Albany – A Critical Situation

Convenience store owners and various industry groups are urging Governor Hochul to reconsider her plans for hefty new taxes on nicotine pouches.

The so-called “bro tax” would apply a 75% tax on these alternative nicotine products, similar to that of cigarettes, and is projected to bring in about $50 million annually for New York’s budget.

However, shop owners are expressing concerns that this tax would be detrimental to sales, as it might drive consumers toward a dangerous underground market for these products.

“We all stand together on one thing: This tax will do more harm than good,” stated Alison Ritchie, president of the New York Convenience Store Association.

She added, “NYACS endorses strict enforcement and efforts to curb youth access. What we oppose are policies that penalize law-abiding small businesses while enabling lawbreakers.”

Former NYC Sheriff Edgar Domenech echoed this sentiment, warning that gangs might exploit these tax increases to push cheaper, unregulated pouches.

“Each time New York raises tobacco taxes, the black market expands,” Domenech remarked, emphasizing that illegal cigarette sales contribute to organized crime.

The New York State Business Council has also joined the coalition against the tax.

“With rising health care costs, we’re looking at the potential removal of products or making them less accessible, which could lead to affordability problems,” said Paul Zuber, executive vice president of the Business Council.

The tax would affect products like VELO, FRE, and Zyns, the first nicotine pouches approved by the FDA early last year.

Dr. Brian Erkila from Philip Morris International, the maker of these pouches, asserted that they provide a healthier alternative to smoking.

“A transition from combustible cigarettes to lower-risk cessation options is a scientifically supported public health strategy, likely to improve the health of New Yorkers who smoke,” a representative from the company said.

If Hochul’s proposal passes, these pouches will be classified similarly to nicotine products, incurring the 75% tax. This addition could yield an extra $44 million to $57 million each year.

In parallel, the state would be required to allocate $50 million yearly to the Health Care Act Resource Fund, assisting lower-income New Yorkers with health care expenses.

The American Cancer Society Cancer Action Network is advocating for broader measures, urging states to also tax e-cigarettes and directly fund tobacco control initiatives.

“Right now, e-cigarettes, snuff, and other tobacco products face much lower tax rates. Some items, like e-cigarette devices and nicotine pouches, present greater dangers than cigarettes yet remain tax-free. This discrepancy makes them more appealing to cost-conscious youth,” the group noted in recent testimony directed at Congress.

Hochul’s spokesperson, Cassandra White, reinforced the governor’s commitment to this proposal, viewing it as part of the battle against Big Tobacco.

“The governor’s suggestions are logical measures to enhance overall public health, counteract manipulative tactics from tobacco companies, and bolster essential protections against harmful products,” the spokesperson stated.