The governor of Maine proposed to increase the tax rate on tobacco products such as cigars and e-cigarettes from 43% to 65%, which is expected to raise about $80 million in the next two years, and the tax rate adjustment is scheduled to take effect on January 5, 2026.
Maine Gov. Janet Mills released her two-year budget proposal, proposing to balance the books by raising tobacco taxes.
Mills noted that Maine’s tobacco tax has not been adjusted since 2005. It’s currently only $2 per pack. She suggested raising it to $3 a pack. Maine currently has the lowest tobacco taxes in New England, the governor said, while smoking rates among adults and teens are first and second, respectively. These problems are why she is pushing for higher taxes.
According to national law, if the tax on tobacco is adjusted, the tax rate on other tobacco products must also be increased accordingly. The cigar tax will increase from 43% of the original wholesale sales price to 65%. This new tax rate also applies to chewing tobacco, e-cigarettes, and other commodities made from cigarettes or containing natural or artificial tobacco tar.
Rising tobacco taxes are expected to generate about $80 million for the state’s general fund over the next two years, according to supporting documents for Mills’ proposal.
Under the current plan, the tax rate change will take effect on January 5, 2026.
