NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A2119
SPONSOR: Dinowitz (MS) TITLE OF BILL:
An act to amend the tax law and the public health law, in relation to
providing for the taxation of electronic cigarette cartridges
PURPOSE:
This legislation would include electronic cigarette cartridges as a
tobacco product in the tax law, and would subsequently subject them to
the appropriate taxes for such items.
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 amends subdivision 2 and adds subdivisions 22 and 23 to § 470
of the tax law to add to the definition of "tobacco products" an elec-
tronic cigarette or c-cigarette and electronic cigarette cartridge or
e-cigarette cartridge and provides definitions for those terms.
Section 2 adds subdivision 19 to section 1399-aa of the public health
law to add the definition of an electronic cigarette cartridge or e-ci-
garette cartridge.
Section 3 sets the effective date.
JUSTIFICATION:
In recent years we have begun to address the litany of issues that have
arrived with the rise in popularity of the electronic cigarette (e-ci-
garette). Beginning with the ban on sales to minors, they are now banned
from being used indoors in the City of New York, and legislation to do
the same on a statewide level is being pursued. However, the issue of
taxation has yet to be addressed and this legislation will do just that.
Currently the Federal Food and Drug Administration (FDA) has yet to rule
on how to regulate these products but many states and localities are
moving ahead. New York will join Minnesota in classifying the cartridges
that contain the nicotine and/or other chemicals that deliver the addic-
tive drug that are found in cigarettes and other forms of tobacco
products in a vaporized form.
In December of 2010, the U.S. Court of Appeals for:the D.C. Circuit
issued a decision stating that e-cigarettes and other products "made or
derived from tobacco" should be regulated as tobacco products and that
the FDA can regulate them under the Tobacco Control. Act. On April 25,
2011 the FDA announced it would not appeal that ruling, and has since
been working toward forming a strategy to regulate e-cigarettes under
the Tobacco Control Act.
Those in the business of selling e-cigarettes market them as a safe
alternative to traditional forms of smoking, i.e. cigarettes, cigarillos
and many other smoking related ways of inhaling nicotine. The truth is
that to date, the FDA is unaware of what is in the majority of these
devices; those they have tested have been found to contain not only
nicotine but also detectable levels of known carcinogens and toxic chem-
icals. The FDA also found that "quality control processes used to manu-
facture these products are inconsistent or non-existent" Additionally,
while they are often marketed as a smoking cessation tool 'or a safer
alternative, there is growing concern amongst tobacco' control organiza-
tions that there is little noticeable difference in appearance when
using these devices. This could lead to young teens being potentially
lured by the e-cigarettes and ultimately find themselves addicted to
nicotine, which could very well lead to smoking cigarettes.
Adding these products to Section 470 of the tax law will bring these
products in line with other tobacco products; they will be regulated and
taxed in the same fashion as other tobacco products. As the State
continues to fight to lessen the smoking population as a public health
measure, allowing an addictive drug like nicotine to be sold without tax
is simply counter intuitive.
PRIOR LEGISLATIVE HISTORY:
2021-22: A.3514 - Ways and Means / S.3045 Budget and Revenue
2019-20- A.3503 - Ways and Means / S.876 - Investigations and Government
Operations
2017-18- A.1139 - Ways and Means / S.1089 - Investigations and Govern-
ment Operations
2015-16- A.296'- Ways and Means / S.722 - Investigations and Government
Operations
2013-14 - A.8594 - Held for Consideration in Ways and Means / S.6610
Investigations and Government Operations
FISCAL IMPLICATIONS:
The State will receive significant new revenue by classifying these
products as tobacco products; they will subsequently be taxed under
existing law and new regulations promulgated by the Department of Taxa-
tion and Finance as directed under this bill.
EFFECTIVE DATE:
This act shall take effect on the 180th day after it shall have become a
law; provided, however, that the Department of Taxation and Finance is
authorized and directed to promulgate rules and regulations necessary
for the implementation of this act on or before such date.
STATE OF NEW YORK
________________________________________________________________________
2119
2023-2024 Regular Sessions
IN ASSEMBLY
January 23, 2023
___________
Introduced by M. of A. DINOWITZ, PAULIN -- Multi-Sponsored by -- M. of
A. McDONOUGH, THIELE -- read once and referred to the Committee on
Ways and Means
AN ACT to amend the tax law and the public health law, in relation to
providing for the taxation of electronic cigarette cartridges
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision 2 of section 470 of the tax law, as amended by
2 chapter 728 of the laws of 2019, is amended and two new subdivisions 22
3 and 23 are added to read as follows:
4 2. "Tobacco products." Any cigar, including a little cigar, or tobac-
5 co, other than cigarettes, intended for consumption by smoking, chewing,
6 vaporizing or as snuff, and shall include e-cigarette cartridges and
7 electronic cigarette cartridges. "Tobacco products" shall not include
8 research tobacco products.
9 22. "Electronic cigarette" or "e-cigarette." A battery-operated device
10 that contains cartridges filled with a combination of nicotine, flavor
11 and/or chemicals that are turned into vapor which is inhaled by the
12 user.
13 23. "Electronic cigarette cartridge" or "e-cigarette cartridge." A
14 replaceable cartridge that contains nicotine or other chemicals and is
15 intended for use within an electronic cigarette or e-cigarette.
16 § 2. Section 1399-aa of the public health law is amended by adding a
17 new subdivision 19 to read as follows:
18 19. "Electronic cigarette cartridge" or "e-cigarette cartridge" means
19 a replaceable cartridge that contains nicotine or other chemicals and is
20 intended for use within an electronic cigarette or e-cigarette.
21 § 3. This act shall take effect on the one hundred eightieth day after
22 it shall have become a law; provided, however, that the department of
23 taxation and finance is authorized and directed to promulgate rules and
24 regulations necessary for the implementation of this act on or before
25 such date.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD01009-01-3
