By Timothy S. Donahue
Top Takeaways:
- Tax proposal moves forward: A budget approved by New York matches the Governor’s proposal for a 75% wholesale tax on nicotine pouches.
- Debate intensifies: Public health groups support the move to deter youth use, while others warn it could stop smokers from switching.
- Growing market targeted: The proposal would apply New York’s existing tobacco tax rate to nicotine pouches like ZYN and FRE.
New York lawmakers are moving forward with plans to introduce a hefty new tax on nicotine pouches, sparking a policy debate over how the state should regulate one of the fastest-growing alternatives to combustible cigarettes.
Spending proposals approved this week by Democrats in the state Legislature reflect Gov. Kathy Hochul’s executive budget plan to impose a 75% wholesale tax on nicotine pouches. The measure would place the tobacco-free products under the same tax structure currently applied to traditional tobacco products.
The proposal comes as New York officials look for new revenue sources while cigarette tax income continues to decline. State officials also emphasize the ongoing public health costs related to smoking-related diseases. Supporters of the tax argue the measure could help prevent youth smoking.
The American Lung Association has backed the proposal, citing state data showing nicotine pouch use among New York high school students more than doubled between 2022 and 2025. “We don’t need to wait until we have another generation of addicted kids,” said Mike Seilback, assistant vice president at the American Lung Association. “We can take measures now to prevent that from happening.”
Federal data show nicotine pouch use among youth remains relatively low but detectable. According to the latest National Youth Tobacco Survey from the U.S. Food and Drug Administration, about 1.6% of middle and high school students reported monthly nicotine pouch use last year, down slightly from 1.8% the year before.
Still, the proposal has sparked debate among some lawmakers who question whether taxing smoke-free nicotine products at the same level as cigarettes could undermine harm-reduction goals. State Sen. Nathalia Fernandez, who chairs the Senate Committee on Alcoholism and Substance Use Disorders, said she supports the tax in principle but believes the policy needs further review.
“Is it smart to tax nicotine pouches higher than cigarettes, which is combustion fire in your lungs?” Fernandez said. “If we are making the safer product more expensive, is that actually helping the public?”
Fernandez stated that nicotine remains addictive regardless of how it is consumed but mentioned that lawmakers should continue scrutinizing the issue as the budget process advances. Industry groups have argued that high taxes on nicotine pouches could discourage adult smokers from switching to potentially less harmful options.
Public health advocates, however, say those claims remain unproven. Seilback pointed out that Philip Morris has not yet sought authorization for ZYN as a smoking cessation product through the FDA’s more rigorous drug review process. The proposal is still under negotiation as lawmakers continue working on New York’s final state budget.
In January, the U.S. FDA authorized the marketing of 20 ZYN nicotine pouch products through the premarket tobacco product application (PMTA) pathway following an extensive scientific review.
“To receive marketing authorizations, the FDA must have sufficient evidence that the new products offer greater benefits to population health than risks,” said Matthew Farrelly, director of the Office of Science in the FDA’s Center for Tobacco Products, of the ZYN authorization at the time. “In this case, the data show that these nicotine pouch products meet that bar by benefiting adults who use cigarettes and/or smokeless tobacco products and completely switch to these products.”
