Tobacco Taxes Indiana's excise tax per pack of cigarettes: $0.555 Indiana's excise tax collection for the fiscal year ending June 2002: $114,757,000 Sales tax on tobacco products: 6.00% Federal excise tax per pack of cigarettes: $0.39 Total federal excise tax collections in fiscal year 2002: $7,512,700,000

Who Profits from Cigarette Sales?

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Number of six-packs of beer that must be sold in Indiana to produce the same state excise tax revenue generated by one carton of cigarettes: 85.8

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Number of bottles of wine that must be sold in Indiana to produce the same state excise tax revenue generated by one carton of cigarettes: 59.6

Indiana Smokers' Contributions
to the State Economy - FY2004

In 2003, Indiana smokers comprised only 26.1% of the adult population in the state.  Here is what they already pay because they choose to buy a legal product:
 Smokers Pay Excise Taxes $335,915,000
 Smokers Pay Sales Taxes $125,116,000
 Smokers Pay Tobacco Settlement Payments $126,600,000
 $587,631,000

Smokers' Economic/Tax Profile 2003
 Income
 Indiana smokers' median household income $33,135
 Indiana nonsmokers' median household income $44,086
 Working families pay more
 36% of Indiana smokers had household incomes LESS THAN $25,000
 11% of Indiana smokers had household incomes EQUAL TO or GREATER THAN $75,000

The impact of smoker payments on the incomes of working families was more than THREE TIMES the impact on higher income smokers.  Those who can afford it least pay a disproportionate percentage of their hard-earned income in smoker payments. 
 Smoker excise tax/sales tax/tobacco settlement payments liability in FY2004
 Total average paid per Indiana smoker in excise and sales taxes $392
 Cost per Indiana smoker for settlement payments to Indiana $108
Total annual payments to Indiana per smoker $500
 Total annual payments to Indiana per nonsmoker $0

Indiana Smoker Facts
 Total smokers' payments in Indiana in FY2004 were:
 More than fifteen times as large as FY2004 alcoholic beverages taxes ($38.5 million).
 Larger than FY2004 corporate adjusted gross income taxes ($443.1 million)
 Nearly four times as large as FY2004 state inheritance tax collections ($132.3 million).
 Indiana FY2004 smoker payments were large enough to support estimated expenditures for:
 The Criminal Justice Institute ($64.1 million)  AND  the Indiana State Police ($146.8 million)  AND  the Dept. of Natural Resources ($166.2 million)  AND  Evansville, Madison, Logansport, Richmond, and Larue State Hospitals combined ($168 million)
 The State Dept. of Health ($274.4 million)  AND  Family and Social Services Administration ($128.7 million)  AND   the Dept. of Child Services ($171 million)
 Indiana University ($533.5 million)
 Purdue University ($360.7 million).

CIGARETTES DON'T PAY TAXES - INDIANA SMOKERS DO!!

Indiana Smokers' Contributions
to the State Economy - FY2002

Smokers Pay Excise Taxes2	$	114,757,000
Smokers Pay Sales Taxes2	$	148,413,580
Smokers Pay Tobacco Settlement Payments3	$	151,000,000
	$	414,170,580

• Income1

Indiana smokers' median household income	$	35,829
Indiana nonsmokers' median household income	$	42,722

• Working Families Pay More1

33.5% of Indiana smokers had household income LESS THAN $25,000




12.0% of Indiana smokers had household income EQUAL TO or GREATER THAN $75,000




The impact of smoker payments on the incomes of working families was more than THREE TIMES the impact on higher income smokers. Those who can afford it least pay a disproportionate percentage of their hard-earned income in smoker payments.

• Smoker excise tax/sales tax/tobacco settlement payments liability in 20024

Total average paid per Indiana smoker in excise and sales taxes	$	213
Cost per Indiana smoker for settlement payments to Indiana	$	122
Total annual payments to Indiana per smoker	$	335
Total annual payments to Indiana per nonsmoker	$	0

TOTAL SMOKER CIGARETTE PAYMENTS TO INDIANA FY2002 Per year: $ 414,170,580 Per day: $ 1,133,937 Per hour: $ 47,247 Per minute: $ 787 Per second: $ 13

