• Starting July 1, taxes on vapes, nicotine pouches like Zyn, cigars, and other tobacco products will jump from 15% to 45%, with cigarette taxes increasing by $1 per pack, aiming to generate nearly $30 million in annual revenue.
• Sen. Javier Loera Cervantes and groups like the American Lung Association argue higher prices will deter nicotine consumption and protect public health, especially among youth.
• Swedish Match and retailer groups fear higher prices on smoke-free alternatives could discourage smokers from switching to less harmful products and drive customers to buy nicotine products in lower-tax neighboring states.

Starting July 1, Illinois residents who use nicotine products will face significantly higher costs as state taxes on vapes, nicotine pouches, cigars, and other tobacco products rise nearly 200 percent.

Under the new measure, taxes on vaping products and nicotine pouches such as Zyn will jump from 15% to 45%. Cigarette taxes will also rise by $1 per pack. Illinois lawmakers estimate the changes will add $29.7 million annually to state coffers.

“Nicotine is still negatively affecting the health of our residents,” said state Sen. Javier Loera Cervantes, the bill’s sponsor, who described the tax hike as a way to reduce tobacco use statewide. “We’re trying to hopefully get people away from tobacco products.”

The tax increase affects products marketed as alternatives to traditional cigarettes, including popular nicotine pouches.

While supporters argue the measure will protect public health, industry representatives and some health experts worry the higher prices could have unintended consequences.

“We’re just worried this tax increase could keep people smoking,” said Dr. Brian Erkkila, director of regulatory science for Swedish Match North America, the maker of Zyn. “When you raise the price of these smoke-free options, these better alternatives, it’s harder for them to get those — and they may just stick with their cigarettes.”

Critics also pointed to potential economic impacts. The Illinois Fuel & Retail Association, which represents gas stations and convenience stores, warned the steep tax could push customers to neighboring states with lower tobacco and nicotine taxes, hurting small businesses near state borders.

Tobacco giant Philip Morris International, which purchased Swedish Match in 2022, has made nicotine pouches a key part of its strategy to shift smokers to smoke-free alternatives.

How nearby states tax nicotine:

• Iowa: No specific tax on vaping products or nicotine pouches; cigarette tax is $1.36 per pack.
• Missouri: One of the lowest tobacco tax rates in the country, at just 17 cents per pack of cigarettes, and no state-level tax on vaping or nicotine pouch products.
• Wisconsin: Taxes vaping products at 5 cents per milliliter of e-liquid but does not currently tax nicotine pouches separately. Cigarette tax is $2.52 per pack.
• Kentucky: Imposes a tax of $1.10 per pack of cigarettes, a 15% wholesale tax on closed-system vapes (like pods), and a 15% tax on open-system e-liquids.
• Michigan: No state tax specifically on vaping products or nicotine pouches. Cigarette tax is $2.00 per pack.

Health groups, however, remain unconvinced that nicotine pouches are a safe or effective tool to quit smoking.

“There is no evidence that these newer smokeless products have had that impact of helping people overcome their addiction to tobacco products,” said Kristina Hamilton, Illinois advocacy director of the American Lung Association. “These products still contain harmful chemicals.”

Hamilton stressed that only seven products are FDA-approved to help smokers quit — and nicotine pouches like Zyn are not among them. She also criticized the tobacco industry’s track record on public health messaging.

“There’s a history of tobacco companies misleading the public about the health harms of their products,” Hamilton said.

While the new tax law’s implementation details are still being finalized, it is unclear how retailers will adjust shelf prices or whether consumers will face additional markups. The state has not yet released guidance on enforcement or potential penalties for retailers who fail to comply.

The tax hike makes Illinois one of the most expensive states in the country for purchasing nicotine products, putting it on par with jurisdictions like New York and California that also impose high tobacco taxes.