When shopping for cigars online, taxes are required to be paid based on the state where the order is being shipped. The seller should collect these taxes. If they do not, you as the consumer may still be responsible for paying them.

What makes things even more complicated is that tax rules vary dramatically across the country. Some states do not tax cigars at all, while others impose rates as high as 95 percent. And those costs ultimately get passed on to you.

That means a significant factor in the final price you pay for cigars is often not where you shop, but where you live. In this guide, we will break down how state tax rules impact cigar prices, calculate the effective tax rate in every state, and highlight the states with the lowest and highest costs.

How Do State Taxes Impact Cigar Prices?

Most states impose both a state excise tax and a sales tax on cigars. And each state can have different rules and rates. We reviewed taxes on large premium cigars in 51 jurisdictions (50 states plus Washington D.C.). Here's what we found.

State Excise Tax on Cigars

State excise tax is based on the wholesale price (WSP) of a cigar. It's usually paid by the retailer or distributor that sells the cigar. Then, they adjust the price of the cigar to cover the cost. States with higher excise taxes on cigars tend to be more expensive than buying cigars in states that have little to no excise tax.

Out of the 51 we reviewed:

• (4) have no state excise tax on premium cigars
• (4) charge a flat tax for each cigar
• (16) charge a percentage of the cigar's wholesale price (WSP), with a cap
• (27) charge a percentage of the cigar's wholesale price (WSP), without a cap

State Sales Tax on Cigars

Out of the 51 we reviewed:

• (5) have no state sales tax
• (46) have state sales tax on cigars
• (40) have local sales tax in addition to state sales tax

As you can imagine, with all of the different rules, figuring out which state has the best cigar prices for residents can be challenging.

So we decided to look at a specific example for a cigar with an MSRP of $12.

Finding the Real Cost of a $12 Cigar With Tax

To compare how state excise and sales tax impacts cigar prices in all 50 states & Washington, D.C., we used a cigar with the following criteria as an example:

• Wholesale Price (WSP): $9 (state excise tax is based on the WSP)
• Suggested Retail Price (MSRP): $12

Using this example, we added the state excise tax and state sales tax. Since local sales tax can vary from county to county within a state, we left local sales tax out of the calculation.

Finding the Effective Tax Rate

After calculating the state excise tax and state sales tax on a $12 cigar, we could determine the effective tax rate. The effective tax is the actual tax rate you pay above the suggested retail price to cover all state taxes.

Effective Tax Rate = ($12 MSRP + State Excise Tax + State Sales Tax) / $12 MSRP

This shows how much extra you're really paying thanks to taxes, allowing us to compare the different states.

Jump to the effective tax rates on cigars in all 50 states and Washington, D.C.

Top 5 States Where Residents Pay the Lowest Cigar Taxes

By far, New Hampshire residents pay the least for cigars. It is the only state with neither a cigar excise tax nor a state sales tax. So if you live in New Hampshire and buy a cigar with an MSRP of $12, that is exactly what you will pay.

Montana is the second most affordable state for residents when it comes to cigar prices. At first glance, the 50 percent excise tax might seem high, but since it is capped at just 35 cents per cigar, the effective tax rate remains low.

In Alabama, residents benefit from a flat state excise tax of only 4 cents per cigar, which keeps costs down.

Oklahoma follows closely behind, with a 50 percent excise tax that is capped at 12 cents per cigar.

Rounding out the top five are Florida, Pennsylvania, and Washington, D.C. Each has a 0 percent state excise tax and a 6 percent state sales tax, making them among the most affordable places for residents to purchase cigars.

Make sure you have a reliable humidor, and then take advantage of it when you travel to one of these states. And, if you happen to be in Pennsylvania during your journey, stop by to visit our shop for some of the best cigar prices around.

Top 5 States Where Residents Pay the Highest Cigar Taxes

You might have heard the phrase "sin tax". It's a term made popular in the early 20th century to describe taxes aimed less at raising revenue and more at discouraging certain behaviors, like smoking.

Some states use cigar taxes this way, setting very high rates to make smoking more costly.

After reviewing the effective tax rates across the country, the least affordable state for cigar buyers is Utah, with an uncapped 86 percent state excise tax. Once sales tax is added, residents can expect to pay about $20.67 for a cigar with a $12 MSRP, which is more than a 70 percent effective tax rate!

New York follows closely with an uncapped 75 percent state excise tax, making it one of the most expensive states for residents.

Alaska also has an uncapped 75% excise tax. However, since there's no state sales tax, cigar prices are a bit more affordable than in Utah & New York.

In California, the excise tax is about 54% (uncapped). With sales tax added, you can expect a cigar with a $12 MSRP to cost around $17.90.

Colorado rounds out the list, taxing cigars at an uncapped 40%. Combined with sales tax, that $12 stick could cost about $17.53 at checkout.

Key Takeaways

• Federal excise tax is included in the price of all cigars.
• State excise and sales taxes can create large price differences depending on where you live.
• Tax caps matter. Even states with very high excise tax rates can be more affordable if the tax is capped per cigar.
• Large premium cigars are taxed differently from small flavored cigars, cigarillos, and small cigars with filters. This guide only covers taxes on large, premium cigars like those sold at Atlantic Cigar Co.

Which State Do Residents Pay the Least for Cigars?

New Hampshire residents pay the least for cigars because the state does not charge a tobacco excise tax on premium cigars and also has no state sales tax.

In other states, retailers may offer discounts or promotions, but in New Hampshire, the absence of both excise and sales taxes means residents consistently pay only the cigar’s base price.

Effective State Tax Rate on Cigars (Chart by State)

Here's a chart with our calculations of the effective tax rate on large premium cigars in all 50 states and Washington, D.C. Calculations were taken from the tax rates found in the table here: Cigar Tax Rates by State in 2025