According to tuscaloosa Thread’s report on September 24th, the Tuscaloosa City Council in Alabama, USA, may impose a new tax on e-cigarette products in the near future. The state legislature has passed a statewide e-cigarette tax bill, which is scheduled to take effect in October.
The core of this discussion is Alabama’s Act 2025-377. The bill, which concerns the taxation and regulation of e-cigarettes, was passed by the state legislature in May 2025 and signed into law by Governor Kay Ivey.
Some provisions of the bill stipulate: “A new state consumption tax of $0.10 per milliliter will be levied on all consumable e-cigarette products sold in wholesale form or imported into the state for use, consumption or retail.”
This month, municipal governments across Alabama are stepping up efforts to pass local e-cigarette tax bills. The city of Gulfshore completed the legislation on Monday, following Decatur, Dorson, Orange Beach and other cities taking the lead.
The reason why various regions are eager to legislate is due to the provisions of Bill 2025-377: Any county or city that wants to impose a local e-cigarette tax must complete the legislation by October 1, 2025. After this date, Tuscaloosa and other cities will no longer be able to impose local e-cigarette taxes.
At that time, cities that have not established local e-cigarette taxes will receive funds allocated in proportion to their population from the state’s e-cigarette tax revenue – this fund will be shared among all cities.
This distribution method is similar to the “Simplified Seller Use Tax” distribution mechanism, which distributes all Internet sales tax revenue in Alabama in proportion to the population. The mayor of Tuscaloosa, Walter, had publicly opposed this distribution system.
Facing the set effective date of the state-level e-cigarette tax and the limited window period for local tax legislation, the Tuscaloosa City Council may rush to pass the city’s e-cigarette tax bill when it meets next week.
A new tax proposal resolution suggests setting the tax rate for nicotine e-liquid in e-cigarette products at 10 cents per milliliter, the same as the state-level rate that will take effect in 2026. For areas located outside the boundaries of Tuscaloosa but within the police jurisdiction of the city, the proposal suggests a tax of 5 cents per milliliter.
This move will ensure that the city of Tuscaloosa fully retains the tax revenue from e-cigarettes and related products within its jurisdiction, rather than obtaining a potentially smaller annual share from the state-wide unified allocation of funds.
The resolution also clarifies the declaration rules for new tax revenues and the penalty measures for failure to declare as required.
This matter will be reviewed by the city council’s Finance Committee next Tuesday. The committee may recommend that the council vote on it that night in order to complete the legislation before the October 1st deadline. Before the meeting was held, a spokesperson for the city said that they would not comment further on the resolution for the time being.