MO · 10-Q · 2026Q3 · Full report

Tobacco Excise Tax Pressure

ALTRIA GROUP, INC. · 2026-10-29 · Importance 26 · Surprise 24

U.S. tobacco products face substantial excise taxes, and the weighted-average state cigarette tax rose from $0.36 per pack at the end of 1998 to $2.02 as of October 26, 2026; Utah enacted a cigarette tax increase in 2026. As of that date, 37 states, the District of Columbia and Puerto Rico had enacted e-vapor taxes, while 21 states and the District of Columbia had enacted taxes on oral nicotine pouches. The company says tax increases can reduce consumption, shift purchases toward discount or lower-taxed products and increase counterfeit or contraband sales, potentially materially affecting its business and innovative nicotine businesses.

Key facts

• As of October 26, 2026, the federal government, 24 states, Puerto Rico, Philadelphia, and Cook County, Illinois had adopted weight-based MST tax methods. source
• Altria expects tax increases to adversely affect operating-company product sales through lower consumption and shifts from premium to discount, lower-taxed, counterfeit, or contraband products. source
• Substantial excise tax increases on e-vapor and oral nicotine products may hinder adult smokers’ transition to those products and materially adversely affect Altria’s innovative nicotine businesses. source
• Altria identifies increases in nicotine product-related taxes as a risk to future results. source
• Altria supports converting ad valorem MST taxes to weight-based taxes because equal-weight cans then incur the same tax. source