Illinois Bill Would Add Tobacco Tax to Online Orders

[JohnS]

Frankly, I think this is the last thing we all need right now. More so if you live in the state of Illinois!

Illinois Bill Would Add Tobacco Tax to Online Orders

January 5, 2026 - Charlie Minato

A new bill introduced in Illinois would bring the state’s tobacco excise taxes to orders placed from out-of-state retailers that are delivered to consumers in the state. In other words: it would make the cigars purchased online a lot more expensive for Illinois consumers.

Technically, H.B. 4250 will apply to more than just cigars—e-cigarettes, vaping liquid, pipe tobacco and snuff would be affected by the bill—and it would apply to any order placed from an out-of-state retailer that is delivered to a consumer in Illinois, not just those ordered via the internet.

Additionally, it would require out-of-state retailers to obtain a new “remote retail seller’s license” in order to sell and ship those products to an Illinois address. And most notably, the state’s excise tax for cigars—45 percent of the wholesale price without a cap—would apply to orders placed on or after July 1, 2026.

If a consumer places an order for a cigar with an MSRP of $9.50, they are likely paying around $9.50 or less before sales tax if purchased from an online seller. If H.B. 4250 passes, that same cigar would be subject to an additional $2.14 of Illinois excise tax, bringing the price to $11.64 before sales tax is added. In addition, certain counties, most notably Cook County, have a separate tobacco tax of their own.

While the bill currently has no co-sponsors, consumers in Illinois should be wary about who might fight against this measure. An Illinois-based retailer is already having to pay the excise tax and is likely to argue that because the out-of-state sellers do not get charged the tax, the in-state retailers are at a major competitive disadvantage. Anti-tobacco advocates aren’t going to oppose a bill like this, nor would most people who are indifferent to cigars or tobacco products, as the bill would, in theory, add more tax revenue for the state.

Cigar Rights of America, an industry trade group that represents family-owned cigar companies—some of whom also own retail businesses—warns that it sees shipping-related restrictions as a key frontier for cigar-related legislation in 2026.

“As the 2026 legislative session begins to take shape, shipping regulations are emerging as a growing threat in tobacco control efforts targeting premium cigars,” said the CRA in a blog post. “With mail-order sales accounting for roughly 50 percent of all premium cigar purchases, proposals to restrict or prohibit shipping would significantly limit how and where adult consumers can access premium cigars.”

Source: https://halfwheel.com/illinois-bill-would-add-tobacco-tax-to-online-orders/459694/

[habanohal]

It is one of the 100s of reasons why we all want to leave Illinois!

[chasy]

I’m right there with you brother. When I moved here in 2010, Chicago was thriving. Having a magical run as a major city. Unfortunately, in the last 5ish years it’s just gone downhill so fast. I won’t get into why, but let’s say the one party rule isn’t helping…

[MrBirdman]

In fairness, this is probably being pushed by brick and mortar stores to level the playing field. It’s not unreasonable in that respect. It’s hard enough for them to compete.

The Australians and Europeans roll on the floor laughing when we complain about an extra 65 cent tax on cigars. 

[Chibearsv]

If this State can find any justification for a new tax, they will take it. We have a history of corruption here, not fiscal responsibility. 

[El Niño]

I grew up in Southern Illinois. I miss my hometown and its culture a lot, but the leadership so clearly doesn't care about their people... I'll never go back.

[chasy]

13 hours ago, MrBirdman said:

In fairness, this is probably being pushed by brick and mortar stores to level the playing field. It’s not unreasonable in that respect. It’s hard enough for them to compete.

The Australians and Europeans roll on the floor laughing when we complain about an extra 65 cent tax on cigars. 

I think you're probably right. And there is a huge delta between B&M and online. However, the logic is perverse. "If we increase taxes on one party, they'll get mad and demand we raise taxes on other parties." As I said, taxes only move in one direction. Do we really think there was any consideration around "hey we could lower the B&M taxes to be in line with what online retailers are paying?"

[MrBirdman]

1 hour ago, chasy said:

Do we really think there was any consideration around "hey we could lower the B&M taxes to be in line with what online retailers are paying?"

Tobacco taxes are nothing new, and pretty low in this country. I think it’s a good idea to give online and B&M a level playing field.

Also taxes don’t only go up - ask corporations in America about that. For the peons like us though, they only ask for more, I’ll give you that!

[BrightonCorgi]

Why not implement a 100% tax on cigars bought online? Why are they being so timid?  

[JohnS]

Illinois Legislature Passes Budget Bill Containing 75-cent Cigar Tax Cap

June 3, 2026 - Patrick Lagreid

Earlier this week, the Illinois Legislature passed a budget bill containing a wide range of changes, including one that will benefit cigar consumers: a three-year cap on the tax that can be charged on cigars.

Beginning Jan. 1, 2027, the state will cap its cigar tax at 75 cents per cigar. Currently, the state has an uncapped tax rate of 45 percent of the wholesale price of cigars and several other tobacco products. This current structure means that a cigar with an MSRP of $3.34 would have 75 cents in tax added.

Full Article:https://halfwheel.com/illinois-legislature-passes-budget-bill-containing-three-year-cigar-tax-cap/472131/

[VeguerosMAN]

On top of that Bears will be playing in Indiana. One more reason to leave IL. 

[chasy]

In Illinois we take PRIDE in our taxes!