Hawaii Considers to Impose an 80% Sales Tax On Nicotine-Related Items

Update 8/26/2021

In February 2021, Hawaii again proposed raising sales tax on nicotine-related items. The state legislature considered a measure that would increase the tax from 16 cents per cigarette to 21 cents. That would raise the tax on a pack of cigarettes by $1. 

Original Post

Since 2009, Hawaii has levied a 70% tax on the wholesale price of tobacco products. "The Senate version of House Bill 145, approved Monday by the Senate Committee on Commerce and Consumer Protection, would expand the definition of tobacco products to include anything that contains nicotine and would impose an 80% tax on the wholesale price starting January 1, 2016."

Relying heavily on tobacco-related tax revenues, the University of Hawaii Cancer Research Center would benefit by receiving the new revenue on chewing tobacco, e-cigarettes, and other products.

Many small businesses selling e-cigarettes could face an economic disadvantage compared to competitors outside of Hawaii. If your small to medium-sized business needs a sales and use tax solution for calculating sales tax and/or returns, Vertex Cloud is here to help. We offer pay-as-you-go pricing with no upfront fees.