Nicotine products such as vapes and oral pouches would be subject to the same 32% wholesale tax as most tobacco products under a new proposal from Gov. Gretchen Whitmer, aimed at “curbing usage and protecting public health.”
Expanding the tax to non-tobacco nicotine products would “close a loophole” in state law, Kyle Guerrant, the deputy state budget director, told lawmakers Wednesday during a presentation on the governor’s new budget proposal.
While Michigan currently taxes cigarettes at a flat $2 per pack, non-cigarette tobacco products are taxed at 32% at the wholesale level. However, nicotine products without tobacco have so far remained untaxed.
The Whitmer administration projects that the new “vape tax” will generate $57 million annually, with the revenue directed toward “smoking and cancer prevention, youth mental and physical health, and access to healthcare,” Kyle Guerrant stated.
Whitmer also requested an additional $2.5 million in the upcoming year’s state budget to hire new employees to administer and enforce the tax, according to media.
“The proliferation of vaping products raises profound public health concerns, particularly for young adults and adolescent youth for whom the rise in the use of these types of products is most notable,” state budget officials wrote in documents provided to the Legislature.
