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AlaskaSB 2434th Legislature (2025-2026)SenateWALLET

TOBACCO/NICOTINE/E-CIG AGE; E-CIG TAX

Sponsored By: Gary Stevens (Republican)

Vetoed

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Bill Overview

Analyzed Economic Effects

11 provisions identified: 3 benefits, 5 costs, 3 mixed.

Nicotine distributors face broader wholesale taxes

The law extends the 75% wholesale-price excise tax to synthetic nicotine products and nicotine substitutes. It applies to products made in Alaska for sale, imported for sale, or shipped to Alaska retailers for sale. Distributors of these taxable products must get a Department of Revenue license, subject to the existing statutory exception. The state and municipalities may jointly audit businesses owing both state and local taxes on covered nicotine and electronic smoking products. Store prices may rise, but the law does not set the increase.

Safer vape products and less youth marketing

Electronic smoking products offered for sale or distribution must meet safety, packaging, and labeling standards. Vapor components cannot exceed 70 milligrams of nicotine per milliliter and must resist breakage and leaks. Packages must be child- and tamper-proof, clearly identify the product, and list all ingredients, nicotine concentration, and total nicotine. The law bans vitamins and additives marketed to imply health benefits, including caffeine, taurine, vitamin E acetate, stimulants, and colorants. Licensees cannot market products to encourage under-21 use, including youth-attracting flavor promotions; prohibited youth marketing is an unlawful trade practice.

Tobacco and nicotine sales require age 21

The law raises the sales age from 19 to 21 for tobacco, nicotine, and electronic smoking products. Negligently selling or giving these products to someone under 21 is prohibited. A conviction for an underage nicotine or electronic smoking product sale carries a fine of at least $300. Limited vending-machine exceptions remain for specified licensed alcohol premises and private workplaces, with placement, supervision, and warning rules. Endorsed businesses must post a clear under-21 sales warning at least 8.5 by 11 inches.

Buyers face a new vape tax

The law charges 25% of the retail price of closed electronic smoking products and vapor products. In-state licensees must collect it. Out-of-state licensees must collect it after more than 200 Alaska transactions in the current or previous calendar year. Exemptions cover uniformed-services facilities, qualifying FDA-approved products, federally protected sales, and specified nicotine-free marijuana and hemp products. Most of the act starts July 1, 2026; four sections start July 1, 2027.

Vape retailers face fees and reporting

Electronic smoking product retailers need a one-year state license, with a $50 application fee and $50 renewal fee. Businesses holding the specified existing cigarette or tobacco-product licenses do not need this extra license. Renewal requires good standing and no unpaid tobacco taxes. Licensees must report the previous month's quantities, selling prices, and taxes by the last day of each month. They must keep complete purchase, sales, supplier, delivery, and brand records for three years and allow state inspection on demand.

Under-21 possession limits allow education alternatives

The law raises the age for knowing possession of tobacco, nicotine, and electronic smoking products from 19 to 21. Possession violations carry a civil penalty of up to $100. Employees ages 19 and 20 remain exempt while selling products for a business with the required endorsement. At the defendant's request, a court may choose tobacco education instead of a fine. Beginning July 1, 2026, minors charged with non-felony possession go through district court like adults; a parent, guardian, or legal custodian must attend every proceeding.

Adult nicotine shipments require stricter checks

Licensed sellers may ship cigarettes, covered nicotine products, and electronic smoking products to adults 21 or older for personal use. Age must be checked at purchase through a third-party service, and applicable taxes must be paid. Other permitted recipients include specified licensees, bonded warehouses, government bodies, and authorized tribal organizations; unlicensed tobacco shippers' individual-buyer route covers only cigars or pipe tobacco. Carriers must check age before delivery or meet the required recipient-status and document rules; residential deliveries are presumed noncompliant without verification. Non-carriers also face transport limits, and nonmanufacturer packaging must say “product containing nicotine” or “electronic smoking product,” as applicable. Covered nicotine and electronic smoking shipment violations can bring a class A misdemeanor, up to $5,000 per violation, and shared liability for unpaid taxes.

Retailer suspensions expand with compliance relief

Business endorsement suspension reviews now cover tobacco, nicotine, and electronic smoking product sales to people under 21, rather than 19. A business may receive a shorter suspension by proving safeguards were in place before the violation. These include written policies, staff training and acknowledgments, government photo-ID checks, discipline, and compliance monitoring. During suspension or revocation, covered license holders cannot sell electronic smoking products or allow sales on premises they control.

Cigar smoking allowed in qualifying stores

The law allows cigar smoking in qualifying retail cigar stores unless the owner or operator bans it. At least 60% of yearly gross revenue must come from on-site cigar sales and humidor rentals. Stores must have a built-in walk-in or stand-up humidor and cannot sell cigarettes or cigarette tobacco. Smoking is limited to separated cigar areas, with building and location restrictions. Stores must be freestanding or meet attached-building requirements, and cannot be licensed pull-tab businesses or stores within indoor public places or workplaces.

