By Timothy S. Donahue
Top Takeaways:
New taxes: Alaska lawmakers approved a bill creating a new state tax on vaping products and e-cigarettes.
Tobacco 21: The legislation formally raises Alaska’s legal tobacco and nicotine purchase age from 19 to 21.
Cigar lounge carve-out: Lawmakers also added language legalizing on-site cigar lounges despite objections from some public-health advocates.
Alaska lawmakers have approved a sweeping nicotine policy bill that creates a new vape tax, formally raises the state’s tobacco age to 21, and legalizes cigar lounges, and it now heads to Gov. Mike Dunleavy.
Senate Bill 24 passed the Alaska House 24-16 before clearing the Senate on a concurrence vote on the final day of the legislative session. If enacted into law, the measure would impose a new 25% tax on the retail sale price of electronic smoking products starting Jan. 1, 2028.
The legislation also updates Alaska law to align with the federal Tobacco 21 standard enacted nationwide in 2019. “It brings some parity to the way we treat vaping and cigarettes, both in terms of the way we tax it, and the way we say to children, ‘You can’t use that,’” said Andy Josephson, who sponsored the bill. “And that’s because vapes are dangerous just as tobacco is.”
Supporters argued that aligning state law with the federal age standard would simplify enforcement for retailers and regulators. Gary Stevens, who has introduced versions of the legislation for several years, said that matching federal law would provide clearer enforcement standards.
The legislation arrives after Gov. Dunleavy vetoed a similar proposal in 2022 amid objections to a proposed 35% wholesale vape tax. This year’s bill instead applies a lower 25% retail tax rate. According to Alaska’s Department of Revenue, the new tax could generate between $1.36 million and $3 million in its first year.
Alaska currently taxes cigarettes at $2 per pack and levies a 75% wholesale tax on many traditional tobacco products, but electronic smoking products were previously not explicitly covered by state tobacco tax statutes. The bill also imposes a $100 penalty on minors caught possessing nicotine products. Lawmakers reduced the fine from the previously proposed $300 amount following extended House negotiations.
During debate, Republican Rep. Will Stapp unsuccessfully proposed exempting active-duty military personnel aged 19 and 20 from underage possession penalties. “You know what’s bad for your health, co-chair? War,” Stapp said during a committee hearing while arguing military members old enough for combat should not face penalties for nicotine use, according to local media.
One of the bill’s most debated provisions involved cigar lounges. Lawmakers ultimately approved an amendment legalizing cigar lounges and permitting on-site cigar smoking in Alaska.
Republican Rep. Kevin McCabe introduced the amendment. Josephson opposed the provision, arguing that it conflicted with the legislation’s broader public-health goals. The amendment passed with bipartisan support.
