Increases the tax imposed on the sale of certain tobacco products from 75% to 129% and increases the tax imposed on the retail sale of vapor products from 20% to 48%; makes conforming changes.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A274
SPONSOR: Rosenthal TITLE OF BILL:
An act to amend the tax law, in relation to increasing the tax imposed
on the sale of tobacco products and the retail sale of vapor products
PURPOSE:
This legislation will increase the tax imposed on the sale of tobacco
and vapor products.
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 amends subdivision 471 -b of the tax law to increase the tax
on tobacco products from 75% of wholesale price to 129% of wholesale
price and changing calculation of the tax on snuff.
Section 2 amends Section 1181 of the tax law to increase the tax on
vapor products from 20% of receipts from the retail sale to 48% of
receipts from the retail sale of such products.
Section 3 of the bill establishes the effective date.
JUSTIFICATION:
Studies consistently show that regularly increasing taxes on tobacco
products is one of the most effective ways to reduce new tobacco initi-
ation and encourage cessation, particularly among youth and young adults
who are especially price conscious. After the federal tobacco tax was
increased in 2009, researchers from the University of Illinois at Chica-
go found that a nationally representative survey of 8th, 10th, and 12th
grade students showed that students who reported using smokeless tobacco
products dropped between 16% and 24%. The researchers estimated that
there would have been approximately 135,000 - 203,000 more smokeless
tobacco users among middle school and high school students had the
federal tax not been increased.
However, New York has not increased its tax rates on tobacco products
since 2010. To discourage tobacco usage, reduce health care costs, and
improve health outcomes for New Yorkers, this bill would increase the
tax on tobacco products from 75% of wholesale price to 129% of wholesale
price, and increase the tax on receipts from the retail sale of vapor
products from 20% to 48%. It would also move snuff from being taxed by
weight to being taxed by a percentage of its wholesale price, as other
tobacco products are, to keep up with inflation.
LEGISLATIVE HISTORY:
2023-24: A.86 - Referred to Ways and Means; S.2425 - Referred to Budget
and Revenue
2021-22: A.678 - Referred to Ways and Means; S.2753 - Referred to Budget
and Revenue
2019-20: A.11123 - Referred to Ways and Means
FISCAL IMPLICATIONS:
Undetermined.
EFFECTIVE DATE:
This act shall take effect immediately.
