Current tobacco tax rates
Oregon voters passed Measure 108, which included a tax on inhalant delivery systems, changed the way little cigars are taxed, and increased the cigar tax cap to $1 per cigar.
The tax rates are:
- Cigars – 65 percent of the wholesale sales price. The maximum tax is $1 per cigar. Little cigars collectively weighing 3 pounds or less per 1,000 are considered cigarettes for taxation purposes. Please see
cigarette tax overview to read more about Oregon’s cigarette and little cigar tax laws.
- Moist snuff – $1.78 per ounce. The minimum tax is $2.14 per retail container. Moist snuff includes any form of tobacco that is not intended to be smoked or placed in the nasal cavity.
- All other tobacco products, including inhalant delivery systems – 65 percent of the wholesale sales price.
Tobacco products include: inhalant delivery systems, cigars, smokeless tobacco (snuff, chewing tobacco, SNUS, dissolvables containing tobacco, etc.), blunt wraps, pipe tobacco, shisha, roll-your-own, and any other kinds and forms of tobacco that can be chewed or smoked, except cigarettes and little cigars.
Measure 108 Frequently Asked Questions
We have received several questions about the changes to Oregon’s Cigarette and Tobacco Tax programs made by Measure 108. We will continue to update this list with more information.
Q. I’m a retailer of tobacco products and don’t have invoices with the wholesale sales price of the inhalant delivery systems in my inventory on January 1, 2021, to report on Form 531, how do I pay the tobacco tax on these products?
A. If a retailer of tobacco products does not have records indicating the wholesale sales price of the inhalant delivery systems in their inventory on January 1, 2021, the retailer should make a reasonable estimate of the wholesale sales price and pay the tax on that amount as allowed in OAR 150-323-0330(2). If a retailer elects to make a reasonable estimate of the wholesale sales price the retailer should document the methodology used to make the estimate (industry knowledge, comparable wholesale sales, other reasonable method) and retain those records.
As an example, Store ABC has inventory of inhalant delivery systems in inventory and cannot determine the wholesale sales price using the method prescribed by OAR 150-323-0330(1). Store ABC has industry knowledge and comparable wholesale sales that indicate the price includes a 40 percent markup from the wholesale sales price for certain products. Store ABC must maintain records indicating those inhalant delivery systems that include a 40 percent markup. Store ABC also has other inhalant delivery systems in inventory and may make a determination on a case-by-case basis to determine the wholesale price and maintain records for those products.
Effective January 1, 2021, inhalant delivery systems are taxed as tobacco products at 65 percent of the wholesale purchase price. You must be licensed as an Oregon tobacco distributor if you intend to distribute inhalant delivery systems to Oregon retailers.
Examples of taxable inhalant delivery system products are:
- E-cigarettes (reusable and disposable).
- Vape products, vape devices, and components.
- Liquid or e-juice, regardless of whether or not it contains nicotine.
- Vape devices, including tobacco and hookahs (does not include devices marketed or sold soley for the purpose of vaporizing or aerosolizing marijuana products).
Delivery inhalant system products not subject to Oregon tobacco tax include:
- Battery chargers, if sold separately.
- Lanyards or straps, if sold separately.
- Any product that has been approved by the U.S. Food and Drug Administration for sale as a tobacco cessation product or for any other therapeutic purpose, if the product is marketed and sold soley for the approved purpose.
- Marijuana items as defined in ORS 475B.015.
If you buy untaxed tobacco products then you are responsible for paying the tax, whether you are a business or have purchased the tobacco products for personal use.
You must purchase tobacco products from licensed Oregon distributors who have paid the tax. If you want to purchase untaxed tobacco products and sell them to customers in Oregon, you must apply for a distributor's license. Click here for a list of the
currently licensed Oregon distributors.
You must keep receipts and invoices for tobacco products for 5 years, or until the products are sold, whichever is longer. Receipts and invoices must be available for inspection by us. Read more about the
If you purchase untaxed tobacco products, you’re responsible for paying the tax. You must file an
Oregon Unlicensed Tobacco Quarterly Tax Return, Form 531, for every quarter you purchase untaxed tobacco products.
You must apply for a Permit for Transportation of Untaxed Tobacco Products to possess, acquire for transportation, or transport untaxed tobacco products in Oregon. You can complete and submit an application for a Permit for Transportation of Untaxed Tobacco Products electronically using Revenue Online.
You need an Oregon Distributor License before distributing tobacco products in Oregon. You must be licensed for each location where you sell tobacco products. Distributor licenses are non-transferable. Read more about the
Penalty and interest
We’ll charge a penalty of 5 percent of the amount due for any failure to file a report or return or failure to pay the tax by the due date. If the amount due isn’t paid within 30 days, we’ll charge an additional 20 percent penalty. Interest is added to any unpaid amount, calculated from the time the tax becomes due. Interest will be at the rate established under Oregon law. Additionally, you may be subject to a civil penalty of up to $1,000 per violation of state other tobacco products tax laws.