Maine Gets Massive Cigar Tax Increase for 2026

JohnS · 2025-07-10T00:04:30Z

If you live in another state in the US other than Maine in the north-east, be grateful!

Maine Gets Massive Cigar Tax Increase for 2026

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July 8, 2025 - Patrick Lagreid

Cigar smokers in Maine may want to start preparing to pay significantly more for their cigars in 2026, as the Maine Legislature approved a budget bill, which the governor has signed into law, that includes an increase in the tax rate from 43 percent of the wholesale price to a whopping 75 percent.

For consumers, that means that a cigar with an MSRP of $9.50 would see its tax jump from about $2.04 to about $3.56 by halfwheel estimates, an increase of $1.52. For a more expensive cigar, such as one priced at $15.99, the tax rate goes from about $3.44 to $6. Ultimately, retailers determine how to pass the tax along to consumers, so those numbers could vary a bit.

With its current 43 percent rate, Maine already had one of the highest tobacco tax rates in the country, and with no cap on the tax, that cigar with an MSRP of $9.50 had the ninth highest price at the register. Once the increase goes into effect, Maine will be tied with New York and Alaska for what is effectively the second highest state cigar tax rate, trailing only Utah, which has an uncapped rate of 86 percent of the wholesale price. There are other states with higher rates on paper, but most of them have a limit about the total amount that can be charged. For example, Minnesota has a tax of 95 percent of the wholesale price, but it has a cap of no more than 50 cents of state tobacco tax per cigar.

The increase comes alongside a 75 percent increase to the cigarette tax rate, which jumps from $2 per pack to $3.50. Smokeless tobacco, chewing tobacco and snuff will also increase, from $2.02 per ounce to $3.54 per ounce when sold in packages of one ounce or more, or $3.54 per package if sold in less than a one-ounce package. The legislation also updates the law to say that if the tax on cigarettes is increased after Jan. 5, 2026, the tax on other tobacco products will be adjusted to be equivalent to the same percentage change in the tax rate for one cigarette.

Back in January, Gov. Janet Mills called for the tobacco tax increases in her biennial budget proposal, citing that the cigarette tax had not been increased since 2005 and had become the lowest rate in New England, which contributed to the state having the highest adult smoking rate and the second-highest youth smoking rate in the region.

The increase goes into effect on Jan. 5, 2026.

Source: https://halfwheel.com/maine-legislature-approves-massive-cigar-tax-increase/452873/