SSB3145: Senate's Tobacco/Vape Tax Increase

Raises excise taxes on cigarettes (from 6.8 to 10.05 cents per cigarette), tobacco products (from a combined 50% to 55% of wholesale price), snuff (from $1.19/oz to 55% of wholesale price), and cigars (tax cap from 50 to 55 cents per cigar). It imposes a new 15% excise tax on both vapor products and consumable hemp products at retail sale. The bill aligns definitions, enforcement, and reporting requirements for these products, and directs all related revenue into the health care trust fund. It also appropriates $1 million each to the Department of Health and Human Services (for the Double Up Food Bucks Program) and the Department of Justice (for human trafficking victim assistance grants).

Key Points & Impacts

• Increases cigarette tax from 6.8 cents to 10.05 cents per cigarette, raising the cost per pack from $1.36 to $2.01.

• Raises the tax on tobacco products (excluding cigarettes, little cigars, and snuff) from a combined 50% to 55% of the wholesale sales price; increases cigar tax cap from 50 to 55 cents per cigar.

• Changes snuff tax from $1.19 per ounce to 55% of the wholesale sales price, aligning it with other tobacco products.

• Establishes a new excise tax of 15% on the retail sales price of vapor products and consumable hemp products, collected at point of sale.

• Expands enforcement, reporting, and inventory tax requirements to include vapor and consumable hemp products, with all related definitions updated for consistency.

• Directs all new and increased excise tax revenues to the state health care trust fund, including specific provisions for vapor and hemp product taxes.

• Appropriates $1 million from the health care trust fund to the Department of Health and Human Services for the Double Up Food Bucks Program to improve access to fresh produce for SNAP recipients.

• Appropriates $1 million from the health care trust fund to the Department of Justice for grants to care providers serving human trafficking victims.

Committee voted in favor 9-8, but failed to meet 10 vote required threshold for advancing the bill (majority of committee members). Therefore, bill failed. There is a House version, but it does not include the tobacco tax.