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| TAX OUTLINE |
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| TAX DESCRIPTIONS |
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| TOBACCO PRODUCTS |
LEGAL CITATION: |
M.C.L. 205.421 et seq.; 1993 PA 327. |
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| YEAR ADOPTED: |
1947. The former Cigarette Tax (1947 PA 265) was repealed as of May 1, 1994. |
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| BASIS OF TAX: |
Privilege of selling tobacco products. |
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| MEASURE OF TAX (BASE): |
Tobacco products sold in Michigan. |
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| RATE: |
Cigarettes: 100 mills per cigarette ($2.00 per pack); cigars, non-cigarette smoking tobacco, and smokeless tobacco: 32% of wholesale price. |
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| ADMINISTRATION: |
Michigan Department of Treasury. |
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| REPORT AND PAYMENT: |
Due by 20th of each month. |
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| DISPOSITION: |
| Cigarette proceeds: |
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School Aid Fund |
41.620% |
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General Fund |
19.7625% |
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Healthy Michigan Fund |
3.750% |
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Health and Safety Fund |
2.438% |
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Wayne County Indigent Health Care |
0.555% |
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Medicaid Benefits Trust Fund |
31.875% |
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| Cigar, non-cigarette smoking tobacco, and smokeless tobacco proceeds: |
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Medicaid Benefits Trust Fund |
75.0% |
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General Fund |
25.0% |
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2004-05 COLLECTIONS:
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$1,185,794,000 |
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| Tobacco Tax Law Changes |
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Historic Michigan Tobacco Tax Revenues
| A |
1947 (ES) |
PA 265 |
Cigarette Tax established at 1.5 mills per cigarette (3 cents per pack). |
| B |
1959 |
PA 274 |
Increased tax rate to 2 mills per cigarette (4 cents per pack). |
| C |
1961 |
PA 156 |
Increased tax rate to 2.5 mills per cigarette (5 cents per pack). |
| D |
1962 |
PA 215 |
Increased tax rate to 3.5 mills per cigarette (7 cents per pack). |
| E |
1970 |
PA 11 |
Increased tax rate to 5.5 mills per cigarette (11 cents per pack). |
| F |
1982 |
PA 73 |
Increased tax rate to 10.5 mills per cigarette (21 cents per pack) effective May 1, 1982. |
| G |
1987 |
PA 219 |
Increased tax rate to 12.5 mills per cigarette (25 cents per pack) effective January 1, 1988. |
| H |
1993 |
PA 327 |
Tobacco Products Tax established.
Repealed 1947 PA 265 (Cigarette Tax).
Increased tax rate to 37.5 mills per cigarette (75 cents per pack) effective May 1, 1994.
Non-Cigarette Tobacco Products Tax established at 16 percent of whole price. |
| I |
1997 |
PA 187 |
Tax stamp for cigarettes sold in state created, effective September 1, 1998. |
| J |
2002 |
PA 503 |
Increased tax rate to 62.5 mills per cigarette ($1.25 per pack) effective August 1, 2002.
Non-cigarette tobacco products tax increased to 20% of wholesale price effective August 1, 2002. |
| K |
2004 |
PA 164 |
Increased tax rate to 100 mills per cigarette ($2.00 per pack). Non-cigarette tobacco products tax increased to 32% of wholesale price. All became effective July 1, 2004. |
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THE NUMBERS BEHIND THE CHART
Interstate Comparison of Tax Rates (from the Federation of Tax Administrators)
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Last Updated January 10, 2007
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