Maine Plans To Raise Tobacco Taxes Starting in 2026, And E-cigarette Taxes Will Also Be Raised

Maine plans to raise tobacco taxes starting in 2026, and e-cigarette taxes will also be raised

The governor of Maine, USA, proposed to increase the tax rate on tobacco products such as cigars and e-cigarettes from the original wholesale sales price of 43% to 65%, which is expected to increase revenue by about $80 million in the next two years. The tax rate adjustment is scheduled to take effect on January 5, 2026.

According to Halfwheel on January 12, Janet Mills, the governor of Maine, USA, released her two-year budget proposal, suggesting that tobacco taxes be raised to balance revenue and expenditure.

Mills pointed out that Maine's cigarette tax has not been adjusted since 2005 and is currently only $2 per pack. She proposed to increase it to $3 per pack. The governor said that Maine currently has the lowest cigarette tax in New England, and the smoking rate of adults and teenagers is the first and second respectively. These problems are why she is pushing for tax increases.

According to state law, if the cigarette tax is adjusted, the tax rate of other tobacco products must also be increased accordingly. The tax rate on cigars will increase from 43% of the original wholesale sales price to 65%. The new tax also applies to chewing tobacco, e-cigarettes and other products made from tobacco or containing natural or artificial nicotine.

The tobacco tax increase is expected to raise about $80 million for the state general fund over the next two years, according to documents supporting Mills' proposal.

If the proposal passes as currently drafted, the tax rate adjustment would take effect on January 5, 2026.