HB438 Alabama 2024 Session

Summary

Primary Sponsor

Rolanda HollisRepresentative

Democrat

Session

Regular Session 2024

Title

Tobacco products, heated tobacco product definition and tax provided for.

Summary

HB438 defines heated tobacco products and creates a new per-unit tax with stamping and local tax rules for them in Alabama.

What This Bill Does

It defines heated tobacco products as tobacco products that produce an inhalable aerosol by heating rather than burning, and excludes cigarettes and smoking tobacco. It creates a state per-unit tax on heated tobacco products with three rate periods: $0.17 per unit from Oct 1, 2024 to Sept 30, 2027; $0.0085 per unit from Oct 1, 2027 to Sept 30, 2029; and $0.005 per unit starting Oct 1, 2029. It requires wholesalers, jobbers, and retailers to collect the tax and apply stamps to packaging, with the tax passed to the purchaser and penalties or confiscation for noncompliance. It also adds local license taxes for heated tobacco products in counties and municipalities with existing local tobacco taxes, set at half of the state rate and collected at sale.

Who It Affects

• Businesses involved in heated tobacco products, including manufacturers, wholesalers, jobbers, semi-jobbers, and retailers, who would be responsible for collecting the tax, affixing stamps, and remitting the tax to the state.
• Consumers who purchase heated tobacco products, who would pay the per-unit tax as part of the purchase price.

Key Provisions

• Defines heated tobacco product as a tobacco product that produces inhalable aerosol by heating rather than burning, and clarifies it does not include cigarettes or smoking tobacco.
• Amends sections 40-25-1 and 40-25-2 to add heated tobacco products to the taxed items and establishes a per-unit tax schedule with dates: $0.17 per unit (2024-10-01 to 2027-09-30), $0.0085 per unit (2027-10-01 to 2029-09-30), and $0.005 per unit (2029-10-01 onward).
• Requires tax collection by wholesalers, distributors, jobbers, semijobbers, or registered retailers, with stamps or approved methods attached to packaging and a system to ensure the tax is collected from the purchaser at sale.
• Imposes local license or privilege taxes on heated tobacco products in counties and municipalities with local tobacco taxes, set at half of the corresponding state or local rate and collected at the time of purchase.
• Establishes enforcement measures including unlawful acts for failing to collect or remit the tax and potential confiscation of taxable products lacking proper stamps or payment.
• Effective date of the act is October 1, 2024.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Alcoholic Beverages & Tobacco