal law adds another layer. Under the Contraband Cigarette Trafficking Act, possessing more than 10,000 unstamped cigarettes (500 packs) is a federal crime punishable by up to five years in prison.9Office of the Law Revision Counsel. 18 USC Chapter 114 – Trafficking in Contraband Cigarettes and Smokeless Tobacco A distributor who skips the state stamp process can face a federal trafficking charge on top of Oregon’s penalties.
Buying on Tribal Land
Enrolled tribal members are not required to pay Oregon’s cigarette or tobacco products tax. The state handles this through refund agreements rather than exemptions at the register: tribal retailers buy from state-licensed distributors who have already paid the tax, and the Department of Revenue then refunds the tribal government an amount based on its estimate of purchases by tribal members.10Oregon State Legislature. 2022 Government-to-Government Activity Report Eight of Oregon’s nine federally recognized tribal governments participate.
If you’re not an enrolled member of the tribe that controls the reservation, you still owe the full state tax when buying tobacco at a tribal outlet. The refund agreements only cover purchases by that tribe’s members.
Buying Online or by Mail
Ordering cigarettes, smokeless tobacco, or vaping products from an out-of-state seller does not avoid Oregon’s tax. Under the federal Prevent All Cigarette Trafficking (PACT) Act, remote sellers must register with the Bureau of Alcohol, Tobacco, Firearms and Explosives and with Oregon’s tobacco tax administrator before shipping anything into the state, file monthly reports on every shipment, and comply with all of Oregon’s licensing, stamping, and excise tax requirements.11Bureau of Alcohol, Tobacco, Firearms and Explosives. Prevent All Cigarette Trafficking (PACT) Act There is no internet-sales exemption.
The PACT Act also generally prohibits mailing vaping products through the U.S. Postal Service, so most remote sellers of e-cigarettes and e-liquids have to use private carriers with their own age-verification programs.