Michigan Proposes New Tax on Vapes and Nicotine Pouches

Michigan Governor Gretchen Whitmer has proposed a new 32% wholesale tax on nicotine products, including e-cigarettes and oral nicotine pouches. The tax would align these products with existing levies on most tobacco items, closing what state officials call a “loophole” in current regulations. The move aims to reduce nicotine consumption, particularly among youth, while generating $57 million annually for public health initiatives.

Tax Revenue to Fund Health Programs

Kyle Guerrant, Michigan’s Deputy State Budget Director, outlined the plan during a legislative presentation. He emphasized that the revenue would support smoking and cancer prevention, youth mental health services, and improved healthcare access. “This tax ensures non-tobacco nicotine products are treated equally under the law,” Guerrant stated.

Anti-tobacco advocates have long supported higher taxes on nicotine products, citing studies that link increased costs to reduced usage. Lower consumption rates, they argue, lead to fewer public health issues, such as cancer and respiratory diseases.

Enforcement and Youth Concerns

The proposal also includes $2.5 million to hire additional staff for tax administration and enforcement. State budget officials highlighted the growing public health risks tied to vaping, particularly among young people. “The rise in vaping among adolescents and young adults is alarming,” they noted in legislative documents.

Recent data from the Centers for Disease Control and Prevention (CDC) underscores the issue:

6% of youths use e-cigarettes.
Nearly 2% use nicotine pouches.
14% of Michigan high schoolers reported vaping in the past month.

Regional Context and Past Efforts

Michigan joins 32 other states that tax vaping products, including neighboring Great Lakes states like Indiana, Illinois, Ohio, Wisconsin, and Minnesota. Minnesota imposes a 95% tax on such products, the highest in the region.

This isn’t Whitmer’s first attempt to regulate nicotine products. In 2019, she sought to ban flavored vapes, citing their appeal to minors. However, a state court overturned the emergency rules, keeping flavored e-cigarettes legal in Michigan. Similarly, the Biden administration’s push to ban menthol cigarettes faced significant opposition and remains unresolved.

Also Read:
Vaping Taxes by State in the United States 2024

Rising Popularity of Nicotine Pouches

Nicotine pouches, such as Zyn, have surged in popularity. Philip Morris International, Zyn’s manufacturer, reported a 62% sales increase between 2022 and 2023. While these products avoid combustion, they carry health risks similar to other oral tobacco items.

Political and Industry Challenges

The proposed tax faces an uphill battle in the Michigan House, where Republicans hold a narrow majority. Many GOP lawmakers have pledged to oppose new taxes. Additionally, the tobacco industry wields significant influence in Lansing. In the first half of 2024 alone, Altria Group donated nearly $50,000 to both Republican and Democratic campaigns.

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Matthew Ma

Marketing at Ecigator

With over a decade of experience in the e-cigarette industry, Matthew Ma is a seasoned expert in both the manufacturing and usage aspects of vaping products. His extensive background has provided him with a deep understanding of the intricacies and evolving dynamics of e-cigarettes.