By Timothy S. Donahue
Top Takeaways:
- Tax dispute: Global Hookah Distributors is asking Florida’s high court to review whether hookah tobacco is taxable under the state’s OTP tax.
- Split ruling: A divided appeals court found that hookah products qualify as “loose tobacco suitable for smoking.”
- Industry stakes: The case could affect how states interpret older tobacco tax statutes in light of newer or distinct tobacco-use formats.
Florida’s hookah tax fight is not over yet. Global Hookah Distributors has asked the Florida Supreme Court to review a divided appeals court decision holding that its hookah tobacco products are subject to the state’s tax on other tobacco products (OTP).
The company argues that the First District Court of Appeal misapplied Florida precedent that requires ambiguous tax statutes to be interpreted in favor of taxpayers.
The dispute centers on whether hookah tobacco falls within Florida’s statutory definition of taxable tobacco products as “loose tobacco suitable for smoking.” Global argues that its product is not directly burned like traditional pipe tobacco and should not be taxed under language adopted decades before modern hookah products became common.
The First District disagreed in a February 2025 decision, affirming the state’s denial of Global’s requested refund of OTP taxes and surcharges. “As a means to yield vaporized nicotine for inhaling, there is no meaningful difference between combusting cut-up tobacco leaves… and subjecting those cut-up leaves to high heat by burning something else,” Judge Adam Tanenbaum wrote for the majority.
The court said that hookah tobacco, when used as intended, delivers vaporized nicotine to the bloodstream, typically through the lungs and often with combustion byproducts. “More importantly, the ordinary person would understand both approaches to be ‘smoking,’” the majority wrote.
The case has a long procedural history. Global, a North Carolina-based distributor, previously challenged Florida’s authority to impose OTP taxes on an out-of-state company without a physical presence in the state. In 2021, the First District rejected that Commerce Clause argument, holding that the tax was an excise tax or surcharge on tobacco distribution, not a sales or use tax.
The current fight is narrower but significant for tobacco distributors: whether the product itself falls within the statutory category. Florida’s OTP law taxes defined tobacco products other than cigarettes and cigars. The statute includes “loose tobacco suitable for smoking,” snuff, cavendish, chewing tobaccos, and other forms of tobacco.
Global maintained that hookah tobacco is different because it is heated indirectly, typically by charcoal, and produces vapor rather than smoke from the tobacco itself. A dissenting judge agreed with that concern.
“I agree with my colleagues that the legislature probably intended to tax all ‘other’ tobacco products,” the dissent said. “But the text of section 210.25(12) falls short of that intention.”
The dissent warned that courts should not close the gap between legislative intent and statutory language. “While there may be policy reasons to tax all nicotine delivery products, we cannot use the intent of the legislature to effectively amend the adopted text,” the dissent wrote.
That is the argument Global is now making to the Florida Supreme Court.
The company’s position is that if lawmakers want to clearly tax hookah tobacco, they can update the statute. Until then, Global argues, any doubt should be resolved in favor of the taxpayer — a principle the dissent also emphasized. “Taxes may be collected only within the clear definite boundaries recited by statute,” the dissent wrote, quoting Florida precedent.
For the nicotine industry, the case is another example of old tobacco tax language being tested against product formats that do not fit neatly into legacy categories.
