This bill aims to classify nicotine products as tobacco products and increase tax rates on cigarettes and tobacco products in South Dakota. It amends existing definitions in the law, such as changing "consumer" and "dealer" to specify that they refer to individuals and persons engaged in the sale of tobacco products, respectively. The tax rates on cigarettes are significantly increased, with Class A and Class B cigarettes now subject to a tax of one hundred fifty-one and one-half mills per cigarette, up from seventy-six and one-half mills. Additionally, the tax on tobacco products is raised from thirty-five percent to forty-five percent of the wholesale purchase price.

Furthermore, the bill establishes a new healthcare workforce development fund, which will receive a portion of the revenue generated from the increased taxes. Specifically, after the first forty-five million dollars collected annually is allocated to the general fund, the next ten million dollars will be directed to this new fund, which is intended to support training and growth of the healthcare workforce in the state. The Department of Health will administer this fund, allowing for grants to be awarded as needed for its purposes.

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