New York Gov. Kathy Hochul is proposing to tax nicotine pouches as part of her fiscal year 2027 executive budget proposal.
The proposal would impose a tobacco excise tax on alternative nicotine products—noncombustible items that contain nicotine but not tobacco—which are currently untaxed under the state.
State officials estimate the change would generate $18 million in revenue for fiscal 2027, rising to $57 million annually by fiscal 2030, according to the state’s budget memo. The tax would take effect on or after Sept. 1.
In response, the New York Association of Convenience Stores (NYACS), based in Albany, New York, issued the following statement:
“Taxes without enforcement have already made New York the epicenter of illicit tobacco trafficking. Imposing a new tax on nicotine pouches will only expand criminal activity, drive street-level sales, and make it harder for smokers to quit. Public health experts agree nicotine pouches are far less harmful than cigarettes and comparable to nicotine gum in supporting cessation. Taxing these products keeps people smoking and disproportionately harms those who are least able to afford it. New York’s tobacco control strategy should be consistent, rooted in science, and focused on enforcement. Let’s work together on strategies that combat the illicit market and protect small business while creating economic incentives to help smokers quit.”
The proposal is also considering changes to the taxation and regulation of vapor products, including the creation of a state registry of vaping products that can be sold in the state.
“These changes would create a taxing structure that would allow for tax department enforcement against contraband vapor products,” according to the state’s budge memo.
The proposal is also looking to add a distributor tax of 55 cents per unit on vapor products imported into or manufactured in the state, in addition to the existing 20% retail tax paid by dealers.
The state budget must be approved by April 1, the start of New York’s fiscal year.
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