Members of Congress Propose Massive Tobacco Tax Increase

Troutman Pepper

Troutman Pepper

A new bill, the “Tobacco Tax Equity Act of 2023” (S.2929 and H.R.5715) has been introduced in the U.S. Senate and House of Representatives.  The bill would:

  • double the federal tobacco products excise tax on cigarettes, small cigars and roll-your-own tobacco,
  • increase the pipe tobacco tax rate to the same rate as roll-your-own tobacco (a 2000% increase),
  • increase the tax on moist snuff by 2000%,
  • increase the tax on large cigars under a new weight-based methodology,
  • establish a new tax on smokeless tobacco sold in “discrete single-use units” (such as modern oral nicotine) at $100.66 per thousand units, and
  • establish a new tax on electronic nicotine delivery systems, at a rate equivalent to the tax imposed on cigarettes.

All of these taxes would increase annually with inflation.

Similar legislation has been introduced in previous sessions of Congress, without success.

We will continue to monitor this bill for further developments.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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