Delaware and Maine Push Misguided Nicotine Tax Hikes 

Delaware and Maine are pursuing aggressive tobacco and nicotine tax hikes that target not only cigarettes, but also harm-reducing alternatives like pouches and vapor products.  

Delaware House Speaker Melissa Minor-Brown introduced HB 215 on June 6th. The bill, if passed, will trigger a sweeping overhaul of the state’s tobacco taxation. Conveniently, Brown and the bill’s co-sponsors tout its ability to address the half-billion-dollar estimated cost of treating tobacco-related health issues in Delaware each year, a statistic completely unrelated to tobacco free alternatives. Below is a breakdown of how the bill will affect Title 30 of the Delaware Code regarding tobacco product taxation: 
 

1. Increase the cigarette tax by 71%, from $2.10 to $3.60 per pack 

2. Update the definition of tobacco products to “include any products containing, made of, or derived from tobacco or nicotine, rather than only those made primarily from tobacco.” 

3. Increase the vape tax fivefold, from $0.05 to $0.25 per milliliter 

4. Boost the wholesale tax on smokeless tobacco and affixing agents from $200 to $400, increase fees for retailers from $50 to $100, and increase vending machine fees from $15 to $30 per machine 

Yes, you read correctly. Tobacco-free products like vapes and pouches are subject to a tobacco tax; it makes perfect sense! 

These changes have nothing to do with fairness and everything to do with revenue. The bill’s proposed taxes on reduced-risk products like nicotine pouches and vapes will either mirror or exceed those on cigarettes, undermining public health goals and consumer choice. Worse still, the new taxes take effect just before an election year, conveniently raising cash while lawmakers avoid tough budget reforms. HB 215 is currently sitting in the House Administration Committee, with just a week left before the legislature adjourns on June 30th. The bill must advance quickly to make it to the floor before time runs out. 

In Maine, lawmakers are pushing a similar budget band-aid with a $1.50 per-pack cigarette tax hike, the state’s first since 2005. LD 210, currently embedded in the state budget proposal, would raise the cigarette tax from $2.00 to $3.50 per pack while also increasing taxes on nicotine alternatives, much like Delaware’s HB 215. Supporters claim the hike is about health; but in reality, it’s a convenient way to fill budget gaps. Retailers warn the measure will drive consumers across the border to New Hampshire, which has no sales tax and lower tobacco taxes, costing Maine millions in retail revenue and hundreds of jobs. Estimates suggest the tax changes could result in an 11% decline in smokeless product sales and more than $16 million in lost revenue for small businesses. 

Encouraging better health outcomes should not come at the expense of consumer choice and fiscal responsibility. Supporters of the tax in Maine point to its ability to dissuade teens and young adults from developing nicotine addiction. While well-intentioned, this claim ignores real-world data and economic consequences. Raising tobacco taxes doesn’t guarantee reduced smoking rates, especially when it drives consumers across state lines. 

If the goal of these taxes is to ease the burden tobacco use puts on the healthcare system, going after a lower-risk alternative exacerbates the problem, rather than helps. By taxing harm-reduction products like pouches and vapes at rates equal to cigarettes, lawmakers are sending the wrong message: quit smoking, and we’ll still tax you for it. Delaware and Maine should focus on sustainable spending reform, not tax hikes that hit working families and small businesses the hardest.