Heated tobacco tax proposal draws sharp opposition from health groups, industry argues harm-reduction case

House Bill 357, sponsored by Representative Hollis, would define "heated tobacco products" and impose an excise tax set at 50 percent of the cigarette tax rate. The Ways and Means General Fund Committee held a public hearing with both opponents and proponents testifying and did not take a final vote at this session; the committee scheduled a vote for March 19.

Representative Hollis said the bill creates a new category for products that heat but do not combust tobacco and that the FDA has determined certain heated tobacco products to be "appropriate for the protection of the public health." She described the proposal as risk-based taxation that incentivizes adult smokers to switch to less-harmful alternatives. In describing testing she said the product produced "smoke" odor in a trial on her husband and described personal adverse reaction when she tried it.

The American Cancer Society Cancer Action Network (ACS CAN) testified in opposition. Jane Adams, government relations director for ACS CAN in Alabama, said the bill would create an unfair tax structure favoring the tobacco industry and risk encouraging youth initiation. Adams said heated tobacco products "are dangerous and can cause cancer" and argued there is "no independent evidence proving these products are safer than cigarettes." She noted the bill’s proposed tax (transcript cites $0.017 per single-use consumable unit in committee discussion) and said that lower pricing disproportionately affects price-sensitive youth.

The American Lung Association’s Ashley Lyerly opposed the bill as well, arguing the product line has been marketed in ways that could entice young people and that flavored heat sticks are available internationally; she urged taxing heated tobacco at parity with cigarettes or higher. Lyerly supplied price comparisons: she said a pack of heat sticks costs about $5.75 at retail and that under the proposed tax the retail price would be about $6.09; by contrast she cited a Marlboro pack purchased for $9.65.

Industry witnesses testified in favor. Jake Jacobs for Philip Morris International argued the bill embeds harm reduction in tax policy and pointed to FDA premarket and modified-risk authorizations for certain products, saying regulatory controls and age restrictions (Alabama’s T21 law, section 28-11) would apply. Dr. Brian Ekerla (identified in testimony as regulatory science director at Swedish Match North America and affiliated with Philip Morris International by association in the hearing) said the FDA review indicates that "combustible cigarette smokers who switch completely to IQOS... will have reduced toxic exposure," and argued a tax differential creates an incentive for adult smokers to transition away from combusted cigarettes.

Committee members pressed technical and public-health questions: whether heat sticks can be combusted and smoked without the device (opponents said some heat sticks can be misused; industry witnesses said the devices are designed to heat, not burn), whether flavored heat sticks will be marketed, and whether the bill would affect Master Settlement Agreement funding. Chairman Reynolds noted Department of Revenue counsel provided an opinion that the bill "will not negatively impact the MSA funding Alabama receives" because heated tobacco products are treated as a subclass of cigarettes and remain taxable.

The committee held the public hearing and scheduled a formal committee vote for March 19; no final statutory change occurred at this meeting.

Ending: The bill remains pending; committee members requested additional materials (tax revenue modeling, MSA impacts, flavor and youth-use monitoring) before the scheduled vote.