HB438 Summary

• Defines "heated tobacco product" as a product containing tobacco that produces inhalable aerosol by heating without combustion, excluding cigarettes and smoking tobacco.

• Establishes state tax on heated tobacco products at $0.17 per single-use consumable unit from October 1, 2024, through September 30, 2027, then decreases to $0.0085 per unit through September 30, 2029, and finally to $0.005 per unit thereafter.

• Requires wholesalers, jobbers, semijobbers, and retail dealers to collect heated tobacco product taxes from purchasers at point of sale.

• Levies additional county tax equal to half the state tax rate in counties with existing local tobacco taxes, and additional municipal tax equal to half the local cigarette tax in municipalities with existing tobacco taxes.

• Becomes effective October 1, 2024.