1 Centers for Disease Control's Behavioral Risk Factor Surveillance System, 2001
2 Orzechowski & Walker, Arlington, Virginia; from state revenue department.
3 PriceWaterhouseCooper
4 U.S. Census Bureau, 2000 state population and Centers for Disease Control's Behavioral Risk Surveillance System, 2001
5 Tax and Budget Comparisons are from U.S. Census Bureau and the Indiana State Budget Agency, 2003-2005 As-Passed Budget, April 27, 2003. Online at http://www.in.gov/sba/budget/2003_budget/as_passed/index.html. Operating budget amounts, from both general fund and non-general funds.
6 American Economics Group, Inc., The U.S. Tobacco Industry in 1997: Its Economic Impact in the States.

A summary of Indiana state law is provided below
(for specific questions regarding state law, contact your legal advisor.)

Minimum Age	Customers must be 18 years or older to purchase tobacco products. No person may purchase tobacco for delivery to a person under 18 years of age. Violation is a Class C infraction.
Restricted Products	Any product containing tobacco.
Acceptable Forms of Identification	A photographic identification card or a similar card issued under the laws of another state or the federal government, showing that the purchaser or recipient is of legal age to make the purchase.
Fine/Penalty Schedule for Selling to Minors	For a sale to take place, the buyer must pay the retail establishment for the tobacco product. Violation is a Class C infraction, punishable by a fine of $50 for the first offense; a fine of $100 for a second offense within 90 days; a fine of $250 for a third offense within 90 days; and a fine of $500 for fourth and subsequent offenses within a 90-day period. The commission may suspend the certificate of a person who fails to pay a civil penalty imposed for selling or distributing tobacco to minors. The failure to pay the civil penalty is a Class B infraction. A retail establishment may not be issued a citation or summons for a violation of this section more than once every twenty-four (24) hours for each location. A person who commits a violation at least 6 times in any 6-month period commits habitual illegal sale of tobacco, a Class B infraction, punishable by a fine of up to $1,000.
Affirmative Defense	It is a defense if the buyer or recipient produced a photographic ID showing that the purchaser or recipient was of legal age to make the purchase and the appearance of the purchaser or recipient was such that an ordinary prudent person would believe that the purchaser or recipient was not less than the legal age. Unless a minor buys or receives tobacco under the direction of a law enforcement officer as part of an enforcement action, a retail establishment that sells or distributes tobacco is not liable for a violation of this section unless the person less than 18 years of age who bought or received the tobacco is issued a citation or summons.
Minor Possession	The purchase, acceptance or possession of tobacco products by minors is prohibited, except in the course of employment. Violation is a Class C infraction punishable by a fine of up to $500.
Sign Requirement	Retailers are required to conspicuously post and maintain a sign with lettering at least 1/2 inch in height which states: THE SALE OF TOBACCO TO PERSONS UNDER 18 YEARS OF AGE IS FORBIDDEN BY LAW. Failure to post the required sign is a Class C infraction, punishable by a fine of up to $500.
Compliance Checks	As a condition of receiving federal substance abuse block grant funds, federal law requires the State of Indiana to conduct random, unannounced inspections of tobacco outlets to determine compliance rates. Minors may be used as part of the enforcement action, as long as they are supervised by law enforcement officers and have the consent of a parent or guardian. The Alcoholic Beverage Commission and Administration coordinates the inspections.
DISCLAIMER: This information summary is provided as a service of the Coalition, but is not intended to provide legal advice or analysis. These summaries are not intended to be complete representations of state law, which may contain additional rules and restrictions relating to tobacco products not mentioned in this summary, as well as retailing prohibitions related to matters including, but not limited to, state required training, minimum pack size, the sale of loose cigarettes and other restrictions. Retailers should not rely on these summaries as complete or accurate descriptions of applicable federal, state or local law. Users with questions about the law should seek the advice of counsel. Each state law is unique and possibly represents multiple legislative or regulatory acts. Local laws may differ. Check with local authorities for variations from state law. These summaries are not intended to be complete representations of state law.

The reprinting of this information from the Coalition, does not constitute a representation or admission by RJRT that such information is accurate, complete, or a proper characterization of the laws concerned. The Coalition for Responsible Tobacco Retailing is a cooperative effort among retailers, wholesalers and manufacturers who share a common goal: to do all they can to prevent tobacco sales to minors.

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