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Cigarette and tobacco products tax

Tobacco products tax extended to alternative nicotine products – floor tax due September 21, 2026

General information: Effective September 1, 2026, the New York State tobacco products tax is extended to alternative nicotine products. Alternative nicotine products are generally products that contain nicotine, but not tobacco, and are intended for human consumption. 

The tax is imposed at the rate of 75% of the wholesale price of the product and is generally paid by the distributor. However, wholesale dealers and retail dealers selling alternative nicotine products are liable for the tax on these products in their possession if the tax has not been paid by a distributor. 

Registration requirements: By September 1, 2026, distributors, wholesale dealers, and retail dealers that currently import or sell alternative nicotine products in New York State must obtain a license or registration to sell tobacco products unless they are already licensed or registered with the Tax Department to sell tobacco products.

Floor tax: Any business selling alternative nicotine products must:

  • take an inventory of the units of alternative nicotine products in their possession as of 11:59 p.m. Eastern Standard Time on August 31, 2026, and
  • file Form MT-200.5, Alternative Nicotine Products Floor Tax Return, and pay the floor tax due by September 21, 2026. 

For additional information, see:

  • N-26-2, Alternative Nicotine Products Subject to Tobacco Products Tax and Floor Tax Due.
  • MT-200.5 and MT-200.5-I, Instructions for Form MT-200.5.

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Cigarette tax

What tax is imposed on cigarettes?

New York State and New York City impose an excise tax on all cigarettes possessed in the state for sale at the following rates:

  • New York State excise tax: $5.35 per package of 20 cigarettes.
  • New York City local excise tax: $1.50 per package of 20 cigarettes.

Accordingly, the combined excise tax rate for a package of 20 cigarettes possessed for sale in New York City is $6.85.

Who pays the tax?

Licensed cigarette stamping agents pay the excise tax when they purchase New York State or joint New York State and New York City tax stamps from the Tax Department. Agents must affix the stamps to the bottom of each pack of cigarettes sold in New York State and New York City (if applicable) as proof of payment of the taxes.

In addition to the excise tax, agents pay a prepaid sales tax when they purchase cigarette tax stamps and pass that tax on to wholesalers and retailers. For more information, see Prepaid sales tax on cigarettes.

When do minimum wholesale and retail cigarette prices change?

New York State establishes minimum resale prices for wholesale and retail sales of cigarettes. These prices change when a manufacturer changes their price or the cigarette excise tax rate changes.

For more information, see Publication 509, Minimum Wholesale and Retail Cigarette Prices for Certain Standard Cigarette Brands.

Tobacco products tax

What tax is imposed on tobacco products?

New York State imposes an excise tax on tobacco products possessed in the state for sale. The tax rate is 75% of the wholesale price on cigars and tobacco products (including alternative nicotine products), except for the following:

  • $0.2675 for each little cigar;
  • $2 per container of snuff with one ounce or less; and
  • $2 per ounce of snuff and a proportionate rate on any fractional amount for containers with more than one ounce (for example, the tax on a 1.25 oz. container is $2.50).

Who pays the tax?

Distributors pay the tax when they import tobacco products into New York State.

Definitions

Tobacco products means any cigar, including a little cigar, tobacco, or alternative nicotine product, other than cigarettes, intended for consumption by smoking, chewing, or as snuff.

Alternative nicotine products are noncombustible products, other than vapor products, which contain nicotine, but not tobacco, and are intended for human consumption, whether chewed, absorbed, dissolved, or ingested by any other means. Alternative nicotine products do not include any product regulated as a drug or device by the U.S. Food and Drug Administration (FDA) under 21 U.S.C. § 351 and the sections that follow. For example, certain smoking cessation drugs and devices regulated by the FDA are not considered alternative nicotine products.

Wholesale price means the price for which the tobacco products are sold to a distributor, before the allowance of any discount, trade allowance, rebate or other reduction, and including the federal excise taxes paid by the seller. The invoice received by a distributor for its purchase of a tobacco product is presumptive evidence of the wholesale price of the tobacco product.

Additional information

Important references

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