Alaska House passes tobacco age increase, vape tax, cigar lounge exemption

The Alaska House of Representatives passed legislation Tuesday that raises the minimum age to purchase tobacco and vaping products from 19 to 21 and imposes the state's first statewide tax on electronic smoking products. The bill also creates an exemption for premium cigar retail stores.

Senate Bill 24 passed 24-16 after extended floor debate and consideration of multiple amendments. The House also passed a title change resolution, HCR 32, by a vote of 36-4.

Representative Sara Hannan carried the bill on the House floor. She said the legislation addresses two central policies. The first raises the minimum age to purchase tobacco products and electronic smoking products to align Alaska with federal law passed in December 2019. The second establishes a retail tax on electronic smoking products for the first time statewide in Alaska. Hannan said annual proceeds from the tax will continue to go into the Tobacco Use Education and Cessation Fund, which is already used for smoking education and prevention programs. Anchorage adopted a citywide e-cigarette excise tax in 2020, effective March 2021, but no statewide vape tax has existed until now.

Hannan said nicotine and tobacco cause preventable health diseases, including cancer, heart disease, and stroke.

The bill establishes a retail point-of-sale tax on electronic smoking products. Hannan defended the structure as necessary because vaping products vary widely in nicotine content and packaging, unlike traditional tobacco products. An amendment by Representative Jeremy Bynum to replace the retail tax with a 75 percent wholesale excise tax failed 19-21.

Amendment 4, introduced by Representative Kevin McCabe, passed 21-19. The amendment creates an exemption allowing premium cigar retail stores to operate smoking lounges if they meet strict requirements. According to McCabe, qualifying stores must derive at least 60 percent of revenue from cigars and humidor rentals, prohibit cigarettes and cigarette tobacco entirely, maintain a built-in or walk-in humidor, allow cigar smoking only within the business itself, and be freestanding or physically separated so smoke cannot travel between neighboring businesses. The amendment also bars these establishments from operating inside pull-tab facilities or general public retail spaces such as malls.

McCabe said the amendment is brought to you by laundry soap, air freshener, mouthwash, and breath mint industries, as well as wives and girlfriends who would rather their significant others not smoke cigars in the shop, in the garage, on the patio, or in the driveway.

Hannan opposed the cigar lounge exemption. She cited Alaska's 2018 smoke-free workplace law. In 2018, when the Alaska Legislature passed the law, there was a carve-out for private cigar clubs to exist, she said. The issue is employees. Secondhand smoke is always carcinogenic.