BILL NUMBER: S2425
SPONSOR: HOYLMAN-SIGAL
 
TITLE OF BILL:
An act to amend the tax law, in relation to increasing the tax imposed
on the sale of tobacco products and the retail sale of vapor products
 
PURPOSE:
This legislation will increase the tax imposed on the sale of tobacco
and vapor products.
 
SUMMARY OF PROVISIONS:
Section 1 of the bill amends subdivision 471-b of the tax law to
increase the tax on tobacco products other than little cigars from 75%
of wholesale price to 129% of wholesale price. It also moves snuff from
a tax by weight model to a tax based on the wholesale price.
Section 2 of the bill amends Section 1181 of the tax law to increase the
tax on vapor products from 20% of receipts from the retail sale to 48%
of receipts from the retail sale of such products.
Section 3 of the bill establishes the effective date.
 
JUSTIFICATION:
Studies consistently show that regularly increasing taxes on tobacco
products is one of the most effective ways to reduce new tobacco initi-
ation and encourage cessation, particularly among youth and young adults
who are especially price conscious.
After the federal tobacco tax was increased in 2009, researchers from
the University of Illinois at Chicago found that a nationally represen-
tative survey of 8th, 10th, and 12th grade students showed that students
who reported using smokeless tobacco products dropped between 16% and
24%. The researchers estimated that there would have been approximately
135,000 - 203,000 more smokeless tobacco users among middle school and
high school students had the federal tax not been increased.
However, New York has not increased its tax rates on tobacco products
since 2010. To discourage tobacco usage, reduce health care costs, and
improve health outcomes for New Yorkers, this bill would increase the
tax on tobacco products from 75% of wholesale price to 129% of wholesale
price, and increase the tax on receipts from the retail sale of vapor
products from 20% to 48%. It would also move snuff from being taxed by
weight to being taxed by a percentage of its wholesale price, as other
tobacco products are, to keep up with inflation.
 
LEGISLATIVE HISTORY:
A.11123 of 2019-2020 (Rosenthal): Died in Ways .& Means
 
FISCAL IMPLICATIONS:
To be determined.
 
EFFECTIVE DATE:
This act shall take effect immediately.

Statutes affected:
S2425: 1181 tax law