Michigan Proposes 32% Tax on Vapes & Nicotine Pouches
Michigan is considering a significant overhaul of its tobacco and nicotine regulations, with both Governor Gretchen Whitmer and state lawmakers proposing new measures to expand the range of taxed products, including e-cigarettes (vapes) and oral nicotine pouches. These initiatives aim to curb youth usage, generate revenue for public health programs, and close existing legal loopholes.
Governor Whitmer has laid out a proposal in her executive budget recommendation to extend the state’s current 32% wholesale tax—which applies to non-cigarette tobacco products like cigars and chewing tobacco—to include non-tobacco nicotine products. This would subject e-cigarettes, vaping pod systems, vape pens, and popular oral nicotine pouches like Zyn to the same tax rate. The Whitmer administration estimates this new “vape tax” would generate $57 million annually, with funds directed towards smoking and cancer prevention, as well as youth health programs. The budget also requests an additional $2.5 million to hire staff for tax administration and enforcement.
Separately, Senator Stephanie Chang has introduced Senate Bill 582, which also seeks to amend the 1993 tobacco products tax act. Her bill would similarly expand the definition of covered products to include alternative nicotine products (like pouches) and authorized vapor products (FDA-approved e-liquids and devices), applying the same 32% wholesale tax to them. Additionally, SB 582 proposes increasing the net worth requirement for tobacco licensees from $25,000 to $50,000 and strengthening penalties for contraband, making it a felony to possess unauthorized vapor products with a wholesale value of $500 or more.
Both proposals reflect a growing concern over the popularity of new nicotine products among youth. A 2024 CDC survey found that 14% of Michigan high schoolers reported recent vape use. While Governor Whitmer’s 2019 attempt to ban flavored vapes was struck down by the courts, these new tax-focused proposals represent a different approach to regulating the market. Any new tax legislation is likely to face hurdles in the state House.
- Read more: Michigan Governor Proposes Vape Tax and Flavor Ban Effective April 1, 2025
- News source: Here’s how a Michigan bill would expand tobacco, vape rules and taxes
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