Increasing the tax on cigarettes and vapor products

This bill increases the tax on cigarettes and vapor products. DIVISION I —— CIGARETTE AND VAPOR PRODUCT TAXATION.3 cents per cigarette.86. The bill also raises the tax on loose tobacco products inserted into a vending machine from which assembled cigarettes are dispensed.43 cents.43(1)(b) for a combined rate of 50 percent. The bill applies this combined 50 percent wholesale tax rate to the wholesale sales price on vapor products. Vapor products remain subject to sales and use taxes. By increasing the cigarette tax in the bill, the inventory tax is also assessed on cigarettes remaining in inventories taxed under the previous tax rate that is equal to the difference between the previous tax rate and the new tax rate. The bill also imposes the inventory tax on vapor products remaining in inventories that have not been taxed under the new tax that is equal to the difference between the previous tax rate and the new tax rate. DIVISION II —— CONFORMING CHANGES. The bill makes numerous conforming changes including inserting references to alternative nicotine products in some instances where vapor product references are inserted. Alternative nicotine products are not subject to additional taxation in the bill.