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Jennifer Gurton Nov 4, 2025 4 min read Lets be real for a second

Tax vs Wholesale vs Retail: Where the Money Goes For a typical $9.83 pack of cigarettes in 2026: Federal excise tax: $1.01 (12 percent) State excise tax (average): $1.95 (23 percent) Manufacturer and wholesale margin: $2.80 (33 percent) State and local sales tax: $0.50 to $0.70 (6 to 8 percent) Retailer margin: $1.90 to $2.20 (23 to 26 percent) About 40 to 45 percent of the price of a pack goes to taxes