By Timothy S. Donahue
Top Takeaways:
- Tax distinction clarified: HB 377 would formally classify heated tobacco as “other tobacco products,” not cigarettes.
- Lower tax exposure: The change would subject HTPs to Florida’s OTP tax rather than the $1.34-per-pack cigarette tax.
- Debate continues: Supporters cite harm reduction and clarity, while critics warn of tax incentives for nicotine products.
A Florida House panel has advanced legislation that would formally separate heated tobacco products (HTPs) from traditional cigarettes for tax purposes, setting up a lower excise tax category for products.
House Bill 377, sponsored by Rep. Chase Tramont, cleared the House Industries and Professional Activities Subcommittee with bipartisan support. The bill codifies an existing interpretation by the Florida Department of Business and Professional Regulation (DBPR), which has treated heated tobacco products as “other tobacco products” (OTPs) rather than cigarettes under current law.
If enacted, the change would allow HTPs to be taxed at Florida’s OTP rate instead of the cigarette tax, which currently equates to about $1.34 per pack. Florida taxes “other tobacco products” at 25 percent of the wholesale sales price, a structure that generally results in a lower effective tax burden than the per-stick cigarette tax.
The bill defines heated tobacco products as tobacco-containing products used in an electronic device that heats tobacco to generate an inhalable aerosol without combustion, distinguishing them from both cigarettes and e-liquids.
Supporters argue the clarification brings statutory certainty to a category that already exists in the market and aligns Florida’s tax code with product risk differentiation. Florida TaxWatch has supported the approach, citing evidence that non-combustible alternatives may reduce harm for adult smokers who switch completely from cigarettes.
Some lawmakers, however, raised concerns during the committee hearing about whether lower taxes could be viewed as incentivizing the use of nicotine products that still carry health risks, even if they are non-combustible.
The bill now moves to the House Commerce Committee. A companion measure, Senate Bill 754, is advancing separately through the Senate committee process. If both chambers approve the legislation, Florida would join a growing number of states that explicitly distinguish heated tobacco from combustible cigarettes in their tax codes.
