Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Taxation topic
No spam. Unsubscribe anytime.
Senate approves tax definition for heated tobacco products after lengthy floor debate
Summary
Senate Bill 680 defines heated tobacco products as cigarettes for tax purposes and applies a tax set at 50% of the regular cigarette tax; the bill drew public-health concerns and debate over whether the legislature should be setting preferential tax rates for a new nicotine product.
The Senate voted to define heated tobacco products as cigarettes for purposes of state excise tax and to set a tax level at 50% of the existing cigarette tax rate.
President Pro Tem Paxton, presenting Senate Bill 680, told members the product has already been approved by the U.S. Food and Drug Administration and is entering the market. He said the bill was intended to give industry and the state certainty about tax treatment: "If we do nothing, this product will be taxed like a stick of bubble gum," Paxton said, and argued the tax policy should be decided by the legislature rather than by administrative action or lawsuit.
Opponents on the floor raised public-health and policy concerns. Senator Jett urged caution about granting a preferential tax rate to a competing nicotine product and said offering a lower tax rate effectively chooses winners and losers in the marketplace. Senator Hicks cited prior civil and criminal findings against some tobacco companies and warned that claims of cessation benefits are not settled science; he urged taxing all nicotine products equally to avoid incentivizing new products.
Questions on the specifics of the tax — including whether the tax is tied to the tobacco content, device size, or other metrics — were raised repeatedly. Pro Tem Paxton responded that the product under discussion contains less than a third of the tobacco in a regular cigarette and that the 50% tax level was proposed to reflect that difference. He also said the attorney general had advised the legislature that defining the product and setting the tax before market entry would not constitute a tax increase requiring a supermajority.
The roll call showed 31 ayes and 4 nays; the president declared the bill passed and later announced it advanced as an emergency measure.
What it means: The Legislature has moved to bring a new tobacco-nicotine product explicitly into the existing cigarette-tax framework while setting a lower excise rate than for combusted cigarettes. The change gives retailers and manufacturers a defined tax treatment for an arriving product but drew sustained public-health debate on whether it creates a fiscal incentive for wider use.
Votes at passage: Senate Bill 680 — passed 31–4; advanced as an emergency measure.
