Chicago Enacts Higher Cigarette Tax

Also considers ordinances on e-cigarettes and flavored tobacco products

Thomas A. Briant, NATO Executive Director

Rahm Emanuel

Rahm Emanuel

This week, Chicago Mayor Rahm Emanuel compromised and agreed to reduce his proposed $0.75-per-pack city cigarette tax increase to $0.50-per-pack. The compromise was reached due to on-going concerns raised by city aldermen that a $0.75-per-pack tax increase would make the widespread black market cigarette problem in Chicago even worse. Yesterday, the Chicago City Council adopted the mayor’s budget, including the $0.50-per-pack cigarette tax increase, on a 45-5 vote. This $0.50-per-pack increase will result in a new Chicago cigarette tax rate of $1.18 effective January 1, 2014. This $0.50-per-pack cigarette tax increase means that the combined city, county, state and federal taxes on cigarettes sold in Chicago will be $7.17-per-pack, the highest in the nation.

Also, two new ordinances were introduced yesterday for consideration by the Chicago City Council that would impose regulations on the sale of e-cigarettes and prohibit the sale of flavored tobacco products, including menthol flavored products, within 500 feet of a public or private school.

The proposed ordinance regarding electronic cigarettes would prohibit the sale of e-cigarettes to anyone under the age of 18, ban the use of e-cigarettes in restaurants, theatres and other places where cigarette smoking is not allowed, require e-cigarette sellers to be licensed, and mandate that e-cigarettes not be sold through self-service displays.

The second proposed ordinance would ban the sale of any “flavored tobacco product” from any location that “has a property line within 500 feet of the property line of any public, private, or parochial elementary, middle, or secondary school located in the City of Chicago”. The term “flavored tobacco product” means any tobacco product, including cigarettes, that has a characterizing flavor, other than the taste or aroma of tobacco, including menthol, mint, wintergreen, chocolate, vanilla, honey, cocoa, any candy, any dessert, any alcoholic beverage, any fruit, any herb and any spice. This means that the sale of menthol cigarettes and other menthol flavored tobacco products could not be sold from a retail store located within 500 feet of a school. 

The ordinance does provide that “retail tobacco stores” that derive more than 80% of gross revenue from the sale of tobacco products and tobacco product accessories would continue to be allowed to sell flavored tobacco products. The ordinance would take effect six months after passage by the Chicago City Council and signage into law by the Chicago mayor.