The proposed bill S.198 seeks to strengthen the regulation and taxation of tobacco products and substitutes in Vermont. It expands the definition of tobacco substitutes to include nicotine pouches and increases the fees for tobacco licenses to $1,000, while decoupling tobacco licensure from liquor licensure. The bill raises penalties for selling tobacco products without a license and for selling to minors, with fines reaching $2,000 for first offenses and $5,000 for subsequent offenses. It also eliminates prohibitions on minors' purchase, use, and possession of tobacco products and mandates the destruction of contraband tobacco products at the violator's expense, adhering to hazardous waste regulations.

Additionally, the bill establishes a new investigator position within the Department of Liquor and Lottery to enforce laws related to the sales and delivery of alcohol and tobacco products. It requires tax stamps for tobacco substitutes and imposes higher taxes on those with a nicotine concentration of five milligrams or more per gram. The bill also modifies tax rates and penalties for the sale of cigarettes and tobacco substitutes, ensuring that all funds collected from violations and increased licensing fees are directed to the Tobacco Trust Fund for cessation and prevention activities. The act is set to take effect on July 1, 2026, with a report on the Investigator's activities due by December 15, 2027.

Statutes affected:
As Introduced: 7-40, 3-167a, 18-9502, 32-3102, 32-7702, 32-7731, 32-7734, 32-7771, 32-7772, 32-7774, 32-7775, 32-7776, 32-7777, 32-7779, 32-7780, 32-7782