Nebraska lawmakers have advanced a proposal to impose a twenty percent tax on the wholesale price of nicotine pouches, including the popular brand Zyn. Legislative Bill Nine received first-round approval on Wednesday with a unanimous forty-one to zero vote, sending it forward to the second of three rounds of debate. An effort to replace the flat tax with a per-ounce tax, similar to the tax applied to snuff products, failed during the discussion.
Nicotine pouches like Zyn, which contain powdered nicotine absorbed through the mouth, have surged in popularity, particularly among younger users, thanks to social media marketing and influencer endorsements. Philip Morris International acquired the product’s manufacturer in twenty twenty-two, and sales skyrocketed, with over one hundred thirty-one point six million cans sold in the first quarter of twenty twenty-four alone—an eighty percent increase from the same period last year. Despite concerns from federal lawmakers and the FDA about underage access to these products, they are currently only subject to Nebraska’s standard five point five percent sales tax, rather than a “sin tax” like other tobacco products.
Senator Jana Hughes introduced the bill to change that, classifying nicotine pouches under the section of state law governing tobacco product taxes. Legislative analysts estimate that the tax could generate approximately two point five million dollars in new annual revenue. However, the proposal sparked debate. Lincoln Senator Jane Raybould attempted to amend the bill by replacing the twenty percent tax with a weight-based rate, similar to the forty-four cents per ounce tax on snuff products. She argued that taxing nicotine pouches at a higher rate than cigarettes and moist snuff sends the wrong message by implying they are equally harmful, despite being marketed as a safer alternative.
Raybould acknowledged that the tobacco industry had encouraged her to propose the amendment but did not confirm whether Philip Morris specifically requested the change. Senator Hughes, however, dismissed the argument that nicotine pouches are primarily used to help people quit smoking. She cited an example of her twenty-five-year-old daughter attending an outdoor concert in Kansas City, where Zyn representatives were handing out free samples. Hughes claimed this type of promotion is aimed at getting a new generation addicted to nicotine, rather than serving as a smoking cessation tool.
The bill now moves to the next round of debate, with lawmakers set to continue discussions on Monday.
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