<P> Despite the excise tax of the Federal government, states did not ratify a tobacco excise tax until well into the 20th century . In 1921, Iowa became the first state to pass a tobacco excise tax at the state level in addition to the federal tax . Other states quickly followed suit, and by 1950, 40 states and Washington D.C. enacted taxes on cigarette sales . </P> <P> By 1969, all U.S. states, the District of Columbia and the territories had implemented cigarette taxes . Several cities such as Chicago and New York City have also implemented their own citywide cigarette taxes . The combined federal, state, county, and local tax on a pack of twenty cigarettes in the city of Chicago, in Cook County, Illinois, is $7.42, the highest in the entire country . The lowest rate in the nation is in Missouri, at 17 cents, where the state's electorate voted to keep it that way in 2002, 2006, and 2012 . </P> <P> On February 4, 2009, the Children's Health Insurance Program Reauthorization Act of 2009 was signed into law, which raised the federal tax rate for cigarettes on April 1, 2009 from $0.39 per pack to $1.01 per pack . The increase was to help cover the cost of increased coverage under the State Children's Health Insurance Program (SCHIP). </P> <P> One of the biggest criticisms of the bill came from Americans for Tax Reform which feared that it would lead to lower state tax revenue . According to Nobel Prize--winning economist Gary Becker, who has studied the long - run price elasticity of cigarettes, the tax increase as a result of the Children's Health Insurance Program Reauthorization Act increases the price of cigarettes 13.3% which ultimately means a 10.6% decrease in unit sales . The National Tax Foundation calculates these numbers to determine a predicted $1 billion loss for states . Another argument against this bill claims it to be regressive, holding that the tax increase unfairly targets the poor because according to the Centers for Disease Control and Prevention (CDC) more than half of all smokers are low income . The CDC also notes that, "However, because low - income groups are more responsive to price increases, increasing the real price of cigarettes can reduce cigarette consumption among low - income smokers by a greater percentage than among higher - income smokers, and thereby diminish socioeconomic smoking disparities . Further, lower - income communities also suffer from tobacco - related illnesses at a disproportionately higher rate than their higher - income counterparts . </P>

How much federal tax is on a pack of cigarettes