Smoking is often cited as an example of an inelastic good, however, i.e. a large rise in price will only result in a small decrease in consumption. Many nations have implemented some form of tobacco taxation. As of 1997, Denmark had the highest cigarette tax burden of $4.02 per pack. Taiwan only had a tax burden of $0.62 per pack. The federal government of the United States charges $1.01 per pack.Cigarette taxes vary widely from state to state in the United States. For example, Missouri has a cigarette tax of only 17 cents per pack, the nations lowest, while New York has the highest cigarette tax in the U.S.: $4.35 per pack. In Alabama, Illinois, Missouri, New York City, Tennessee, and Virginia, counties and cities may impose an additional limited tax on the price of cigarettes. Sales taxes are also levied on tobacco products in most jurisdictions. In the United Kingdom, a packet of 20 cigarettes has a tax added of 16.5% of the retail price plus £4.90. The UK has a significant black market for tobacco, and it has been estimated by the tobacco industry that 27% of cigarette and 68% of handrolling tobacco consumption is non-UK duty paid (NUKDP).In Australia total taxes account for 62.5% of the final price of a packet of cigarettes (2011 figures). These taxes include federal excise or customs duty and Goods and Services Tax.
As of 31 March 2008 Canada has introduced a smoke-free law in all public places, as well as within 10 metres of an entrance to any public place. In Australia, smoke-free laws vary from state to state. Currently, Queensland has completely smoke-free indoor public places (including workplaces, bars, pubs and eateries) as well as patrolled beaches and some outdoor public areas. There are, however, exceptions for designated smoking areas. In Victoria, smoking is restricted in railway stations, bus stops and tram stops as these are public locations where second-hand smoke can affect non-smokers waiting for public transport, and since 1 July 2007 is now extended to all indoor public places. In New Zealand and Brazil, smoking is restricted in enclosed public places including bars, restaurants and pubs. Hong Kong restricted smoking on 1 January 2007 in the workplace, public spaces such as restaurants, karaoke rooms, buildings, and public parks (bars which do not admit minors were exempt until 2009). In Romania smoking is illegal in trains, metro stations, public institutions (except where designated, usually outside) and public transport. In Germany, in addition to smoking bans in public buildings and transport, an anti-smoking ordinance for bars and restaurants was implemented in late 2007. A study by the University of Hamburg (Ahlfeldt and Maennig 2010) demonstrates, that the smoking ban had, if any, only short run impacts on bar and restaurant revenues. In the medium and long run no negative effect was measurable.