Dedicated money supports quitting and prevention

The law makes the Tobacco Use Education and Cessation Fund a separate state treasury fund. It receives 20% of yearly revenue from Alaska's Philip Morris settlement and 8.9% of annual state tobacco-tax proceeds. Annual electronic smoking product tax proceeds also go into the fund. Money may be appropriated for tobacco education, prevention, control, and quitting programs, or school prevention and detection efforts. This funding does not create a direct household payment.

Youth nicotine medical exceptions become narrower

Products approved only to reduce tobacco harm no longer qualify for specified underage sale and possession exceptions. Exceptions remain for noncombustible products approved by the FDA for quitting tobacco or other medical uses. Products must be marketed and sold for those approved uses. They must come through a prescription, parent or guardian, or state-approved tobacco cessation program. A pharmacist may also supply them without a prescription to someone age 18 or older.

Sponsors & Cosponsors

Sponsor

  • Gary Stevens

    Republican • Senate

Cosponsors

  • Ashley Carrick

    Democratic • House

  • Alyse Galvin

    Not • House

  • Cathy Giessel

    Republican • Senate

  • Andrew Gray

    Democratic • House

  • Elvi Gray-Jackson

    Democratic • Senate

  • Sara Hannan

    Democratic • House

  • Donna Mears

    Democratic • House

Roll Call Votes

All Roll Calls

Yes: 160 • No: 80

Senate vote • 5/20/2026

CONCUR AM OF (H) Y15 N5

Yes: 15 • No: 5

House vote • 5/19/2026

PASSED Y24 N16

Yes: 24 • No: 16

House vote • 5/19/2026

AM NO 6 AS AMD WITHDRAWN Y27 N13

Yes: 27 • No: 13

House vote • 5/19/2026

AM NO 4 ADOPTED Y21 N19

Yes: 21 • No: 19

House vote • 5/19/2026

AM NO 3 FAILED Y19 N21

Yes: 19 • No: 21

House vote • 5/19/2026

EFFECTIVE DATE(S) ADOPTED Y39 N1

Yes: 39 • No: 1

Senate vote • 5/12/2025

PASSED Y15 N5

Yes: 15 • No: 5

Actions Timeline

  1. (S) VETOED BY GOVERNOR 6/18/26

    6/19/2026Senate

  2. (S) 10:14 A.M. 6/1/26 TRANSMITTED TO GOVERNOR

    6/4/2026Senate

  3. (S) MANIFEST ERROR(S)

    6/4/2026Senate

  4. (S) EFFECTIVE DATE(S) SAME AS PASSAGE

    5/20/2026Senate

  5. (S) CONCUR AM OF (H) Y15 N5

    5/20/2026Senate

  6. (S) CONCUR MESSAGE READ AND TAKEN UP

    5/20/2026Senate

  7. (H) VERSION: HCS CSSB 24(FIN) AM H

    5/19/2026House

  8. (H) TRANSMITTED TO (S) AS AMENDED

    5/19/2026House

  9. (H) EFFECTIVE DATE(S) ADOPTED Y39 N1

    5/19/2026House

  10. (H) PASSED Y24 N16

    5/19/2026House

  11. (H) READ THE THIRD TIME HCS CSSB 24(FIN) AM H

    5/19/2026House

  12. (H) ADVANCED TO THIRD READING UC

    5/19/2026House

  13. (H) AM NO 6 AS AMD WITHDRAWN Y27 N13

    5/19/2026House

  14. (H) AM 1 TO AM 6 ADOPTED UC

    5/19/2026House

  15. (H) AM NO 6 OFFERED

    5/19/2026House

  16. (H) AM NO 5 NOT OFFERED

    5/19/2026House

  17. (H) TITLE CHANGE: HCR 32

    5/19/2026House

  18. (H) ...CHANGES TITLE OF LEGISLATION

    5/19/2026House

  19. (H) AM NO 4 ADOPTED Y21 N19

    5/19/2026House

  20. (H) AM NO 3 FAILED Y19 N21

    5/19/2026House

  21. (H) AM NO 2 WITHDRAWN

    5/19/2026House

  22. (H) BEFORE HOUSE IN SECOND READING

    5/19/2026House

  23. (H) Moved HCS CSSB 24(FIN) Out of Committee -- Delayed to a Call of the Chair --

    5/18/2026House

  24. (H) FINANCE at 09:00 AM ADAMS 519

    5/18/2026House

  25. (H) CROSS SPONSOR(S): MEARS, GRAY, CARRICK

    5/18/2026House

Bill Text

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