House Bill 1229 sets out to amend Title 48 of the Official Code of Georgia Annotated, relating to revenue and taxation. The bill’s supporters are pushing for an increase and revision of the tax rate on tobacco products while much of the bill’s focus and target is on alternative nicotine products, a category that is seeing a growth as the sales and use of traditional tobacco products continues to see declines.
Much of this bill focuses on alternative nicotine products, a term or product category that may be unfamiliar to many. The bill defines this category of products as any material that contains nicotine but does not contain tobacco leaf. These products can be chewed, absorbed, dissolved, or ingested rather than just smoked as traditional combustible tobacco products like cigarettes. These could include nicotine gels, pouches, gums, dissolvable nicotine strips, sticks, lozenges, or pellets. This product category does not include the “traditional” combustible tobacco products like cigars, cigarettes, smokeless tobacco or other covered tobacco products currently regulated by the U.S. Food and Drug Administration (FDA).
House Bill 1229 calls for excise taxes to be applied to alternative nicotine products and other vapor products. It also would require importers, manufacturers, distributors and dealers of alternative nicotine products and vapor products to have certain licenses, thereby giving the state the ability to seek license fees, suspensions, revocations and renewals. The state would also require certain reports and would inspect certain records pertaining to these products. If passed, the state would also have the power to prohibit certain actions related to the sale and transportation of alternative nicotine products and vapor products and agents and offers of the Department of Revenue would be able to conduct warrantless searches and seizures of these products.
Proposed revisions to the taxes collected from other tobacco products sold within the state also should be a concern for tobacco businesses operating or having business in Georgia. For excise taxes imposed on covered tobacco products like cigars, cigarettes and smokeless tobacco products, the bill proposes an increase from 23 to 39 percent of the wholesale cost price on these products.