Tobacco Stamps- Neat Revenue Stamps, Missing from Many Collections!
In 1862, Congress began creating new taxes to help with the expense of fighting the Civil War. Taxes were typically added to products considered "sinful" - such as tobacco and alcohol. Stamps proving the tax had been paid - thus, "taxpaids" - began in 1868 for tobacco products. They were more formally known as "excise taxes." This was just one way government revenue was raised.
Along with taxing the sale of the products themselves, the U.S. government also began requiring a license for people or companies that created or sold these products. "Special Tax Stamps" indicating these licenses had been paid were first issued in 1873.