Tobacco Tax

AAA

DEFINITION of 'Tobacco Tax'

A tax imposed on cigarettes to help pay for healthcare for the state's poor and contribute to cancer research and smoking prevention and cessation programs. The idea behind the tobacco tax is to try and prevent more children from becoming smokers and persuade adult smokers to quit.


Also referred to as "cigarette tax".

INVESTOPEDIA EXPLAINS 'Tobacco Tax'

Between 2002 and 2010, 47 states, Washington, D.C., and several U.S. territories have increased their cigarette tax rates more than 100 times.


Each state has different prices due to varying state tax rates in addition to different manufacturer, wholesaler, and retailer pricing and discounting practices. More states have tried increasing rates in an effort to decrease the number of teenagers who start smoking and to minimize the illnesses related to smoking and second-hand smoke.

RELATED TERMS
  1. Airport Tax

    A tax levied on passengers for passing through an airport. The ...
  2. Sin Tax

    A state-sponsored tax that is added to products or services that ...
  3. Luxury Tax

    A tax placed on products or services that are deemed to be unnecessary ...
  4. Tax Fairness

    A tax platform based on an ideal that aims to create a system ...
  5. Tax Liability

    The total amount of tax that an entity is legally obligated to ...
  6. Pigovian Tax

    A special tax that is often levied on companies that pollute ...
Related Articles
  1. Savings

    10 Tips For Achieving Financial Security

    Follow this sound advice and plan for a comfortable future.
  2. Taxes

    7 Year-End Tax Planning Strategies

    Do you have a capital loss that could be booked and used to offset future tax liabilities? If so, it may be time to sell.
  3. Taxes

    3 Common Tax Questions Answered

    We clarify some rules that often puzzle taxpayers.
  4. Taxes

    "Temporary" Taxes That Stuck

    Taxpayers should be wary when a new "temporary tax" is introduced. Sometimes these temporary taxes are anything but.
  5. Savings

    5 Ways To Lose Your Retirement Nest Egg

    These common mistakes can put your savings at risk. Find out how to avoid them.
  6. Economics

    EU Probes Tax Laws To Catch Corporate Cheaters

    Recently, the EU has launched an investigation into tax deals between Amazon and the country of Luxembourg.
  7. Economics

    The Economic and Social Effects of Corruption

    Corruption results in inefficiencies in the operations of emerging economies, and prevents such economies from reaching the maximum level of development.
  8. Economics

    Can state and local governments in the US run fiscal deficits?

    Discover why most state and local governments do not – or cannot – run fiscal deficits in the same manner as the U.S. federal government.
  9. Professionals

    How are an employee's fringe benefits taxed?

    Discover how receiving fringe benefits can increase total compensation for employees and how it is important to understand how these benefits are taxed.
  10. Economics

    Why is President Obama hesitant to approve the Keystone XL Pipeline project?

    Find out how President Obama's hesitancy over the Keystone XL pipeline project is motivated by political pressure from two opposing factions.

You May Also Like

Hot Definitions
  1. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  2. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  3. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  4. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
  5. Break-Even Analysis

    An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even ...
  6. Key Performance Indicators - KPI

    A set of quantifiable measures that a company or industry uses to gauge or compare performance in terms of meeting their ...
Trading Center