The bill HB529 proposes the introduction of a 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 use, with wholesalers responsible for collecting the tax from consumers. Additionally, any existing business license fees related to the sale of these products, enacted before October 1, 2025, will be voided, although municipalities can still issue business licenses not based on sales volume. The bill outlines that tax proceeds will be distributed equally between the State General Fund and local governments based on population ratios. To ensure compliance, sellers must obtain a license from the Alabama Department of Revenue, with penalties for non-compliance classified as a Class B misdemeanor.

The bill also amends existing laws regarding the regulation of tobacco and electronic nicotine delivery systems (ENDS) by defining "e-liquid" as a consumable vapor product and establishing a new permitting process for the distribution of alternative nicotine products, which requires an annual fee of $150. Manufacturers of e-liquids and alternative nicotine products must certify compliance with federal regulations and provide documentation to the commissioner, including proof that their products were on the market as of specific dates. The bill imposes penalties for non-compliance, including daily fines for selling unlisted products and mandates the maintenance of a public directory of compliant manufacturers and products. The act is set to take effect on October 1, 2025, and includes provisions for enforcement of these new regulations.

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