This bill aims to classify nicotine products as tobacco products and increase tax rates on cigarettes and tobacco products. It amends existing definitions in the law, such as changing "any" to "an" for terms like "consumer" and "dealer," and specifies that "tobacco products" now include substances containing nicotine intended for consumption, while excluding cigarettes and certain nicotine replacement products. The tax rates on cigarettes are significantly increased, with Class A and Class B cigarettes now taxed at one hundred fifty-one and one-half mills each, up from seventy-six and one-half mills.

Additionally, the bill establishes a new healthcare workforce development fund, which will receive a portion of the revenue generated from the increased taxes. Specifically, the first forty-five million dollars collected will go to the general fund, with the next five million directed to the tobacco prevention and reduction trust fund, and the subsequent ten million allocated to the new healthcare fund. The Department of Health will administer this fund, which is intended to support training and growth of the healthcare workforce in South Dakota.

Statutes affected:
Introduced, 02/04/2025: 10-50-1, 10-50-3, 10-50-61, 10-50-52