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Cigarette Tax Increases by 200%, Into Effect July 1

  • Indiana implemented a 200% increase in cigarette taxes on July 1, raising the rate from about $1 to nearly $3 per pack statewide.
  • Earlier in 2025, lawmakers approved a significant increase in tobacco taxes aimed at closing a $2 billion fiscal gap, while also seeking to lower smoking rates and boost state revenue.
  • The increased tax on cigarettes, as well as on vaping devices and smokeless tobacco, is expected to generate approximately $800 million over the next two years to support Indiana’s Medicaid program.
  • Senator Rodric Bray explained that alongside generating revenue, the policy was designed to encourage people to avoid starting smoking or to quit if they already smoke.
  • The hike may encourage quitting but also risks pushing purchases to neighboring states, with critics warning of financial harm to local businesses and lower-income smokers.
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WFFT FOX 55 Fort Wayne broke the news in on Sunday, June 29, 2025.
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