Four years after Governor Dunleavy vetoed a similar measure, the Alaska Legislature passed Senate Bill 24, imposing the state’s first tax on electronic cigarettes and related products. The bill passed the House 24-16 and cleared the Senate on a 15-5 concurrence vote on May 20, the final day of the legislative session. The legislation was the third such bill championed by retiring Senate President Gary Stevens, R-Kodiak, who framed it as a measure to counter the tobacco industry’s efforts to attract young users as traditional cigarette consumption declines.
If signed into law, the bill would impose a 25% tax on retail e-cigarette products and prohibit purchases by anyone under 21, matching the legal age for traditional tobacco. The state’s tobacco tax had not been updated since 2006, before e-cigarettes were widely marketed, and while many Alaska municipalities had since updated their tax systems to include vaping products, the state had not. The State Department of Revenue estimates the new tax would generate between $1.36 million and $3 million annually.
A notable structural difference from the 2022 version that Dunleavy vetoed, which proposed a 45% wholesale tax, is the shift to a retail-level tax. The change reflects the varying types of e-cigarette products: while some are sold as complete units, others are assembled by retailers from liquids and components, making it very difficult to track down all suppliers for a wholesale-level tax. During the legislative process, an amendment was also added to include synthetic nicotine products within the scope of the tax program.
The most controversial amendment to the bill allows indoor smoking at designated cigar bars, added during House floor debate. While anti-tobacco organizations had advocated for the bill, they said the cigar amendment undermines smokefree environment protections, with the American Heart Association, the American Cancer Society Cancer Action Network, and the American Lung Association issuing a joint statement that there is no safe level of exposure to secondhand smoke.
The bill now awaits action by Governor Dunleavy, whose office declined to comment on whether he intends to sign, veto, or allow it to become law without his signature. The Alaska legislation arrives as the Trump administration moves in the opposite direction at the federal level: the FDA on May 5 authorized the use of four types of flavored vapes, including mango and blueberry, and the federal government continues to impose no excise tax on e-cigarette products.
