Regulation · 26 October 2026 · Stefan Bensmo

ZYN tax by state 2026: which US states tax nicotine pouches – and what it does to the price

Short answer: at least 20 US states and Washington, D.C. now tax nicotine pouches such as ZYN, VELO and on!. The heaviest taxes are percentage-based: 95% in Washington and Minnesota, 80% in Rhode Island and 75% in New York, which took effect on September 1, 2026 and explains the jump in searches for “zyn tax”. Other states tax per can or by weight, and the design of the tax matters almost as much as the rate.

Which states tax nicotine pouches?

The table below lists the states whose rates we have checked against the state’s own tax or legislative page as of October 26, 2026. The rates apply to tobacco-free nicotine pouches, including those with synthetic nicotine, unless otherwise noted.

According to the Tax Foundation’s state overview, pouches are also taxed in Indiana ($0.50 per ounce), Vermont ($2.57 per ounce), Louisiana (20%), Maryland (60%), Nevada (30%), New Hampshire (65.03%), New Jersey (30%) and Washington, D.C. (64%), and Iowa will add $0.05 per can from 2027. We have not verified those rates at the state level, and the Tax Foundation table contains errors for several states, so treat them as indicative.

Two special cases: in Maine, the law covers products containing “natural or artificial” nicotine, but it is unclear whether pouches fall under the per-ounce smokeless rate or the 75% rate for other tobacco (Maine statute). In Texas, the state Supreme Court ruled in May 2026 that VELO pouches can be taxed as a “tobacco substitute”, while nicotine alone is not enough to trigger the tax (Texas Public Radio).

Why “zyn tax” searches spiked in 2026

New York’s 75% tax took effect on September 1, 2026. The state tax department published notice N-26-2 in July, and retailers had to pay a one-time tax on stock held on August 31. Local news coverage of the “ZYN tax” peaked in August and September, which matches the search curve. Washington’s 95% rate, in force since January 2026, is the steepest percentage tax in the country.

What the tax does to the price of a can

Examples from the past year show how much the shelf price moves:

• Illinois: after the rate rose to 45% in July 2025, a can of ZYN costing about $5.60 before tax was sold for $9.92 including taxes in a Chicago store (Axios).
• Rhode Island: in testimony to the state senate, Philip Morris International (PMI) said pouch volume fell 27% in the first quarter after the 80% tax, while sales rose in neighboring Connecticut and Massachusetts, which do not tax pouches (PMI testimony). It is PMI’s own claim, based on one quarter of data.
• Washington: local media report that consumers are crossing into Idaho to buy pouches, but no figures have been published.

The tax design matters as much as the rate

States use three different models, and each one rewards a different product strategy:

• Percentage of price (most states): the tax follows the wholesale or list price. A cheaper can carries less tax in dollars, which strengthens price-led challengers.
• Per can (Oregon, Utah, North Carolina, Iowa): the same tax regardless of price, which favors premium brands. Oregon and Utah only charge extra above 20 pouches, so a 20-pouch can is the most tax-efficient size.
• By weight (Vermont, Indiana and possibly Maine): heavier, moister pouches pay more per can than dry, light ones.

The timing is not random. In October 2026, PMI moved its main ZYN strengths from 15 to 20 pouches per can at the same price – a 25% price cut per pouch, according to the company’s own third-quarter earnings call. In percentage-tax states, the tax per can stays the same if the wholesale price is unchanged, so the tax per pouch falls by a quarter. In per-can states, the 20th pouch is tax-free. See our analysis of how ZYN and VELO compete.

A federal tax is proposed but not moving

The End Tobacco Loopholes Act (S.819), introduced in March 2025, would tax nicotine pouches at $100.66 per 1,000 pouches – about $2 per 20-pouch can – and tax synthetic nicotine per milligram (bill text). We have found no sign that the bill has advanced beyond introduction.

What it means for brands and distributors

Our read State taxes are quickly becoming the second regulatory barrier in the US after FDA authorization. A brand that prices nationally will be undercut in per-can states and overpriced in 95% states. Four practical points:

• Build the price architecture state by state. The same can can carry less than a dollar of tax in North Carolina and several dollars in Washington or Minnesota.
• Choose can size and pouch weight with taxes in mind. Twenty pouches is the threshold in several per-can states, and weight taxes penalize heavy pouches.
• Communicate price per pouch. When can sizes change, the price per can stops being comparable for consumers and retailers.
• Expect leakage across state lines and online. Plan distribution and stock for neighboring states when a high tax is introduced.

Read more about FDA authorization of nicotine pouches, the ZYN shortage and nicotine pouch taxation in the EU.