This bill proposes the creation of new tax regulations on various tobacco products, including cigars, alternative tobacco products, electronic smoking devices, and their substances, as well as amendments to existing definitions and tax collection procedures. Key insertions include a detailed definition of "alternative tobacco products," which encompasses noncombustible products containing nicotine intended for human consumption, and the establishment of separate tax rates for different tobacco products. Specifically, the bill introduces a tax of 32% on the wholesale price of cigars, 28% on other tobacco products and alternative tobacco products, and 28% on electronic smoking devices and their substances. Additionally, it amends the existing tax structure for cigarettes, introducing two new tax rates of 17 mills and 12.5 mills per cigarette.

Furthermore, the bill establishes a Tobacco Tax Distribution Fund, which will receive a portion of the tax revenue collected and is designated for ongoing appropriations to the Department of Health and Human Services. This fund will support local public health units and organizations providing crisis hotline services. The effective date for the new tax provisions is set for taxable events occurring after June 30, 2025. Overall, the bill aims to enhance public health funding through increased taxation on tobacco products while updating the legal framework surrounding their definitions and taxation.

Statutes affected:
INTRODUCED: 57-36-01, 57-36-31, 57-36-32