Weekly Fiscal Facts are provided to Wisconsin Newspaper Association members by the Wisconsin Policy Forum, the state’s leading resource for nonpartisan state and local government research and civic education. The Wisconsin Policy Forum logo can be downloaded here.
Cigarette smoking continues to decline nationally and in Wisconsin, while vaping is on the rise. Lower rates of cigarette use translate to many health benefits for Wisconsinites, extending the lifespans of former smokers and sparing many state residents from life-altering chronic health conditions.
Another consequence of this sweeping shift: Wisconsin’s reliance on cigarette tax revenue is waning. And Wisconsinites increasingly are consuming tobacco and nicotine products that are much less heavily taxed.
Revenues from Wisconsin’s $2.52-per-pack cigarette excise tax dipped 8.2% in fiscal 25, to $369.6 million. While they remain a major contributor to the state’s general fund, in inflation-adjusted terms, this is their lowest point since 1992. At the 2010 peak, inflation-adjusted cigarette tax revenues were $950.9 million.
Overall, taxation of different tobacco and nicotine products in Wisconsin varies widely. As of 2026, Wisconsin’s excise tax rate of $2.52 per pack ranked 18th-highest among the states. E-cigarettes are taxed at a rate of 5 cents per milliliter of vape fluid. Wisconsin taxes moist snuff tobacco at 100% of the manufacturer’s list price, while nicotine pouches are not subject to excise taxes.
While it’s impossible to compare these taxation levels on an exact apples-to-apples basis, one of the largest e-cigarette brands, JUUL, has estimated that one of its 0.7 milliliter vape cartridges is “approximately equivalent to about 1 pack of cigarettes.”
At the start of 2026, 34 states imposed an excise tax on vaping products. The Tax Foundation calculated the amount of tax each state would charge on a package of four 1.8mL vaping cartridges. In Wisconsin, that’s 36 cents, which is tied with 5 other states for the lowest rate.
Revenues from Wisconsin’s e-cigarette tax have increased rapidly since fiscal year 2020, the first in which it was collected, when collections produced $1.3 million. By fiscal 2025, these collections were up to $8.1 million, amounting to a more than five-fold increase in just five years.
Still, this amount was only about 2.2% of state cigarette tax revenues collected the same year. As our state increasingly trades cigarette tax revenues for vapor tax revenues, one implication is that the role of tobacco and nicotine excise taxes is dwindling as a contributor to the state’s general fund. As recently as 2010, nearly $6 out of every $100 that went into the state’s general fund came from these taxes. That share has since declined from 5.8% in 2010 to 2.3% in 2024.
Looking forward, as the state’s system of taxation for tobacco and nicotine products amounts to a confusing patchwork, policymakers may wish to re-examine it. Our experience with cigarette taxes shows how using tax policy to help reduce use of a harmful substance may help achieve that goal.
This helps to underscore how two considerations for taxing tobacco and nicotine actually exist in tension. High rates of taxation may help to reduce the use of a harmful substance, resulting in a positive outcome for the wellbeing of Wisconsinites. But in the long run, it may also lead to dwindling revenues to fund state priorities.
This information is provided to Wisconsin Newspaper Association members as a service of the Wisconsin Policy Forum, the state’s leading resource for nonpartisan state and local government research and civic education. Learn more at wispolicyforum.org.
