Committee declines to advance proposal to tax e‑cigarettes and vapes at OTP rate

Senate Bill 347, a bill to tax electronic cigarette and vape products at the same rate applied to other tobacco products, was presented to the Senate Revenue & Tax Committee and was not advanced after debate and fiscal review.

Senator Bond (presenting) said the measure would apply an excise tax roughly equivalent to the existing "other tobacco products" rate (68%) and would direct revenue toward the National Cancer Institute (NCI) and UAMS in some versions. He cited federal youth‑use survey data and argued taxation would create a price disincentive for youth use. The sponsor also noted drafting choices: applying the existing OTP rate was administratively simpler than reclassifying the devices as cigarettes.

Paul Gehring of DFA provided fiscal information and the committee discussed the revenue estimates. Members asked about tying the tax to cigarettes versus OTPs, likely revenue generation (DFA estimated multimillion‑dollar effects depending on the chosen rate), and whether taxing vapes offsets health costs — Gehring acknowledged excise receipts do not cover health expenditures fully. The committee took a voice vote and the motion to pass did not succeed according to the transcript.

No roll‑call or detailed tally was recorded in the hearing transcript. Supporters argued the tax would discourage youth use and raise targeted revenue; opponents and some members expressed concerns about appropriate tax structure and net fiscal effects.