This bill aims to classify nicotine products as tobacco products, increase tax rates on cigarettes and tobacco products, and establish a healthcare workforce development fund. Key amendments include redefining terms related to consumers, dealers, distributors, and tobacco products, with specific insertions clarifying that tobacco products now include substances containing nicotine intended for consumption, while excluding cigarettes and nicotine replacement products approved for treating tobacco dependence. 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 per cigarette, up from seventy-six and one-half mills.

Additionally, the bill imposes a new tax rate of forty-five percent on the wholesale purchase price of all tobacco products, which is an increase from the previous thirty-five percent. Revenue generated from these taxes will be allocated to various funds, including the general fund, the tobacco prevention and reduction trust fund, and a newly created healthcare workforce development fund. The latter will receive ten million dollars from revenues exceeding fifty million dollars annually, aimed at training and expanding the healthcare workforce in South Dakota. The Department of Health will administer this fund, with continuous appropriations for its intended purposes.

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