Ross Marchand, executive director of the Taxpayers Protection Alliance, said on March 13 that Delaware’s proposed cigarette tax increase in HB 215 would worsen cigarette smuggling and undermine the state’s revenue goals. He said lawmakers should reject the measure because Delaware already faces a significant illicit export problem that higher rates could intensify.
The proposal would raise Delaware’s cigarette excise tax from $2.10 per pack to $3.60, along with increasing taxes on other tobacco and vapor products and raising licensing fees. The bill would make cigarettes more expensive in Delaware and could deepen incentives for cross-border purchasing and illicit diversion as lawmakers consider the measure, according to the bill summary.
“Hiking taxes on cigarettes will be a boon to black markets and actually result in less tax revenue getting collected. According to the Mackinac Center for Public Policy, Delaware is a top five export state for smuggled cigarettes. That problem will only get worse if Delaware lawmakers move forward with destructive tax hikes,” Marchand said.
The Mackinac Center’s 2025 update estimated Delaware as the nation’s third-largest cigarette export state for smuggled cigarettes at 38 percent, trailing only Wyoming and Virginia. That ranking supports arguments that Delaware already has a major illicit cigarette problem, and that a steeper tax burden could further encourage diversion of product into untaxed or illegal channels.
According to the Tax Foundation, California—one of the highest-tax cigarette states—now leads the U.S. in cigarette smuggling, estimating 52.5% of cigarettes consumed there in 2023 were not purchased legally in-state. The analysis highlights a strong relationship between higher excise taxes and increased black market diversion, supporting concerns that Delaware’s proposed hike could lead to similar outcomes.
The Government Accountability Office reported in 2025 that federal tobacco excise tax revenue fell by more than 30% over the last decade, with revenue dropping by over $5 billion between 2014 and 2024. This long-term erosion shows why tobacco taxes are considered a weak source for recurring spending: even when rates stay high, the underlying base keeps shrinking as smoking declines and consumers shift to other products.
Marchand serves as executive director of the Taxpayers Protection Alliance, a nonprofit taxpayer and consumer advocacy group whose published work focuses on taxes, healthcare, telecom, and government accountability issues. Washington D.C.-based Taxpayers Protection Alliance Foundation is a non-profit organization advocating for government transparency through research about excessive taxation and spending by all levels of government, according to the official website.
