Illinois residents will see an increase in the cost of vaping and traditional tobacco products starting July 1st, as new state tax hikes take effect. These increases are part of a broader set of tax adjustments aimed at balancing the state's budget for fiscal year 2026 and generating approximately $1 billion in new revenue.
The state tax on all tobacco products, which explicitly includes vaping devices and e-cigarettes, is increasing from 36% to 45% of the wholesale price. This significant rise is projected to contribute an additional $50 million in revenue. The move is intended to not only bolster state finances but also potentially discourage the use of these nicotine products by making them more expensive.
While Governor J.B. Pritzker stated he would veto broad-based tax increases, these targeted "sin tax" hikes on specific items like vapes and tobacco have moved forward. The Illinois Chamber of Commerce expressed disappointment, arguing that such costs on businesses could harm the state’s business climate and growth opportunities. This tax increase on vaping and tobacco products is accompanied by other new or increased levies on items such as gasoline, sports betting, short-term rentals, and telecommunications services. The consistent inclusion of vaping products alongside traditional tobacco in these tax increases signals the state's ongoing approach to regulating them similarly for fiscal purposes.
