Committee holds public hearing on bill to tax and enforce illegal vape sales; industry and health groups give mixed views

Lawmakers held a public hearing on HB529, a bill that would impose a 10¢ per milliliter tax on e‑liquid, give the Alabama Alcoholic Beverage Control (ABC) Board new enforcement authority, and create a licensing and reporting framework intended to remove illegal vape products from store shelves.

Representative Faulkner, who presented the bill, said an estimated 80–85% of vape products on retail shelves in Alabama are illegal because they are not on the state registry. He described three main components: authority for the ABC board to establish a licensing fee for enforcement, a single statewide wholesale tax rate of $0.10 per milliliter, and enforcement tools allowing confiscation of untaxed vape products and penalties aligned to tobacco seller rules.

Public‑health groups and industry gave differing reactions in two‑minute proponent statements. Ashley Lyerly, senior director of advocacy for the American Lung Association, supported licensing and enforcement but said the proposed 10¢/ml rate “will not have a significant public health benefit” and recommended a higher tax and a comprehensive licensing program applying to all tobacco products. “The proposed 10¢ per milliliter tax unfortunately will not have a significant public health benefit to reduce youth initiation,” Lyerly said.

Retailers and wholesalers warned of unintended consequences. Joe Farrell, who owns a chain of vape stores, said a typical 100‑ml bottle would face $10 in tax at the proposed rate — raising a $20 product to $30 — and predicted sales and revenue would decline. Ross Gunnels of the Alabama Wholesale Distributors Association said wholesalers will not sell products not on the registry and urged robust enforcement and a streamlined tax collection system. Testimony also raised a separate statutory issue: a 2021 law that prohibits synthetic nicotine in Alabama, which retailers said prevents registering commonly sold products because much of the market uses synthetic nicotine.

Representative Faulkner said the bill proposes distributing tax revenue 50% to the general fund, 25% to counties and 25% to municipalities based on population. He asked the committee for consideration and indicated further negotiations would follow.

No final committee vote on the bill was recorded in the transcript; the session conducted a public hearing with proponents and invited further work with stakeholders. Committee members asked for written text where appropriate and indicated they would coordinate drafts with staff before a committee vote.