All Roll Calls
Yes: 139 • No: 75
IowaSF 248091st General Assembly (2025–2026)SenateWALLET
A bill for an act relating to the taxation and regulation of alternative nicotine products and vapor products, making appropriations, and including effective date provisions. (Formerly SSB 3193.) Effective date: 01/01/2027.
Sponsored By: COMMITTEE ON APPROPRIATIONS
Signed by Governor
ways and meansappropriations
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Bill Overview
Analyzed Economic Effects
7 provisions identified: 2 benefits, 4 costs, 1 mixed.
New Funding Supports Kids With Cancer
The law creates an interest-earning Health Care Trust Fund for existing cigarette and tobacco taxes and new nicotine and vapor taxes. Its money cannot be transferred to the general fund. Beginning July 1, 2027, the first $3 million in annual net added product-tax revenue goes to the State Board of Regents. It supports pediatric cancer research, access to clinical therapies, and physician-scientist leadership at the University of Iowa Stead Family Children's Hospital. Regents must report each December 1 on funded programs, patients, trials, and outcomes; funding does not guarantee individual payments or care.
Distributors Can Recover Certain Product Taxes
Beginning January 1, 2027, distributors can recover reported and paid taxes on covered nicotine and vapor products. Refunds or credits cover products shipped outside Iowa for out-of-state use or sale, returned to manufacturers, or destroyed by distributors. Taxpayers can also receive refunds of overpaid product taxes. The Department of Revenue administers these refunds under the director's rules, with refund payments funded by the general fund.
Buyers Must Report Untaxed Nicotine Products
Beginning January 1, 2027, consumers owe tax on covered nicotine or vapor products acquired for use or storage in Iowa when the product tax is unpaid. The same rates apply as the distributor tax. You must file a monthly return and pay by the 20th day of the next month. You have no return duty under this rule when the product tax was already paid.
Nicotine Shippers Face Reports and Penalties
Beginning January 1, 2027, shipment-reporting rules cover alternative nicotine and vapor products entering Iowa. Common carriers must report electronically by the 10th day of each month for the prior month's deliveries. Covered transportation by others must be reported within 30 days. Reporting failures can lead to a serious misdemeanor and a $50 penalty for each late-report occurrence. Exceptions include certain shipments by licensed out-of-state distributors to Iowa retailers.
Nicotine Businesses Face Licensing and Record Rules
Beginning January 1, 2027, covered nicotine and vapor distributors and subjobbers need a license for each business location. Eligible out-of-state businesses shipping to Iowa retailers can apply for distributor licenses. Covered distributors, subjobbers, retailers, and public warehouses generally must keep itemized invoices and transaction records for three years. Revenue officials may inspect licensed premises without a warrant, and blocking inspections can lead to license revocation. The director may suspend, revoke, or cancel licenses after notice and a hearing.
New Taxes on Nicotine and Vapor Products
Beginning January 1, 2027, Iowa taxes covered nicotine and vapor products, including products with nicotine-like chemicals called nicotine analogs. Alternative nicotine products carry a 5-cent tax per container with up to 20 units; extra units are taxed proportionally. Vapor solution containing nicotine or nicotine analogs is taxed at 5 cents per milliliter, including fractions. The distributor tax covers products brought into Iowa for sale, made here for sale, or shipped to Iowa retailers, using manufacturer-listed net volume. These taxes add to other state taxes, but each product is taxed only once under this tobacco-tax system; federal exemptions and exclusions for specified FDA-regulated products and vapor components still apply.
Sellers Face Tax Duties With Limited Discounts
Beginning January 1, 2027, covered Iowa distributors and licensed out-of-state distributors report prior-month quantities and wholesale prices monthly. Returns and tax payments are due by the 20th; the Revenue Director may allow a discount of up to 5%. Retailers making taxable deliveries within Iowa must remit the added product tax. Retailers holding or required to hold delivery permits cannot use lack of physical presence to avoid sales, use, or product-tax duties. When applicable rates rise, resale inventory faces an inventory tax, based on the old-to-new tax difference for already-taxed products and the applicable calculation for untaxed stock.
Sponsors & Cosponsors
Sponsor
COMMITTEE ON APPROPRIATIONS
Affiliation unavailable
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
House vote • 5/2/2026
Passed House
Yes: 67 • No: 18
legislature vote • 5/2/2026
Amendment H-8468
Yes: 28 • No: 57
Senate vote • 4/22/2026
Passed Senate
Yes: 44 • No: 0
Actions Timeline
Signed by Governor.
5/26/2026SenateFiscal note.
5/19/2026legislatureReported correctly enrolled, signed by President and Speaker, and sent to Governor.
5/18/2026SenateMessage from House.
5/2/2026SenateImmediate message.
5/2/2026HouseExplanation of vote.
5/2/2026HousePassed House, yeas 67, nays 18.
5/2/2026HouseExplanation of vote.
5/2/2026HouseAmendment H-8468, yeas 28, nays 57, filed, lost.
5/2/2026HouseExplanation of vote.
5/2/2026HouseAmendment H-8467, yeas 30, nays 55, filed, lost.
5/2/2026HouseUnanimous consent for immediate consideration.
5/2/2026HousePlaced on Appropriations calendar.
5/2/2026HouseCommittee vote: Yeas, 20. Nays, 1. Excused, 4.
5/2/2026HouseCommittee report, recommending passage.
5/2/2026HouseSubcommittee recommends passage.
5/1/2026legislatureSubcommittee Meeting: 05/01/2026 10:00AM RM 304.
4/30/2026legislatureSubcommittee: Weldon, Johnson, R. and Wood.
4/30/2026HousePursuant to Rule 31.7, referred to Appropriations.
4/29/2026HouseCommittee vote: Yeas, 20. Nays, 4. Excused, 1.
4/28/2026HouseCommittee report, recommending passage.
4/28/2026HouseSubcommittee recommends passage.
4/27/2026legislatureFiscal note.
4/23/2026legislatureSubcommittee Meeting: 04/27/2026 12:30PM RM 304.
4/23/2026legislatureSubcommittee: Siegrist, Wessel-Kroeschell and Young.
4/23/2026House
Bill Text
As Introduced
Enrolled
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