This bill proposes an increase in taxes on cigarettes and electronic cigarettes, raising the tax on a package of 20 cigarettes from $1.78 to $2.78. Additionally, it modifies the tax structure for electronic cigarettes, changing the tax on closed cartridges from a fixed rate of $0.30 per milliliter to 65% of the wholesale sales price, and for open containers from 8% to 65% of the wholesale sales price. The bill also establishes a committee tasked with studying taxes on tobacco and other nicotine products, which will consist of three members from the House of Representatives and one member from the Senate, with provisions for compensation for their travel expenses.

The committee is required to report its findings and any legislative recommendations by November 1, 2025. The bill's tax changes are expected to generate indeterminable revenue increases for the General Fund and the Education Trust Fund starting in FY 2026, with the potential for significant revenue growth based on current sales data. The Department of Revenue Administration will implement the necessary updates to tax return forms and systems to accommodate these changes without additional budgetary needs.

Statutes affected:
Introduced: 78:2