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Committee adopts amendment to tax nicotine-containing vapor products; HB 525 passes unanimously in committee
Summary
The committee amended HB 525 to include nicotine-containing vapor products in the tobacco-product definition, applying an existing 50% wholesale tax and directing 32% of revenue to DPHHS for nicotine-prevention; the amended bill passed committee 21-0.
House Bill 525 was moved for passage and Representative Close offered an amendment to add nicotine-containing vapor products to the definition of "tobacco product," thereby subjecting them to the existing 50% wholesale tax in state code. Committee staff Megan explained the amendment does not itself create the tax language in the bill but revises definitions so the tax in statute (cited during the hearing as 16-11-111) applies; she clarified the tax is assessed on wholesale price, not retail.
Megan summarized the revenue disposition in the amendment: 68% to the general fund and 32% to the Department of Public Health and Human Services (DPHHS) for nicotine-use prevention. Representative Close said the amendment aims to tax similar products the same way and channel revenue toward prevention; Representative Elverum and Representative Weber expressed support, noting fairness among products and program funding benefits.
The committee called the question, conducted a roll call on the amendment and accepted a corrected tally that the amendment passed 18 to 3. Members then voted on HB 525 as amended; the committee reported a unanimous recorded vote (21 to 0) in favor of passage in committee.
The outcome sends HB 525, as amended, out of House Taxation Committee with explicit allocation language for tax revenue and a code citation provided on the record for how the 50% wholesale tax is to be applied.
