This bill proposes an increase in the tax on cigarettes and vapor products in Iowa. Specifically, the tax on cigarettes will rise from 6.8 cents to 14.3 cents per cigarette, resulting in an increase from $1.36 to $2.86 for a pack of 20 cigarettes. Additionally, the tax on loose tobacco products dispensed from vending machines will increase from 3.06 cents to 6.43 cents per cigarette. The bill also extends the existing 50 percent wholesale tax rate, which currently applies to most tobacco products, to vapor products, while maintaining their status under sales and use taxes. An inventory tax will be assessed on cigarettes and vapor products remaining in stock that were previously taxed at the lower rates.

Furthermore, the bill includes various conforming changes to existing laws, such as inserting references to alternative nicotine products alongside vapor products, although these alternative nicotine products will not face additional taxation. The legislation aims to align the tax structure for vapor products with that of traditional tobacco products, thereby increasing state revenue from these sources.

Statutes affected:
Introduced: 453A.6, 453A.40, 453A.13, 331.653, 331.756, 453A.32, 453A.15, 453A.33, 453A.42, 453A.48, 453A.51