The bill HB357 amends the Code of Alabama 1975 to introduce a tax on heated tobacco products, establishing a new definition for "heated tobacco product" and "cigarettes intended to be heated." The tax on these products is set at $0.017 per single-use consumable unit, effective November 1, 2025. The legislation maintains the existing tax structure for traditional tobacco products while clearly delineating the taxation of heated tobacco products. It also mandates the Commissioner of Revenue to prepare and issue tax stamps for these products, with provisions for alternative tax reporting methods if necessary. Local governments are permitted to impose taxes on heated tobacco products at half the state tax rate, collected at the point of sale.

Additionally, the bill expands the definition of contraband goods to include heated tobacco products, allowing for their seizure without a warrant if found outside licensed locations. It requires individuals transporting unstamped tobacco products to possess a valid permit, with violations leading to confiscation. Wholesalers and jobbers must report their transactions monthly, including those involving heated tobacco products, and possession of more than 30 packages of unstamped products is presumed to be for tax evasion. The act aims to streamline the taxation process while ensuring compliance and allowing local governments to levy taxes in accordance with state regulations. The bill is set to take effect on November 1, 2025.

Statutes affected:
Introduced: 40-25-1, 40-25-2, 40-25-4, 40-25-8, 40-25-8, 40-25-14, 40-25-18, 40-25-25, 40-25-29
Engrossed: 40-25-1, 40-25-2, 40-25-4, 40-25-8, 40-25-8, 40-25-14, 40-25-18, 40-25-25, 40-25-29
Enrolled: 40-25-1, 40-25-2, 40-25-4, 40-25-8, 40-25-8, 40-25-14, 40-25-18, 40-25-25, 40-25-29