HB357 Alabama 2025 Session

Summary

Primary Sponsor

Rolanda HollisRepresentative

Democrat

Session

2025 Regular Session

Title

Tobacco products, heated tobacco product definition and tax provided for

Summary

HB357 defines cigarettes and heated tobacco products and adds a new per-unit tax on heated products, along with stamping, reporting, and local tax provisions.

What This Bill Does

It defines what counts as a cigarette, a heated tobacco product, and a cigarette intended to be heated. It imposes a state tax of 0.017 per single-use unit on heated tobacco products and 0.017 per heated cigarette starting November 1, 2025. It allows counties and municipalities to levy additional half-rate local taxes on these heated products, collected at the time of purchase, and requires stamping and reporting rules for sellers to collect the tax and monitor compliance.

Who It Affects

• Tobacco wholesalers, jobbers, distributors, and retailers in Alabama: must stamp products, collect the new taxes from buyers, maintain records, file monthly reports, and face penalties for noncompliance.
• Alabama residents and local governments: consumers pay higher prices for heated products and heated cigarettes due to the new taxes; counties and municipalities may collect additional local taxes at half the state rate, with revenue allocated to state Medicaid and local governments.

Key Provisions

• Defines 'cigarette', 'heated tobacco product', and 'cigarette intended to be heated' (cigarettes intended to be heated are taxed as heated cigarettes).
• Creates a new state tax of 0.017 per single-use consumable unit on heated tobacco products beginning November 1, 2025.
• Creates a new state tax of 0.017 per cigarette intended to be heated beginning November 1, 2025.
• Authorizes county and municipal governments to impose additional local taxes on heated products and heated cigarettes equal to half of the state/local rate, collected at the time of purchase.
• Establishes stamping requirements, with stamps affixed to retail containers or packages and detailed filing, invoicing, and recordkeeping rules for wholesalers and retailers.
• Imposes penalties for noncompliance, including fines, possible license revocation, and contraband seizures for untamped or untaxed products.
• Requires monthly reporting by wholesalers, jobbers, and retailers for purchases and imports, and allows the Department of Revenue to access information to identify distributors.
• Specifies that revenue from the additional state tax funds Medicaid, and local taxes support local governments where applicable.
• Effective date set for November 1, 2025.

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

Subjects

Taxation & Revenue