Increase Cigarette & Tobacco Products Taxes
If enacted, SB20 would substantially alter existing state laws related to taxation on tobacco products. The excise tax on tobacco products would be raised to sixty-seven and one-half percent of the wholesale price, with specific tax rates established for various tobacco items—cigars, little cigars, and e-liquids. Furthermore, a portion of the revenues generated from these tax increases would be allocated to the Nicotine Use Prevention and Control Fund, which is meant to finance initiatives intended to discourage nicotine use among youth and to support related health programs.
Senate Bill 20 (SB20), introduced by Senator Martin Hickey during the first session of the 57th Legislature of New Mexico, seeks to increase the tax rates on cigarettes and other tobacco products, including e-cigarettes and related products. The bill also aims to include nicotine, irrespective of its source, in the definition of tobacco products under the Tobacco Products Tax Act. The tax modifications are intended to generate additional funding for the newly created Nicotine Use Prevention and Control Fund, which will focus on educational programs aimed at reducing nicotine use among individuals aged five to twenty-five years old.
The bill has raised significant debate during discussions, particularly concerning its implications for small businesses and consumer rights. Proponents argue that the increased taxation is a crucial step for public health, citing research that suggests higher tobacco taxes lead to reduced consumption, especially among youth. Conversely, opponents of the bill express concern that such tax increases may disproportionately affect low-income communities and small retailers, potentially driving consumers to purchase tobacco products through unregulated channels or outside the state. There are also worries that the state is overreaching in enforcing what some consider a personal choice in nicotine consumption.