The bill proposes substantial changes to the taxation of cigarettes, tobacco products, vapor products, and consumable hemp products in Iowa. It amends Section 453A.6 to increase the tax on cigarettes from six cents to ten cents per cigarette, and from eight-tenths of a cent to five hundredths of a cent for each cigarette dispensed from vending machines. Additionally, the tax rate on tobacco products is raised from twenty-two percent to fifty-five percent of the wholesale sales price, with specific provisions for little cigars and snuff. New excise taxes of 15% will be imposed on the retail sales of vapor products and consumable hemp products, with all revenues directed to the health care trust fund.

The bill also includes appropriations from the health care trust fund for the fiscal year 2026-2027, allocating $1 million to the Department of Health and Human Services to support the Double Up Food Bucks program, which aims to make fresh produce more accessible to low-income families. Another $1 million is designated for the Department of Justice to provide grants for services to victims of human trafficking. Furthermore, the bill updates various sections of the Iowa Code to ensure uniform application of regulations and tax laws across tobacco and vapor products, while outlining the responsibilities of distributors and retailers in maintaining records and reporting sales to enhance compliance and enforcement.

Statutes affected:
Introduced: 453A.6, 453A.43, 331.653, 331.756, 453A.32, 453A.15, 453A.33, 453F.2, 453A.45, 422.25, 204.7