House Finance advances tobacco age increase, e-cigarette tax on 7-4 vote

The Alaska House Finance Committee voted 7-4 to advance a bill raising the minimum age to buy, sell, use, and possess tobacco and nicotine products to 21 and imposing new retail taxes on e-cigarettes and vapor products.

The committee approved Senate Bill 24 after rejecting multiple amendments. Those included attempts to exempt active-duty military members ages 19 to 20 from the age increase and to apply the tax at the wholesale level rather than retail.

The bill aligns Alaska law with federal tobacco age requirements and creates a new retail tax system for e-cigarettes rather than using the existing wholesale tax structure applied to traditional tobacco products. The measure pushes the effective date for the age increase to July 2026 and the tax implementation to July 2027.

Sponsor Gary Stevens said the bill aims to push back on a multi-billion dollar industry targeting young people. The bill raises the legal age to buy, sell, use, and possess cigarettes, nicotine products, and e-cigarettes to age 21. Stevens said Alaska has deferred this issue for too long. The time is now to face the industry and help protect young Alaskans who are being targeted for potentially a lifetime of addiction.

The legislation follows the failure of SB 89, which died last session when the Senate did not take it up before adjournment. Several Alaska local governments, including Anchorage, Juneau, and the Matanuska-Susitna Borough, already impose their own excise taxes on vapor products, ranging from 45 percent to 55 percent of the wholesale price. The new state retail tax would layer on top of those existing local levies.

Opponents raised concerns about creating new opportunities for police interactions with young adults. Representative Bynum said the bill provides an opportunity in law for there to be police interactions with younger people. Bynum said the bill addresses young adults, not children, and could lead to increased interactions and pretextual stops.

Bynum added that courts receive many of these cases through policing activities in schools. When he talks to the courts, they tell him that the cases they receive on this, or a large portion of them, come through engagement of policing activities in schools, Bynum said. Schools already prohibit smoking.

An amendment to shift the tax from retail to wholesale failed 5-6. Representative Bynum, who sponsored that amendment, said he attempted to apply the tax as a wholesale tax as opposed to a retail tax. The reason for doing that was to align the tax with what the state already does in current statute and not create a new taxing system.

Bynum argued the retail approach creates a new taxing system and places additional burdens on Alaska businesses. He said he does not know why the state would put additional burden on Alaska businesses by changing the system. Creating a retail tax moves the state toward a statewide sales tax, Bynum said.

A motion to rescind action on an earlier amendment exempting active-duty military members from penalties also failed 5-6.

Before final passage, a motion to rescind action on Amendment 4, which addressed synthetic nicotine products, failed 2-9.

The committee adopted Amendment 14 on a 6-5 vote requiring labels on vaping products to display nicotine concentration in milligrams per milliliter and the total amount. Supporters said the labeling would help consumers understand product strength. Opponents said the requirement would advantage manufactured products over those mixed at retail stores.

The committee also adopted Amendment 15 without objection, a technical fix requested by the sponsor that moved language on retail sales of vaping products to the correct section of the bill.

Supporters said the bill addresses youth addiction to nicotine products and closes a gap in Alaska law that does not tax electronic and synthetic nicotine products the same way as traditional tobacco.

One member said the measure is long overdue. It is wrong that the state has a system where it taxes cigarettes and not e-cigarettes, the member said.

Another member said taxes work as a deterrent for the most price-sensitive consumers, who are often the youngest users.

Opponents said the bill punishes adults for making legal choices. One member said the bill needs more work and that the overall goal should be aligning with federal law without creating additional violations.

One member said adults 18 and older should be able to smoke cigarettes if they choose.

Another member said the bill should not punish soldiers in the active military by fining them for smoking. If you can go to war, you should be able to smoke, the member said.

The bill moved out of committee as amended with individual recommendations and attached fiscal notes. The House Finance Committee authorized legislative legal to make any technical and conforming changes necessary. The bill now moves to the House floor.