Illinois

Background: Last February, in an attempt to reverse the state’s recurring general fund budget deficits, newly installed Governor J.B. Pritzker submitted to the General Assembly several provisions for higher taxes in his budget proposal for fiscal 2020.

Tax on electronic cigarettes

Included in Section 15-65 of the budget proposal were amendments to the states’s Tobacco Products Tax Act of 1995. These include a definition of electronic cigarettes as “1) any device that employs a battery or other mechanism to heat a solution or substance to produce a vapor or aerosol intended for inhalation; 2) any cartridge or container of  a solution or substance intended to be used with or in the device or to refill the device; or 3) any solution or substance, whether or not it contains nicotine, intended for use in the device.”

The General Assembly approved the Governor’s budget and as of 1 July 2019, electronic cigarettes have been considered “tobacco products”, subject to the Tobacco Products Tax. Since that date, a tax of 15% of the wholesale price has been applied to electronic cigarettes in the State.

Taxes at local level

Both the City of Chicago and Cook County have collected excise taxes on electronic cigarettes since 2016. In January 2019, Chicago increased its taxes on liquid nicotine.