Other Tobacco Products Tax.
Taxes are imposed on the sale, handling, or distribution of all tobacco products at the following rates:
The other tobacco products (OTP) tax is deposited into the State General Fund. The OTP tax is in addition to retail sales and use, business and occupation, and litter taxes that may apply.
The definition of "tobacco products" is made up of a list of forms of tobacco that are prepared for human consumption, and specifically excludes cigarettes.
The definition of "tobacco products" is expanded to include products that contain nicotine, whether derived from tobacco or created synthetically. The definition of "moist snuff" is expanded to include similar products containing nicotine. Such products are thus subject to the OTP tax.
(In support) Tax rates directly impact youth use of products that are harmful for them. Synthetic nicotine products that are not taxed at the same rate are sometimes used as cessation products, but not always. Synthetic nicotine products are highly concentrated and can be used more frequently without the user being noticed; addiction is increasing. Increasing taxes is the best way to reduce tobacco use. It is important to stop ZYNs from being cheaper and therefore easier to use for everyone but especially youth. Nicotine itself has numerous health risks and comes in variety of youth enticing flavors. Public health experts suggest nicotine replacement therapies for treatment. A number of devices are approved by the United States Food and Drug Administration (FDA) for cessation, but ZYNs are not one of them. This fixes a loophole created by innovation in new products. Products are targeted at youth, and tobacco licenses are selling to youth often. Including these products in the existing tax code will increase price and decrease use. Synthetic tobacco produces the same negative impacts but is not taxed at the same level as regular tobacco products.
(Opposed) Combustible cigs and moist snuff are more harmful than nicotine pouches. Pouches help people stop using cigarettes with their availability. Taxing the less harmful products more will cause them to switch back to cigarettes. The safest alternative to cigarettes are these nicotine pouches, and people who protect our community are able to quit smoking. Many people who smoke multiple packs a day are able to avoid that by use of ZYNs and other healthier alternatives. Nicotine does not give you cancer it is the combustible part of cigarettes that does. Nicotine patches came from Sweden and they have one of the lowest cancer rates in the world. This bill will encourage cross border shopping. Youth usage is relatively low for nicotine pouches. The FDA recently authorized the marketing of nicotine pouches as products that meet health standards and that they could be a benefit for cessation products for adults. The fiscal note does not necessarily reflect the increase in smoking this would result in. No other state in our area taxes nicotine pouches but California, at a lower rate. This will turn people to black markets. The approach should be more fair if you want to tax these pouches. Now is not the time to increase taxes that risk reducing revenue. Sales tax revenues from tobacco products are already on the decline, further tax increases will accelerate this trend, driving sales across state lines and decreasing revenues.
(In support) Representative Monica Jurado Stonier, prime sponsor; Audrey Miller Garcia, American Cancer Society Cancer Action Network; Megan Moore, Washington State Public Health Association; and Scott Waller, WASAVP - Washington Association for Substance misuse and Violence Prevention.
The Appropriations Committee recommended adding a null and void clause, making the bill null and void unless funded in the budget.
(In support) Increasing tobacco excise taxes is the best way to reduce tobacco use. All nicotine products should be taxed at a parallel rate to encourage consumers to quit and not to switch to a different cheaper nicotine product. Public health experts emphasize the importance of evidence-based smoking cessation methods. Products, such as ZYN pouches, have not been approved by the United State Food and Drug Administration (FDA) to help people quit.
When taxes increase it leads to more revenue generated, prevention of new consumers, and assists in people quitting. Historically in Washington, an increase in the tobacco tax led to a decrease in youth smoking rates. The price increase that comes from applying existing tobacco tax rates to synthetic products will dissuade thousands from initiating use.
(Opposed) Now is not the time to raise taxes in a way that risks reducing revenue. This bill would impact border communities and small businesses, since these products are not taxed as high in neighboring states. Washington is the third highest state for smuggled cigarettes and tobacco products. Adding a high tax to already highly taxed items would reduce revenue and entice consumers across state lines.
The FDA recently authorized the marketing of nicotine pouches as products that meet health standards, and that they could be a benefit for cessation products for adults. This bill promotes an unfair regressive tax, previously referred to as sin taxes. The tax rate on nicotine pouches should not mirror that of far more harmful products like moist snuff and cigarettes. Nicotine products are not taxed in most states, and if they are taxed, it is at a lower rate.
Youth usage stays flat while adult usage continues to increase for nicotine products, and an increase in the tax amount could move consumers back to more harmful tobacco products. These nicotine pouches are made for adults to quit using tobacco products that are proven to cause cancer. The economic health impacts to communities include a decrease in hospitalizations and an increase in ability to address tobacco related health concerns.
(Other) New tobacco products must go through the premarket tobacco application process and must reach an appropriate standard for the protection of public health. This means the product must show that it helps adults quit smoking and does not entice nonusers to begin. The FDA has issued marketing orders for products that are less harmful than traditional tobacco products, of which ZYN pouches are included. According to the Center for Disease Control and Prevention, in 2024 only 1.8 percent of youth were using oral nicotine.
(In support) Audrey Miller Garcia; and Scott Waller, WASAVP - Washington Association for Substance misuse and Violence Prevention.