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Last Updated: 1/2/2014

Rate Increase for Cigarette and Tobacco Excise Tax

​Minnesota’s excise tax on cigarettes and tobacco products increased on July 1, 2013, due to law changes passed during this year’s legislative session. The new tax rates are explained below. 

Cigarettes

The law changes passed during the 2013 legislative session eliminated the health impact fee and raised the excise tax to $2.83 per pack. Effective Jan. 1, 2014, the total Minnesota tax on a standard  20-pack of cigarettes is:

  • $3.342 for brands that have a legal settlement with Minnesota. This includes the excise tax and 51.2 cent sales tax. (Note: From July 1 – Dec. 31, 2013, the combined excise and sales tax rate was $3.323 per pack.)
  • $3.842 for non-settlement brands. This includes the excise tax, 51.2 cent sales tax, and 50 cent non-settlement fee. (Note: From July 1 – Dec. 31, 2013, the combined excise and sales tax rate was $3.823 per pack.)

“Standard” means cigarettes that weigh less than three pounds per 1,000 cigarettes.

For cigarettes weighing more than three pounds, the excise tax rate is $5.66 per pack. Effective Jan. 1, 2014, the total Minnesota tax on a 20-pack of cigarettes is:

  • $6.172 for brands that have a legal settlement with Minnesota. This includes the excise tax and 51.2 cent sales tax. (Note: From July 1 – Dec. 31, 2013, the combined excise and sales tax rate was $6.153 per pack.)
  • $6.672 for non-settlement brands. This includes the excise tax, 51.2 cent sales tax, and 50 cent non-settlement fee. (Note: From July 1 – Dec. 31, 2013, the combined excise and sales tax rate was $6.653 per pack.) 

Other Tobacco Products

The excise tax on most other tobacco products is 95 percent of the “wholesale sales price.” This does not apply to:

  • Premium cigars – The excise tax on premium cigars is $3.50 per cigar or 95 percent of the wholesale sales price, whichever is less.
  • Moist snuff – Effective Jan. 1, 2014, the excise tax on moist snuff is $2.83 per container or 95 percent of the wholesale sales price, whichever is greater.  (Note: From July 1 – Dec. 31, 2013, the excise tax on moist snuff was 95 percent of the wholesale sales price.)
  • Little cigars – These are now taxed as cigarettes.

Effective Jan. 1, 2014,  “wholesale sales price” means the price a distributor pays for a tobacco product plus any applicable federal excise tax, freight charges, or packaging costs (if they were not included in the purchase price).

For more information, see Little Cigars Taxed at Cigarette Rate and  Excise Tax Rate on Premium Cigars and Moist Snuff.