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 applies to all consumable vapor products sold at wholesale or imported for retail sale, with the intention of ultimately passing the burden to consumers. The legislation replaces any existing business license fees related to the sale of these products, rendering prior laws imposing such fees void. However, municipalities can still issue business licenses for wholesalers, importers, or retailers, as long as these licenses are not based on sales volume. The tax proceeds will be distributed equally between the State General Fund and local governments based on population ratios, while prohibiting any new local taxes on vapor products after the bill's effective date.

Additionally, the bill mandates that sellers of consumable vapor products obtain a license from the Alabama Department of Revenue, with penalties for non-compliance classified as a Class B misdemeanor. It requires comprehensive recordkeeping and reporting of sales and tax payments, allowing the department to audit these records. The bill also amends existing laws to enhance the regulatory framework for tobacco and electronic nicotine delivery systems (ENDS), including the definition of "e-liquid" and the requirement for distributors to obtain permits. Manufacturers must certify compliance with federal regulations and provide documentation regarding their products, with a directory of compliant manufacturers to be maintained and publicly accessible. The act is set to take effect on October 1, 2025.

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