House Bill No. 2742 amends existing Oklahoma law regarding the taxation and definition of cigarettes. The bill redefines "cigarette" to include rolled tobacco intended to be heated or burned, and it removes the previous language that included substitutes. Additionally, it introduces a new tax exemption for cigarettes intended to be heated rather than burned, allowing for a 50% reduction in the tax levied under the relevant sections of the law. The bill also clarifies the definitions of various terms related to the sale and distribution of cigarettes, including "wholesaler," "retailer," and "delivery sale."

Furthermore, the bill mandates that the Oklahoma Tax Commission create distinct stamps for cigarettes intended to be heated, ensuring that these stamps are available by the effective date of the act, which is set for November 1, 2025. The legislation aims to streamline the regulatory framework surrounding cigarette sales and taxation while providing specific exemptions for certain sales, including those to veterans' hospitals and federally recognized tribes.