Fact check: Does Chicago have the highest tobacco taxes in the nation?
March 16, 2016
By Autumn Lewien
On January 13, 2016, Rahm Emanuel (D), the current mayor of Chicago, Illinois, introduced an ordinance in the Chicago City Council that, among other changes, would set minimum prices, or "price floors," and impose a series of taxes on non-cigarette tobacco products, such as cigars and chewing tobacco.[1] In a February 23, 2016 press release, Rob Karr, president and CEO of the Illinois Retail Merchants Association (IRMA), pushed back against Mayor Emanuel’s proposal claiming that "Chicago already has the highest tobacco taxes [...] in the nation."[2] Karr’s full statement is provided below:
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Where will this stop? Do consumers really want city government setting minimum prices for products? Do they really want city government taking away coupons? Chicago already has the highest tobacco taxes and the highest sales taxes in the nation, and amazingly, they still want more. Plus we’re on the heels of the historic property tax increase they just imposed. There is a breaking point, and local business owners tell IRMA again and again they will not survive in the city.[2][3] |
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Does Chicago have the highest tobacco taxes in the nation? In 2014, Chicago enacted a budget that increased its per-pack tax by 50-cents—from 68-cents to $1.18 per pack.[4] Compare that to Juneau’s city tax of $3.00 or Philadelphia’s $2.00 cigarette tax. And New York City? There residents pay an extra $4.35 in state tax and $1.50 in city tax on each pack of cigarettes. However, Chicago's 50-cent increase brought the city's combined federal, state, and local per-pack tax to $7.17—the highest in the country.[5]
Chicago’s Non-Cigarette Tobacco Tax
At present, the city of Chicago does not impose its own taxes on tobacco products beyond cigarettes and electronic cigarettes, or "e-cigarettes." However, the new ordinance, if passed, would change this. In addition to raising the legal age to buy tobacco products from 18 to 21 and establishing price floors for specified tobacco products, Mayor Emanuel’s proposal would levy taxes on non-cigarette tobacco products.[1] Specifically, the tax plan includes:[6]
- A 15-cent tax per “little cigar,” raising the average cost of a 20-pack from $5.79 to $8.79.
- A 90-cent tax on full-sized cigars, increasing the estimated cost of a two-pack from $2.25 to $4.05.
- A $1.80 tax on every ounce of smokeless chewing tobacco, which would raise the average price of a standard 1.2-ounce can from $4.19 to $6.35.
- A $6.60 per ounce tax on roll-your-own tobacco, bringing the average cost of a "small pouch" of tobacco from $7.25 to $11.54.
Officials estimate the new tax will bring in an additional $6 million per year in revenue, which is earmarked to finance Chicago Public School orientation classes and youth smoking cessation programs.[6] The ordinance would also establish several price floors, including a $11.50 per package price floor on cigarettes and little cigars, a $1.70 minimum price per cigar, and a $4.00 and $17.70 per ounce price floor for smokeless tobacco and smoking tobacco respectively.[1]
Action in the City Council
On February 10, the Chicago City Council Finance Committee approved an amended version of the Mayor’s proposal, which, according to the Chicago Tribune, doubles fines for selling illegal "loosie" cigarettes—to $5,000 for a first time offense and $10,000 for subsequent offenses.[7] However, when the legislation was introduced before the full city council on the same day, a procedural move was made to defer and publish the ordinance, delaying action until the next Council meeting, which is scheduled for March 16.[8]
National Comparison
How does Chicago’s current cigarette tax compare to tax rates across the country?
Illinois levies a tax of $1.98 per pack of cigarettes—ranking the state 17th nationally for cigarette taxes.[9] However, cigarette taxes in Chicago are considerably higher. Both Chicago and Cook County are counted among the estimated 602 localities that have enacted cigarette taxes in addition to those imposed by the state and federal governments.[10] Residents of Cook County pay an additional $3 per pack in a county tax, and the city of Chicago tacks on another $1.18.[11][4] Chicago’s federal, state, and local cigarette taxes currently total $7.17—a national high, according to data compiled by the organization Tobacco Free Kids.[5] New York City has the second highest cigarette tax at $6.86—composed of a $1.01 federal tax, a $4.35 state tax and a $1.50 municipal tax—and Evanston, Illinois, also located in Cook County, ranks third with a combined total cigarette tax of $6.49.[5]
Conclusion
In response to Mayor Emanuel’s introduction of a new tobacco ordinance, which—in addition to raising the age limit and imposing price floors—assesses new taxes on non-cigarette tobacco products, Rob Karr, CEO of the Illinois Retail Merchants Association, claimed that Chicago’s tobacco taxes are already the highest in the nation. We find this claim to be true: Chicago’s current combined federal, state, and local cigarette tax of $7.17 a pack is the highest in the nation.
Launched in October 2015 and active through October 2018, Fact Check by Ballotpedia examined claims made by elected officials, political appointees, and political candidates at the federal, state, and local levels. We evaluated claims made by politicians of all backgrounds and affiliations, subjecting them to the same objective and neutral examination process. As of 2025, Ballotpedia staff periodically review these articles to revaluate and reaffirm our conclusions. Please email us with questions, comments, or concerns about these articles. To learn more about fact-checking, click here.
Sources and Notes
- ↑ 1.0 1.1 1.2 Office of the City Clerk, "SO2016-105: Legislation Details with Text," accessed March 8, 2016
- ↑ 2.0 2.1 Butterfield, M. Illinois Retail Merchants Association, "Tanya Triche, IRMA's General Counsel Speaks at the Chicago's Proposal to Mandate Minimum Prices on Tobacco Products Press Conference," February 23, 2016
- ↑ Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
- ↑ 4.0 4.1 City of Chicago, "Cigarette Tax (7506)," accessed March 8, 2016
- ↑ 5.0 5.1 5.2 Tobacco Free Kids, "Top Combined State-Local Cigarette Tax Rates," January 6, 2016
- ↑ 6.0 6.1 City of Chicago, "Mayor Emanuel Introduces Ordinances to Crack Down on Latest Tobacco Industry Efforts to Hook Youth," January 13, 2016
- ↑ Byrne, J. Chicago Tribune, "Aldermen block Emanuel tobacco tax hike proposal," February 10, 2016
- ↑ City of Chicago: Office of the City Clerk, "SO2016-105," accessed March 8, 2016
- ↑ Federation of Tax Administrators, "State Excise Tax Rates on Cigarettes," January 1, 2016
- ↑ Orzechowski and Walker, "The Tax Burden on Tobacco: Historical Compilation Volume 49," 2014 (Page 308)
- ↑ Cook County Government, "Tobacco Tax," accessed March 8, 2016
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