Tobacco Excise Tax

On March 30, 2021, the Unalaska City Council adopted Ordinance 2021-02, instituting an excise tax on cigarettes and tobacco products brought into the City of Unalaska for commercial purposes. The effective date of the ordinance is July 1, 2021, with the exception of the tax levy itself, which is effective on October 1, 2021. Click on the link below for a copy of the ordinance.

The new excise tax is imposed on the privilege of bringing cigarettes and tobacco products into the City of Unalaska for commercial purposes. The tax is levied on and will be collected from distributors of cigarettes and tobacco products.

The tax levy is $2 per pack of cigarettes and 40% of the wholesale price of other tobacco products, and is levied on cigarettes and tobacco products brought into the City of Unalaska for commercial purposes. Excise tax is different from the City’s sales tax, which is added at the point of sale. Excise tax is levied on the distributor, and will essentially increase a distributor’s cost of goods, thereby increasing the purchase price paid by the consumer.

The intended purpose of the tax is to improve public health by reducing consumption of cigarettes and tobacco products due to increased price. The City Council dedicated the revenue generated by the excise tax to the City’s Community Support Grant Program for the benefit of public health programs or tobacco education and cessation programs in Unalaska.

All distributors of cigarettes and tobacco products in Unalaska / Dutch Harbor must register with the City of Unalaska. Click on the link below for the distributor registration form.

Reporting and payment of the excise tax is to be done quarterly, on the same schedule as sales tax reporting and payment. Tobacco excise tax reports are due, along with payment of the tax, on or before 5pm of the last day of the month following the end of each calendar quarter, or postmarked by the deadline. Click on the link below for the Tobacco Excise Tax Report.