Indiana’s tax on cigarettes rose on July 1st, seeing Hoosiers paying almost $3 in taxes compared to the almost $1 in taxes on cigarettes before July 1st.
Indiana lawmakers approved the measure earlier in 2025, as an effort to address a budget shortfall and reduce tobacco use.
This tax increase applies to all tobacco products across the state, not just cigarettes.
This change is projected to generate $800 million over two years, slated for Indiana’s Medicaid program to help address a $2 billion dollar budget shortfall there.
According to the American Lung Association, 4 states all have cigarette taxes higher than $3.50; with New York’s cigarette tax as high as $5.35.
