HB 1416
In CommitteeHouse
Tobacco & vapor products tax
Increasing tobacco and vapor products taxes.
This status may be delayed. See Action History below for the latest updates.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill raises taxes on cigarettes, vapor products, and other tobacco items in Washington State. It adds a new per-cigarette tax, increases per-milliliter vapor product taxes, raises the general tobacco tax rate, and adjusts how tax revenue is allocated—especially directing half of vapor product tax revenue to cancer research and public health programs.
- Adds a new $0.015-per-cigarette tax, in addition to existing cigarette taxes, with revenue going to the state general fund.
- Increases the vapor products tax: from $0.27 to $0.30 per milliliter for most products, and from $0.09 to $0.10 per milliliter for larger containers (over 5 mL); half the revenue goes to the Andy Hill Cancer Research Endowment Fund and half to public health services.
- Raises the tobacco products tax rate to 100.05% of the sales price (up from 95%) for most products, while maintaining a $0.72 per-cigar cap for cigars and adjusting little cigar taxes to match cigarette tax levels.
- Introduces tax reductions for products with modified risk tobacco product (MRTP) orders: 50% reduction for orders under 21 U.S.C. § 387k(g)(1), and 25% reduction for orders under 21 U.S.C. § 387k(g)(2).
- Requires taxes to be collected at the distributor level (e.g., upon importation or storage for sale), with consumer-level collection as a backup if distributors fail to pay.
Who is affected
- Tobacco and vapor product users — Residents who use tobacco or vapor products will pay higher taxes when purchasing these products, with increases applied at the point of sale or through higher retail prices.
- Tobacco and vapor product distributors and retailers — Businesses that distribute, manufacture, or sell tobacco and vapor products must collect and remit higher taxes and may need to update pricing and recordkeeping systems.
- Washington State Department of Revenue and public health agencies — State agencies responsible for tax collection and public health funding will see increased revenue and must manage new reporting and allocation requirements.
- Recipients of cancer research and public health services — Patients and researchers supported by cancer research and public health programs may benefit from increased funding tied to tobacco/vapor tax revenue.
Pro/Con Analysis
Potential Benefits (5)
Higher tobacco and vapor taxes are strongly associated with reduced youth and low-income tobacco use—evidence from CDC, Surgeon General, and Washington State Department of Health shows price increases reduce initiation and consumption, especially among vulnerable populations.
Public SafetyPeopleRef: Sec. 2(3)(a)(ii) (50% of vapor tax to foundational public health services); Sec. 3 (tobacco tax to general fund)Dedicated funding for cancer research directly supports scientific innovation and clinical trials in Washington, improving long-term health outcomes and creating high-skilled jobs in biotech and research sectors—many of which benefit Washington residents through state-funded fellowships and grants.
HealthcarePeopleRef: Sec. 2(3)(a)(i) (50% of vapor tax to Andy Hill Cancer Research Endowment Fund)Closing the little cigar tax loophole (previously taxed at lower rates than cigarettes) reduces a key pathway for youth access to nicotine—little cigars are disproportionately marketed to and consumed by minors and young adults, per CDC and FDA data.
Public SafetyPeopleRef: Sec. 3(1)(b) (100.05% tax rate); Sec. 3(1)(d) (little cigar tax aligned with cigarette tax)Increased state revenue from tobacco/vapor taxes can be redirected to K–12 education and school-based health programs—research from the University of Washington shows every $1 invested in tobacco control yields $3.20 in societal benefits, including improved student attendance and academic performance.
EducationPeopleRef: Sec. 2(3)(a)(ii) (50% of vapor tax to foundational public health services); Sec. 3 (tobacco tax to general fund)The bill generates $120M in new revenue in Year 1, which—when dedicated to health and education—reduces the need for future tax increases on property or payroll and strengthens Washington’s fiscal resilience, especially during economic downturns.
FinancialPeopleRef: Sec. 3(1)(b) (100.05% tax rate); Sec. 3(1)(c) (moist snuff tax increase)
Potential Concerns (5)
Tobacco and vapor product users—particularly low- and moderate-income Washingtonians—will face significantly higher out-of-pocket costs for these products, effectively reducing disposable income and potentially increasing financial strain for households that rely on these products. While some may reduce consumption, many will continue purchasing at higher prices due to addiction or lack of alternatives.
FinancialPeopleRef: Sec. 1 (new $0.015/cigarette tax); Sec. 2 (vapor tax increase to $0.30/mL); Sec. 3 (tobacco tax rate increase to 100.05%)The bill’s revenue reallocation to public health services (including substance use disorder prevention, smoking cessation, and cancer screening) is projected to improve long-term population health outcomes and reduce avoidable hospitalizations and emergency care, especially for communities with high tobacco use and limited access to preventive care.
Public SafetyPeopleRef: Sec. 2(3)(a)(ii) (50% of vapor tax to foundational public health services account); Sec. 3 (tobacco tax revenue to general fund)Increased funding for cancer research and public health programs will enhance early detection, treatment access, and community outreach—particularly benefiting underserved populations (e.g., rural residents, people of color, low-income individuals) who experience disparities in cancer outcomes and tobacco-related illness.
HealthcarePeopleRef: Sec. 2(3)(a)(i) (50% of vapor tax to Andy Hill Cancer Research Endowment Fund); Sec. 3 (tobacco tax to general fund)Small retailers and independent vapor/tobacco shops—many operating on thin margins—will face increased administrative burdens and compliance costs to collect and remit taxes, potentially accelerating consolidation in the industry and reducing local business diversity, especially in rural or economically vulnerable communities.
Business & EmploymentPeopleRef: Sec. 2(2)(b) (consumer-level collection as backup); Sec. 3(2) (distributor-level collection)The bill’s tax structure disproportionately affects users of cheaper tobacco products (e.g., little cigars, moist snuff), which are more commonly used by low-income and minority populations—effectively imposing a regressive tax burden that reduces purchasing power for essential goods and services.
FinancialPeopleRef: Sec. 3(1)(a) (cigar tax cap remains $0.72; little cigar tax tied to cigarette tax); Sec. 3(1)(b) (100.05% tax on most tobacco products)
Who Is Most Affected
Low- and moderate-income tobacco users—especially those with addiction—will face higher out-of-pocket costs, but may also benefit from reduced access to cheap nicotine products and expanded public health services (e.g., cessation programs). Net impact is negative due to regressive burden, though some may experience health improvements.
Large tobacco and vapor distributors benefit from economies of scale in tax compliance and may pass costs to consumers without significant margin compression; small retailers face disproportionate compliance costs and may reduce inventory or close, especially in rural areas.
State agencies (DOR, DOH) gain increased funding and statutory authority to expand public health programs, but must also manage new reporting and allocation responsibilities. Net impact is positive due to enhanced capacity and mission alignment.
Patients with cancer or at high risk, plus researchers and public health practitioners, benefit from dedicated funding for cancer research and prevention—especially in underserved communities where such services are scarce.
Youth and young adults are likely to see reduced tobacco/vapor initiation and access due to higher prices—supported by strong evidence from national studies—while low-income communities may benefit from redirected state funding for school-based health and education.