By Doug Wheeler and Aaron Royzis
Florida policymakers have done a good job of creating a regulatory framework that can serve as a model to the rest of the nation for how to support tobacco harm reduction through sound tax policy. As highlighted in an article published in The Journal of The James Madison Institute, our state’s tax code “creates a price differential between more harmful products (like traditional cigarettes) and less harmful alternative tobacco products” (ATPs), including vapes, nicotine pouches and heat-not-burn products.
The Florida Legislature now has an opportunity to codify this into law by passing legislation that would ensure heated tobacco products, or HTPs, are taxed based on the relative lower risk they pose compared to cigarettes and other traditional tobacco products.
As discussed in “Florida Policymakers Should Keep Alternative Tobacco Products Tax-Free,” innovative smoke-free products reduce the health risks associated with smoking traditional cigarettes. From heat-not-burn products that do not produce smoke to electronic nicotine delivery systems (ENDS) and oral nicotine products that remove tobacco’s harmful chemicals completely, smoke-free products help users avoid the health threats posed by smoking, including cancer and chronic obstructive pulmonary disease (COPD). Additionally, these alternative products reduce the external harm posed by cigarette secondhand smoke and allow smokers to use these products without affecting those around them.
Even the FDA recognizes the difference in relative risks of tobacco products as some products pose lower health risks compared to traditional cigarettes, the most harmful type of tobacco product. The agency even distinguishes modified risk tobacco products as a separate category for authorization, and some states have begun applying significantly lower taxes to those products compared to traditional tobacco products.
Taxing tobacco and nicotine products based on the relative harm they pose to consumers and the burden they place on public health is a smart way to reduce the negative health outcomes associated with smoking cigarettes without relying on prohibition or excessive taxation. By taxing smoke-free products less than combustible cigarettes—or, as Florida does with most of these products, not taxing them at all—lawmakers can offer a financial incentive for adults who smoke to switch to less harmful products and improve their health.
Keeping tax rates lower on smoke-free products compared to traditional cigarettes is necessary to help incentivize more adults who smoke to switch to less harmful alternatives, as quitting altogether has proven to be a rather daunting and challenging goal. Each year, fewer than one in 10 adults who smoke succeed in quitting, according to the U.S. Centers for Disease Control and Prevention (CDC), and half of adults who smoke cigarettes report trying to quit in the past year. However, individuals are significantly more likely to switch to less harmful alternatives, especially if these alternatives are cheaper and easier to access than traditional cigarettes. Having more options and sources of nicotine that pose substantially less harm and are taxed at lower rates will only help reduce smoking rates in the Sunshine State and across the country.
Maintaining a tax code in line with the benefits of tobacco harm reduction is good for public health, and the legislature should take the opportunity to solidify this tax policy and write it in to law. House Bill 785 and Senate Bill 1418 are under consideration by the Florida Legislature seeking to provide regulatory clarity on this issue by redefining the terms “cigarette” and “tobacco products” in Florida statutes and introducing the definition of “heated tobacco product.” This would be an important step in codifying the kind of risk-based taxation that Florida already maintains, legally setting it in stone, and reducing the harms and associated costs of traditional tobacco products to both smokers and the general public.
Doug Wheeler is the director of the Gibbs Center for Economic Prosperity at The James Madison Institute.
Aaron Royzis is a policy intern at The James Madison Institute.
