House amendments restore ban on minors'possession and shift penalties in S.198 tobacco bill

Legislative staff walked the committee through a markup of S.198 on Monday, a bill that would revise Vermont'era tobacco regulation and tax provisions to address new tobacco substitutes and online sales.

Jen Harvey, of the Office of Legislative Council, told members the house'passed version restores a prohibition on possession, purchase or attempted purchase of tobacco products, tobacco substitutes and paraphernalia by minors but removes a civil monetary penalty for juveniles; confiscation of contraband would remain. Harvey said the house replaced the prior fine for using a fake ID with an option offering up to 10 hours of community service or enrollment in a youth tobacco cessation program determined by the Department of Health.

The markup clarifies licensure across agencies and separates tobacco licensing from liquor licensing, making retail tobacco licenses valid for one year from date of issue (reflecting current Department of Liquor and Lottery practice). Harvey said the bill raises the original/renewal retail license fee from $110 to $150 and preserves a $50'$75 endorsement fee for tobacco substitutes. Wholesale licensure language was revised, including a senate-added annual licensing fee and conforming changes to move wholesale licensure oversight toward the Department of Liquor and Lottery.

Harvey also described a new restriction on internet sales: online orders of tobacco products, substitutes and paraphernalia could not be shipped to an individual consumer but may be shipped to a Vermont'licensed wholesale dealer; a Vermont licensed wholesaler could ship directly to a Vermont licensed retail dealer. The change is intended to ensure wholesalers pay excise tax and to curb unlawful online consumer sales, Harvey said.

The house added a provision giving the Attorney General authority to seek civil penalties of up to $5,000 per violation for deceptive tobacco products and substitutes, treat violations under the Consumer Protection Act and recover investigative costs and attorneys'fees. The Department of Liquor and Lottery would also gain clarified authority to suspend or revoke licenses and to impose administrative penalties (Harvey said the markup includes authority to impose up to $7,500 per violation for license holders).

The bill directs the Department of Liquor and Lottery and the Attorney General's Office to report back to committees by Jan. 15, 2027, on enforcement activity and capacity, including the number of online compliance checks in fiscal 2025'26, outcomes of cases referred to the Attorney General and any unmet enforcement needs related to expanded regulation. Harvey said the Attorney General would also lead a study (with DLL and the Department of Taxes) on tax options for tobacco and substitutes, including evaluating taxes based on nicotine concentration or volume, the use of tax stamps and modern alternatives such as QR codes.

Committee members and advocates discussed whether community'service diversion programs are sufficiently available statewide to support the fake'ID option, with staff advising the committee to consult the Judicial Bureau and existing diversion programs for oversight and capacity details. One member flagged a roughly 10'fold increase in a selling'without'license penalty as a concern; no member moved to block the proposal.

There was no formal roll'call concurrence vote in the transcript. The chair asked members to allow a scroll poll on concurrence with the house amendments; the transcript ends after that request and before any poll result was recorded.

The committee recessed S.198 discussion and moved on to the next agenda item. If the committee pursues concurrence, staff said they would follow up with additional details on enforcement capacity and community'service program availability.