Tobacco Taxes

The Department of Revenue administers Tobacco Taxes on cigarettes, other tobacco products (OTP), cigarette papers and snuff.

The tax rate on packs of 20 cigarettes is 30 cents (proportionate rate for packs of 25). 

The cigarette tax is paid through the purchase of stamps from the Department of Revenue.  These stamps must be affixed to each package of cigarettes as evidence that the tax was paid.

Cigarette Tax Laws are located in Chapter 138 of the Kentucky Revised Statutes.

Cigarette Paper is defined as a paper or similar material suitable for use by consumers to wrap or roll tobacco into the form of a cigarette.  Cigarette tubes are considered a cigarette paper.

Materials containing tobacco suitable for wrapping or rolling tobacco into the form of a cigar will continue to be taxed as an Other Tobacco Product (KRS 138.140).

Effective June 1, 2006, all wholesalers of cigarette papers will be required to remit twenty-five cents per package of 32 sheets.  For packages greater or less than 32 sheets, the tax shall be calculated at $0.0078 per sheet.

Form 73A423 Monthly Report of Cigarette Papers (41K) is due the 20th day of the month following the month in which the transactions occur.

Other tobacco products (OTP) are taxed at the rate of 7.5 percent of gross receipts effective August 1, 2005.  "Other tobacco products" means cigars, cheroots, stogies, periques, granulated, plug cut, crimp cut, ready rubbed, and other smoking tobacco, cavendish, plug and twist tobacco, fine-cut, and other chewing tobacco, shorts, dry snuff, refuse scraps, clippings, cuttings and sweepings of tobacco, and other kinds and forms of tobacco prepared in a manner to be suitable for chewing or smoking in a pipe or otherwise, or both for chewing or smoking but does not include cigarettes as defined in subsection (5) of this section, or snuff.

Snuff is taxed at the rate of 9.5 cents per unit (1.5 ounces).  The term “snuff” means any finely cut, ground, or powdered tobacco that is not intended to be smoked.  “Snuff” includes “moist snuff” sometimes referred to as “roll snuff” including the long cut and fine-cut varieties.  Any smokeless tobacco product similar in composition and makeup to snuff shall be taxed at the rates applicable to snuff.

Effective June 1, 2006, dry snuff is taxed at 7.5 percent as an Other Tobacco Product (OTP). Moist snuff will remain in the snuff category and be taxed at $0.095 per unit.

House Bill 380, passed during the 2006 Kentucky Legislative session, amended KRS 131.602 to remove the requirement that containers bear the excise tax stamp for the purpose of Master Settlement Agreement (MSA) reporting requirements.  As a result, form 73A422, Monthly Report of Other Tobacco Products and Snuff now has an additional page for reporting RYO tobacco sold in Kentucky for MSA purposes.

Other tobacco products and snuff will be reported on Monthly Report of Other Tobacco Products and Snuff - Form 73A422 (50K).  The due date of the return is the 20th day of the month following the month in which the transactions occur. 

KRS 131.610 requires the Department of Revenue to provide a directory of all participating manufacturers and non-participating manufacturers that have been certified by the Attorney General as being in compliance with the Master Settlement Agreement and Model Act. The Department of Revenue will update the directory to add or remove a tobacco manufacturer or brand family that does not meet certification requirements as determined by the Attorney General. The Department of Revenue will notify wholesalers/distributors when there have been changes to the directory.

NOTE: Pursuant to KRS 131.612, it shall be unlawful for any wholesaler/distributor to affix a stamp to a package or other container of cigarettes or distribute such cigarettes of a tobacco product manufacturer or brand family not included in the directory. Unlawfully stamped cigarettes will be considered contraband in the hands of the wholesaler/distributor and will be subject to seizure and destruction. Civil or criminal penalties may also be pursued against the wholesaler/distributor.

If you have any questions concerning the Tobacco Taxes please Email the Department of Revenue.

If you have questions concerning the Master Settlement Agreement (MSA), certification or brands, please Email the Office of the Attorney General.

Current Year - Tobacco Tax Forms

E-Mail DOR Taxing Areas

Questions can be directed to the Kentucky Department of Revenue, Excise Tax Section, Station 62, PO Box 138, Frankfort KY  40602, (502) 564-6823.