Tobacco

Proposal to Increase FET on Tobacco Products Cut

Latest reconciliation package omits legislation that would’ve doubled federal excise tax on cigarettes
Cigarette tax
Photograph: Shutterstock

WASHINGTON — An updated version of President Joe Biden’s Build Back Better agenda, also referred to as the reconciliation package, does not include any increase in the Federal Excise Tax (FET) on tobacco.

The previous version of the legislation suggested doubling the federal excise tax on cigarettes and applying tax parity to all other tobacco products—including vapor, which was not previously taxed at the federal level.  

While the new version, released Thursday, may not be the final one, convenience-store association NACS called it and other changes “significant wins” for the convenience and fuel retailing industry. The organization had strongly opposed the increase and organized a coalition of retail groups to publicly oppose it.

“NACS met with moderate Democrats in the House and Senate and encouraged them to go to their leadership and ask that it be removed from the bill, which a number of them did,” NACS, Alexandria, Va., said on its website. “Additionally, NACS called the industry to action sending hundreds of retail letters to the Hill. These efforts appear to have been successful as there is no FET increase in the latest text of the bill.”

Biden said Thursday he was confident the legislation could pass both houses of Congress and called on it to take up the bill “as quickly as possible.”

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