On Friday, Alaska Gov. Mike Dunleavy vetoed SB 24, a bill that would have allowed for the creation of cigar lounges in the state. However, it wasn’t the cigar lounge portion of the bill that led to the veto; it was a new tax on e-cigarettes.
In his veto letter, the governor said that while he supports efforts to keep tobacco and nicotine products away from minors, he could not support the creation of a new tax, an expansion of the regulatory burden on retailers, and increasing costs for both adult consumers and small businesses. He did say that his administration stands ready to support a bill that raises the minimum age without imposing new taxes.
SB 24 contained several changes to the state’s laws regarding tobacco. First, it would have raised the state’s minimum age to purchase and possess tobacco and nicotine products from 19 years old to 21 years old, bringing it in line with the national minimum.
It also changed state laws so that smoking would be allowed in a retail cigar store, provided it met several requirements, including generating at least 60 percent of its gross revenue from on-site cigar sales and rentals of humidors, does not allow the smoking of cigarettes, and contains a walk-in or stand-up humidor, among other requirements.
But what ultimately did the bill do was the imposition of a new tax on electronic cigarettes at the rate of 25 percent of the retail sales price, as well as a new tax on synthetic nicotine products and nicotine substitutes at the rate of 75 percent of the wholesale price.
This is not the first time that Dunleavy has vetoed a bill like this; in 2022, he vetoed SB 45, which would have raised the tobacco purchasing age and impose a tax on e-cigarettes.
