Lawmakers hear hours of testimony on bill to raise cigarette tax, expand levies to vapes and pouches

The House Finance and Taxation Committee heard several hours of testimony on House Bill 1570, Representative Vicki Steiner’s proposal to increase North Dakota’s cigarette excise tax and to apply new excise rules to electronic nicotine delivery systems and other alternative tobacco products.

Steiner, R‑District 37, said the bill is primarily a public‑health measure aimed at deterring youth from starting nicotine use. “The point of the bill is not the money,” Steiner said. “Increasing the price of commercial tobacco products is one of the most effective ways to prevent children from starting a nicotine habit.”

The sponsor presented proposed tax changes and a revenue allocation: testimony records the sponsor listing a proposal that would raise the state cigarette excise tax well above the current 44¢ per pack and extend special taxes to newer products. In the hearing the sponsor cited different figures in separate remarks; later in testimony she explicitly listed rates intended for committee review: she said the cigarette tax would be raised to $1.53 per pack, the can‑of‑snuff rate would move from 60¢ to $1.96 per ounce, chewing tobacco from $0.16 to $0.52 per ounce, and a first‑time excise at 56% of wholesale for e‑cigarettes and nicotine vaping products. The sponsor also proposed that 50% of revenues go to the general fund and 50% to regional health centers for counseling and behavioral‑health services. (The transcript contains an earlier reference to $1.90 per pack; the sponsor later listed $1.53 when reading a detailed rate chart.)

Multiple public‑health and youth‑advocacy groups supported the bill. Tony Burke of the American Heart Association and Heather Austin of Tobacco Free North Dakota urged the committee to modernize tax policy to close a perceived loophole for alternative nicotine products and to reduce youth use. Students and youth advocates from Bismarck testified about school vaping and synthetic nicotine pouches, and the testimony included a high‑profile anecdote of a young person in Fargo who required a double lung transplant and whose family and physicians linked the injury to vaping.

Steiner said the Tax Department requested a January 2026 effective date to give retailers time to comply and the sponsor offered a technical amendment to accommodate that timing. She also said the attorney general and tax department offered no enforcement issues in preliminary review.

Opposition testimony came from convenience‑store operators, petroleum marketers and business groups that called the proposal a regressive “sin tax” that would hurt small retailers and low‑income consumers, reduce sales and risk black‑market activity. The North Dakota Petroleum Marketers Association and several convenience store owners warned of lost sales and stated that tobacco sales and excise tax receipts have already declined in recent years. Americans for Tax Reform and the Greater North Dakota Chamber urged a do‑not‑pass recommendation, saying higher taxes will slow business and produce unreliable revenue once smuggling and cross‑border purchases are considered.

Manufacturers and a representative of PMI International noted that some alternative nicotine products have much lower levels of known toxicants than combustible cigarettes and cited recent FDA marketing authorizations for certain nicotine pouches; those witnesses argued policy should be based on the FDA’s public‑health standard.

The hearing closed after extensive testimony and questioning. The committee did not take a vote on HB 1570 during the session.

What matters next: If the committee advances the bill it would go to the floor with any committee amendments and a fiscal note. The transcript records the sponsor’s proposed rates and the 50/50 allocation; some numeric points in testimony were inconsistent and would need clear committee language before any fiscal estimate or vote.