New York Gov. Kathy Hochul’s executive budget proposes applying the state’s existing 75% wholesale tobacco tax to nicotine pouches. The proposal comes as state tobacco tax revenue declined from about $1 billion in 2021 to roughly $793 million last year, while cigarette smuggling — estimated to account for more than half of cigarettes consumed in New York — costs the state about $812 million annually, according to Tax Foundation data. State health data show nicotine pouch use among New York high school students increased from 1.5% in 2022 to 3% in 2025. The tax proposal is under consideration as part of budget negotiations.
