Chicago

Background

The City of Chicago (Illinois, USA) introduced a tax on electronic cigarettes in November 2015 in the Liquid Nicotine Product Ordinance. The tax became effective on 1 January 2016.

Tax bases

The Chicago ordinance includes two bases for the tax — 1) an individual liquid nicotine product and 2) the volume of consumable liquid measured in milliliters.

Floor tax

Upon enactment of the tax a floor tax was collected on inventory already in the possession retailers. The Chicago Department of Finance issued instructions and a Liquid Nicotine Floor Tax Return for retailers to calculate the amount the tax payable on their stock on the eve of the new tax effective date.

Change in tax rates

Effective 1 January 2019 the City increased the rates of tax from USD 0.80 to USD 1.50 per product unit and from USD 0.55 to USD 1.20 per fluid milliliter of consumable liquid.