According to Delaware Online, the latest round of tax rate hikes for cigarettes, e-cigarettes and nicotine pouches in the US state of Delaware has passed the first hurdle of the House committee review.
The bill proposes to increase the taxes on cigarettes and wet snuff.
This bill was supported by the Speaker of the House, Melissa Minor-Brown, and it proposes to increase the tax on cigarettes from $2.10 per pack to $3.60, and to raise the tax on wet snuff from $0.92 per ounce to $1.23.
The current average price of a pack of cigarettes in Delaware is approximately $9.61. If the tax increase is approved, the price could exceed $11.
The definition of tobacco products will be expanded to include nicotine pouches and e-cigarette products.
The bill also intends to broaden the definition of “tobacco products”, including those “originating from, produced by, or containing tobacco or nicotine for personal consumption”.
This will include pipe tobacco, nicotine pouches and electronic cigarette products.
The bill excludes cannabis products and FDA-approved drugs or therapeutic devices.
According to the bill, products containing marijuana will be excluded, regardless of whether they also contain nicotine.
Products that have been classified by the US Food and Drug Administration as “drugs or therapeutic devices” are also not within the scope of this act.
The tax rates for electronic cigarettes and other tobacco products were revised downward on April 17th by a certain amount.
The bill initially proposed raising the tax on e-cigarettes from 5 cents per milliliter to 25 cents, while the tax on other tobacco products would increase from 30% of the wholesale price to 45%.
However, after the bill was replaced and revised on April 17th, the tax rate for e-cigarettes was adjusted to 10 cents per milliliter, while the tax rate for other tobacco products was set at 40% of the wholesale price.
The tax rate for premium cigars remains unchanged at 30%.
The new tax rate is scheduled to come into effect on September 1st.
The report indicates that if the above-mentioned tax rate adjustment is approved, it will come into effect on September 1st.
The bill will also update the tobacco licensing system in Delaware, and several fees that are currently paid to the state treasury will roughly double.
Among them, the wholesale and tax-assessment agency fees will increase from $200 to $400, the retail licensing fees will rise from $50 to $100, the vending machine licensing fees will go up from $15 to $30, and the reapplication fees for damaged or lost licenses will increase from $10 to $20.
The adjustment of licensing fees is planned to be implemented on January 1, 2027.
If the bill is passed, the above-mentioned adjustment to the licensing fees will come into effect on January 1, 2027.