The bill introduces a new excise tax on consumable vapor products in Alabama, effective October 1, 2026, at a rate of ten cents ($0.10) per milliliter. This tax will apply to all consumable vapor products sold at wholesale or imported for retail sale, with wholesalers acting as agents for the state in tax collection. Importantly, this new tax will replace any business license fees previously imposed on the sale of consumable vapor products, rendering such fees enacted before October 1, 2025, void. Municipalities will still have the authority to issue business licenses for vapor product wholesalers, importers, or retailers, as long as these licenses are not based on sales volume. The bill also outlines the distribution of tax proceeds, with allocations to the State General Fund, counties, and municipalities, and establishes penalties for non-compliance with reporting and recordkeeping requirements.

Additionally, the bill amends existing laws regarding the regulation of tobacco and electronic nicotine delivery systems (ENDS), defining key terms and clarifying the responsibilities of retailers and manufacturers. It requires distributors of tobacco products to obtain a permit with a new annual fee of $150 for alternative nicotine products and ENDS. Starting March 1, 2022, e-liquid manufacturers must certify their products' market status and compliance with FDA regulations, with specific deadlines for applications. The bill also mandates documentation for compliance with federal regulations, establishes a directory of compliant manufacturers, and imposes fines for non-compliance. The act is set to take effect on October 1, 2025, with provisions for the renewal and transferability of permits.

Statutes affected:
Introduced: 28-11-2, 28-11-7, 28-11-17
Engrossed: 28-11-2, 28-11-7, 28-11-17
Enrolled: 28-11-2, 28-11-7, 28-11-17