The bill HB357 amends the Code of Alabama 1975 to introduce a tax on heated tobacco products and clarify definitions related to tobacco products. It establishes a new definition for "heated tobacco product," which refers to products designed to be heated and produce an inhalable aerosol without combustion, and expands the definition of "cigarette" to include those intended to be heated. The bill imposes a tax of $0.017 per single-use consumable unit of heated tobacco products, effective November 1, 2025. Additionally, it modifies existing tax structures for various tobacco products while maintaining the tax on traditional cigarettes, and updates the language regarding tax collection to ensure wholesalers and retailers act as agents for the state.

Moreover, HB357 expands the definition of contraband goods to include heated tobacco products, allowing for their seizure without a warrant. It requires individuals transporting unstamped tobacco products to possess an active tobacco or transporter's permit, with penalties for non-compliance. The bill mandates monthly reporting of tobacco product transactions by wholesalers and jobbers, including heated tobacco products, and presumes possession of more than 30 packages of unstamped products as an attempt to evade taxes. Local governments are authorized to levy taxes on cigarettes and heated tobacco products based on a millage rate. The act aims to modernize tobacco product regulation and taxation, ensuring compliance with state laws while benefiting local governments from new tax revenues.

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