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Senate Approves Third Substitute of SB 37, Raising Vaping Tax Treatment and Adding $3 Million for Health Programs
Summary
The Senate passed Third Substitute Senate Bill 37, which retains a 56% tax treatment for vaping products after negotiations, removes a $1 million appropriation, adds $3 million to the Department of Health and requires annual grantee reporting; the bill passed 21‑5 with three absent.
The Utah Senate on March 2 passed Third Substitute Senate Bill 37, a package of amendments to electronic cigarette and other nicotine‑product law that adjusts appropriations, reporting and tax treatment for vaping products.
Sponsor Senator Christiansen explained the substitute removes a $1,000,000 appropriation originally included in an earlier version, adds a $3,000,000 appropriation to the Department of Health for related programs and inserts reporting requirements for grantees. “It removes the appropriation of a million dollars … it adds 3,000,000 appropriation to Department of Health,” the sponsor said during floor debate.
Senators discussed the tax treatment of vaping products. Senator Henderson asked whether the substitute brings vape taxes “up to 56% to bring it in line with other cigarette and tobacco products.” The sponsor and other senators said the final negotiated rate is 56 percent; Christiansen noted his original ask had been higher: “My original ask was 86%,” he said, and caucus negotiation settled at 56 percent. A senator also noted there is currently no federal tax on vaping products.
The bill requires annual reporting on taxes collected and expenditures by each grantee and adds coordinating language to work with related measures. Following debate, the Senate held a roll-call vote; the president announced the bill passed with 21 yea votes, 5 nay votes and 3 absent. The bill will be transmitted to the House for further consideration.
The Senate record shows members raised questions about the fiscal note earlier in the day; the sponsor said the substitute was intended to reduce any net fiscal impact in the general fund by using restricted‑fund accounting for the added and removed appropriations.
