Nebraska to tax nicotine pouches at 20% wholesale

Nebraska lawmakers have moved forward with a bill to tax alternative nicotine products. This includes items like nicotine pouches, commonly known as Zyn. The bill, introduced by State Senator Jana Hughes, aims to impose a 20% wholesale tax on these products. The legislation was passed unanimously, with a vote of 41-0. Senator Hughes wants the bill to cover all future nicotine-like products without needing new laws each time something new is released. She believes this will help reduce youth usage and generate revenue for the state. Currently, these products are taxed like other goods at a 5.5% sales tax rate. The new bill could raise an estimated $3.4 million in its first two years if it becomes law. Hughes has previously proposed several bills to increase taxes and regulations on nicotine products, particularly vaping products. One such bill proposes a 40% wholesale tax for vapes. This tax could help address Nebraska's budget shortfall and support funding for K-12 schools. Some lawmakers have expressed concerns about the bill. Senator Jane Raybould proposed an amendment for a weight-based tax instead of the wholesale tax. She argued that this approach might treat alternative nicotine products unfairly compared to traditional tobacco. However, her amendment was rejected 24-5. Senator Hughes defended the wholesale tax as fairer and safer, noting that a weight-based tax could encourage dangerous product concentrations. The bill will undergo two more rounds of debate before a final vote.