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  • Feb 24, 2026
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Delaware Proposes Tobacco Tax Hikes to Close $500M Gap, Including E‑cigarettes and Nicotine Pouches

02-17 · fiscal & policy

Delaware Proposes Tobacco Tax Hikes to Close $500M Gap, Including E‑cigarettes and Nicotine Pouches

Governor Matt Meyer's FY2027 budget plan seeks sharp increases on cigarettes, moist snuff, e‑liquid, and adds nicotine pouches to taxable products

Key takeaways

  • Cigarette tax: from $2.10 to $3.60 per pack (if budget approved).
  • Moist snuff: from $0.92 to $1.23 per ounce.
  • E‑liquid: from 5¢ to 10¢ per milliliter.
  • Other tobacco products: wholesale tax increased by 10%.
  • Tax base expansion: "taxable tobacco products" redefined to include nicotine pouches and other novel nicotine items.
  • Revenue goal: part of a plan to close a $500+ million budget gap; tobacco changes expected to generate ~$19 million of the total ~$160 million in new revenue.
  • Mixed local reactions: some residents support the health‑motivated tax, while small merchants fear lost sales, especially among low‑income customers.

Delaware — Tobacco product prices in Delaware could soon rise under Governor Matt Meyer's proposed FY2027 budget, unveiled last month.

If approved by the legislature, the cigarette tax would jump from $2.10 to $3.60 per pack. Other nicotine product taxes would also increase: moist snuff from $0.92 to $1.23 per ounce, e‑liquid from 5¢ to 10¢ per milliliter, and a 10% hike on the wholesale tax for other tobacco products.

The plan also expands the definition of "taxable tobacco products" to include novel nicotine products like nicotine pouches.

This tax package is part of the state's effort to close a budget gap exceeding $500 million. Overall, it is projected to generate about $160 million in new revenue, with nearly $19 million coming from the tobacco tax adjustments.

Community voices — support and concern

Supporter: Kent County resident Terry Englandin said she backs the tax. "It's still a nasty habit. So I'm all for taxing it, making the tobacco users pay for it."

Small business concerns:

  • Ty Shaw (Cheswold Tobacco): "Any tax is bad for business. Most of our customers are lower income, and this will hit them hard." He noted the industry has seen repeated price increases: "Last year, about six increases. This year, already two or three since January. It doesn't seem to stop."
  • Megan Breedlove (Lynch Heights convenience store clerk): A sharp price hike could drive customers away. "When they see the price go up that much, they'll ask, 'What then?' — we could lose half our customers, because many come specifically for these products." She believes the impact extends beyond smokers: "I don't think it's fair, people should oppose it. Whether you smoke or not, it affects businesses."

The governor released the draft budget in January. The Joint Finance Committee is currently holding hearings, and the legislature must pass a final spending plan by July 1.

Source: 2Firsts, February 17, 2026 · based on reporting by WBOC · Cover image: WBOC

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