Tobacco Tax Equity Act of 2023: Senators Ron Wyden (D-OR) and Dick Durbin (D-IL), along with U.S. Representative Raja Krishnamoorthi (D-IL-08), introduced the bicameral “Tobacco Tax Equity Act of 2023” (S.2429/H.R.5715). In their news release, the bill would close tax code loopholes for tobacco products by establishing a new federal tax on e-cigarettes, updating the federal cigarette tax rate to restore its public health impact, and harmonizing the tax rate across tobacco products.
The tobacco tax provisions include substantial increases and an annual adjustment in the below proposed rates based on inflation:
- Double the tax on cigarettes from $1.01 to $2.02 per pack.
- Implement a new e-cigarette tax that would equalize to the tax on cigarettes (methodology based per 1,810 milligrams of nicotine)
- Increase the tax on moist snuff from 11-cents per 1.2 oz. tin to $2.02 per can
- Establish a new tax on smokeless tobacco sold in discrete single-use units (e.g. modern oral products) to $100.66 per thousand units
- Double the tax on small cigars
- Change to a new weight-based tax methodology (to $49.56/lb) on large cigars resulting in a substantial tax increase
- Double the tax on RYO (from $24.78/lb to $49.56/lb)
- Equalize the tax on chewing tobacco and pipe tobacco to tax these products like cigarettes
These bills are similar to the legislation introduced last week as part of the “Care for Moms Act” and the “Tobacco Tax Equity Act” considered during the last Congress, which failed despite Democratic majorities in the House and Senate.