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, it raises the tax 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 members from both the House of Representatives and the Senate.

The committee will be responsible for reporting its findings and any legislative recommendations by November 1, 2025. The bill's effective date for the tax changes is set for July 1, 2025, while the remainder of the act will take effect upon passage. The fiscal impact is expected to increase revenue for the General Fund and the Education Trust Fund, although the exact amounts are indeterminable at this time. The Department of Revenue Administration anticipates that the changes will lead to significant revenue increases starting in FY 2026, based on current sales data and projections.

Statutes affected:
Introduced: 78:2