(INDIANAPOLIS) - A new report released by the CDC Foundation found Indiana's 2025 tobacco tax increase was followed by significant declines in cigarette sales and a reduction in e-cigarette purchases during the final six months of the year.
According to the report, Indiana sold an estimated 12.6 million fewer packs of cigarettes during the second half of 2025 after the state's cigarette tax increased by $2 per pack on July 1, 2025. The report also estimated e-cigarette sales declined by 8.3 percent.
Researchers found cigarette prices increased by about $2 per pack following the tax hike, matching the size of the tax increase. The report also estimated the tax generated an additional $170.4 million in tobacco tax revenue between July and December 2025.
The analysis was prepared by Economics for Health using retail sales data compiled through custom research conducted by the CDC Foundation. Researchers said cigarette sales declined by about 13.8 percent compared with a synthetic control state used for comparison. E-cigarette sales were estimated to be down 8.3 percent.
The report also found little evidence of significant increases in tobacco sales in neighboring states after Indiana's tax increase, though researchers noted state-level data could not rule out localized cross-border shopping.
Christina Cesnik, Indiana government relations director for the American Heart Association, said tobacco taxes and prevention efforts have a proven record of reducing tobacco use.
"The American Heart Association is committed to bringing health and hope to everyone everywhere, which includes protecting youth from the burdens of tobacco and nicotine addiction as well as helping adult smokers quit," Cesnik said. "Strategies such as tax increases and funding prevention and cessation programs have proven to be effective in reducing tobacco use time after time. This will translate into fewer heart attacks and chronic health conditions that are a direct result of tobacco use."
Indiana increased its cigarette tax from 99.5 cents per pack to $2.995 per pack on July 1, 2025. The state also doubled its e-cigarette tax from 15 percent to 30 percent and increased taxes on other tobacco products.