2025 Excise Tax Law Changes

This section was amended implementing weight-based taxation for snuff and adding alternative nicotine products as a taxable product under Article 2A.

The definition of cigar was renumbered from subsection (1b) to subsection (1c).

The definition of cigarette was renumbered from subsection (1c) to a new subsection: (1d).

Subsection (1b) was amended adding a definition for alternative nicotine products. An alternative nicotine product is a

noncombustible product that contains nicotine, whether natural or synthetic, but does not contain tobacco and is intended for human consumption, whether chewed, absorbed, dissolved, ingested, or by other means. This term does not include a vapor product or any product regulated by the United States Food and Drug Administration under Chapter V of the federal Food, Drug, and Cosmetic Act.

Subsection (10d) was added to define snuff. Snuff is “[a] tobacco product consisting of finely cut, ground, or powdered tobacco that is not intended to be smoked.”

Subsection (11a) amended the definition of tobacco product. As amended, a tobacco product is a “cigarette, a cigar, a vapor product, an alternative nicotine product, or any other product that contains tobacco and is intended for inhalation or oral use.”

(Effective July 1, 2025, and applies to sales or purchases occurring on or after that date; HB 259, s. 42.18.(a), S.L. 2023-134)

This section was amended to update “Internet” to the term “internet.” This conforms with the state’s drafting conventions for the use of this term.

(Effective June 26, 2025; HB 40, s. 29.(3), S.L. 2025-25.)

This section was amended as a part of implementing the new taxation methodology for snuff and the new tax on alternative nicotine products.

This section was amended by clarifying that, for the purposes of this section, “‘tax increase’ includes a new tax or a change to the methodology for calculating a tax that results in additional tax being due.”

(Effective July 1, 2025, and applies to sales or purchases occurring on or after that date; HB 259, s. 42.18.(a), S.L. 2023-134)

This subsection was amended to update “e-mail” to the term “email.” This conforms with the state’s drafting conventions for the use of this term.

(Effective June 26, 2025; HB 40, s. 29.(1), S.L. 2025-25.)

This section was amended changing the taxation methodology for snuff and imposing a new tax on alternative nicotine products. It also made conforming changes to what may be used to determine the value of tobacco products when the taxpayer fails to produce satisfactory documentation to the Secretary.

Subdivision (a)(3) was amended taxing snuff at the rate of forty cents (40¢) per ounce and a proportionate rate on all fractional parts of an ounce. The tax must be computed based on the net weight as listed by the manufacturer on the package in accordance with federal law.

Subdivision (a)(4) was added imposing a tax on alternative nicotine products at the rate of ten cents (10¢) per container containing up to 20 units, and at the rate of one-half cent (1/2¢) per unit for any amount in a container containing over 20 units.

Subdivision (a)(5) was added containing the language previously in subsection (3), which imposes a tax on all other tobacco products at the rate of twelve and eight-tenths percent (12.8%) of the cost price.

Subsection (f) clarifies that if a person liable for the tax imposed by Part 3 of Article 2A cannot produce satisfactory documentation, the Secretary may determine a value based on the cost price, weight, count, or volume of comparable items.

(Effective July 1, 2025, and applies to sales or purchases occurring on or after that date; HB 259, s. 42.18.(b), S.L. 2023-134)

This section was amended as a part of implementing the new taxation methodology for snuff and the new tax on alternative nicotine products.

Subsection (1) was amended limiting the record keeping requirements for remote sellers. As amended, only as to cigars, must a remote seller maintain “a list, updated annually, showing the cost price paid by the remote seller for each stock keeping unit . . .” Previously, this was required for all other tobacco products.

Subsection (3) was amended requiring remote sellers to maintain records documenting “the cost price, weight, or count based on the applicable tax imposed of purchases of all tobacco products sold to consumers in this State.”

(Effective July 1, 2025, and applies to sales or purchases occurring on or after that date; HB 259, s. 42.18.(c), S.L. 2023-134)