ILLINOIS — Beginning July 1, residents in Illinois will see a steep increase in the cost of vaping and nicotine products as the state implements a significant new tax hike as part of its 2025 revenue plan.
The tax rate on vaping products, cigars, chewing tobacco, and synthetic nicotine will jump from the current 15% to 45% of the wholesale price, tripling the financial burden on retailers and users.
Vape Tax Increase Expected to Raise $50 Million
The new tax is projected to generate $50 million in annual revenue for Illinois. While the goal is to increase state funds, the hike is also being met with concerns.
Critics argue the 45% rate may negatively affect small retailers and may also deter smokers looking to quit by switching to vaping as a harm-reduction strategy.
Retailers across the state are preparing for the change, with some voicing worry over reduced customer traffic and shifting market behavior.
Other Taxes Also Go Into Effect July 1
The vape tax is not the only change hitting Illinois wallets next month. Several other new or increased taxes also take effect July 1:
-
Motor Fuel Tax: Will rise by 1 cent, increasing from 47¢ to 48¢ per gallon
-
Sports Betting Tax:
-
Sites will pay 25¢ for the first $20 million in wagers
-
And 50¢ per wager beyond that threshold
-
Expected to raise $36 million
-
-
Short-Term Rentals: Companies like Airbnb and Vrbo will now be subject to the hotel-motel operator’s tax, expected to generate $10 million
These changes are part of Illinois’ broader 2025 budget strategy, which state officials say is designed to ensure long-term fiscal stability.
Do you think the vape tax will reduce smoking — or just increase burdens? Let us know your take at ChicagoSuburbanFamily.com.
