Where Does the Tax Revenue From Cigarette Sales Go?

Smoking is a deadly, addictive habit. This deadly addiction brings billions of dollars of tax revenue to the federal, state and local governments. On an annual basis, the federal government collects $7 billion dollars of tax revenue from cigarette sales.

Federal

• One of the beneficiaries of tax revenue from cigarette sales is the federal government. The revenue goes directly to help fund the Children’s Health Insurance Program; it's a program that helps uninsured, low-income families provide healthcare services for their children.

State

• The latest U.S. Census State and Local revenue data of 2008 indicated that states amassed $16 billion dollars in taxes from cigarette sales. The revenue obtained from the taxes goes directly to balance states’ budgets and fund state healthcare programs.

Local

• Many municipalities impose cigarette taxes at the local level. The revenue goes into the localities’ general funds for various local projects, such as road maintenance and school renovations.

Non-Smoking Campaigns

• Tax revenue from cigarette sales goes to fund various anti-smoking campaigns targeting youth. Revenue from local funds is used to fund tobacco prevention and cessation programs.

Healthcare

• Many prevention and cessation programs come from tax revenue from cigarette sales. These programs curtail healthcare costs by encouraging smokers to quit.