Measure to remove cigarette tax from heated tobacco moves in House

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A measure that would differentiate heated tobacco products (HTPs) from traditional cigarettes is on the move in the House, clearing the House Industries and Professional Activities Committee by a 12-2 vote.

The bill (HB 785) from Rep. Chase Tramont would exclude HTPs from the definition of “cigarette” and include HTPs in the definition of “tobacco products,” setting up a taxing structure different from that of traditional cigarettes.

The bill cleared with one person speaking in favor — Parkview Institute President John Elliot — and one speaking against — Florida For All Legislative Director Jackson Oberlink. A handful of groups, including the Florida Retail Federation, waived in support of the measure.

The Parkview Institute is a free-market advocacy nonprofit, while Florida For All is a progressive group that supports, among other things, electing people of color to office.

Elliot touted the measure as an opportunity to use the tax system as an incentive — not a barrier — to alternatives to smoking.

“It would send the correct message to the public that these products are less harmful alternatives,” he said, adding that the bill maintains a “limited government approach” while employing what he sees as the purpose behind taxes, to “tax what you want less of.”

Oberlink, meanwhile, blasted the proposed legislation as a “pay-to-play” handout to Big Tobacco, and lamented that HTPs, much like criticism against vape products, appeal to teens by marketing special flavors, specifically mentioning “tropical menthol.”

While the bill does not specifically block flavored tobacco as part of the heated tobacco definition, the U.S. Food and Drug Administration (FDA) recently authorized Philip Morris International’s IQOS products in flavors mimicking those of existing cigarette flavors. There are products advertised as “tropical menthol” for the IQOS product, but such products have only limited availability in the U.S.

The FDA is reviewing an R.J. Reynolds product called Eclipse, and it is expected to come to market soon. Altria is also taking steps to commercialize HTPs.

While HTPs still contain nicotine and still present possible risks, they are a less harmful alternative to traditional tobacco products, according to various reports on the issue. Dominic Calabro, President and CEO of Florida TaxWatch, recently penned an op-ed in this publication noting the harms of cigarettes — more than 32,000 Floridians die from smoking each year — and pointing to HTPs as a less harmful and less expensive option.

With the cost of health care from smoking-related illness estimated at more than $10 billion annually in Florida alone, Florida TaxWatch is advocating for incentives to move smokers away from cigarettes and, if they can’t or won’t quit, toward less harmful products. The group is supporting a “different tax treatment” for HTPs that would make them more affordable than cigarettes, which are taxed at about $1.33 per pack.

Tramont’s bill heads next to the Commerce Committee. It previously cleared the Ways and Means Committee.

Sen. Nick DiCeglie is carrying the measure (SB 1418) in the upper chamber. It easily cleared its first committee stop, and is awaiting hearings in Finance and Tax and Appropriations committees before hitting the Senate floor.