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 sets a tax rate of $0.017 per single-use consumable unit for heated tobacco products, effective November 1, 2025, while also modifying existing tax structures for traditional tobacco products. It mandates that the Commissioner of Revenue issue stamps for these products and allows for alternative tax reporting methods if stamp issuance is impractical. Furthermore, the bill replaces existing local taxes or license fees on the sale of these products, with exceptions for local taxes enacted before May 18, 2004.

Additionally, HB357 introduces new county and municipal taxes on heated tobacco products and establishes that wholesalers, jobbers, and retailers are responsible for collecting these taxes at the point of sale. The bill expands the definition of contraband goods to include heated tobacco products, allowing for their seizure without a warrant if found in unauthorized locations. It requires individuals transporting untaxed tobacco products to possess a tobacco or transporter permit, with penalties for violations based on the quantity involved. The bill also mandates monthly reporting of tobacco product transactions by wholesalers and jobbers, including heated tobacco products, and imposes fines for failing to affix required tax stamps. Overall, HB357 aims to streamline the taxation process for tobacco products while ensuring local governments can impose certain taxes, with the act 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