Senate committee approves lower excise on heated tobacco, adds vape milliliter tax

The Senate Finance Committee adopted a package taxing new tobacco products, voting to report the bill as amended after two roll-call stage votes.

Gibson summarized the measure as creating a new levy on heated tobacco products and adding an excise on vapor products. "The levy is 14.25 mils on each cigarette," he said, which translates into about 28.5¢ for a 20-pack. A committee amendment layered a 5¢ per milliliter excise on nicotine liquid solutions used in vaping devices; revenue would be deposited in the South Carolina Medicaid Reserve Fund.

Supporters said testimony indicated heated tobacco products (HTPs) are less harmful than combustible cigarettes and that a lower excise could help smokers switch to less risky products. One senator described a 10-year Japanese study showing migration from combustible to heated products and said, "For those reasons, I voted in favor of this bill because I believe that a lower... excise tax was warranted based on it being not as harmful." He also supported an excise on vapes to address youth use.

Opponents questioned prevalence and effect-size: several senators said HTPs may not yet be sold widely in the state and asked whether a 28¢ differential would meaningfully change behavior. A member worried about the policy trade-off: "I just can't imagine somebody's making a conscious consumer decision over 30¢ a pack." Public-health groups, including the American Heart Association and cancer groups, testified that HTPs are ‘‘less harmful’’ but still pose risks and did not support incentives encouraging use.

Committee adoption: The committee approved the Hetto amendment imposing the vape excise (15–3) and later voted to report the bill as amended (reported tally given as 13–4). The measure was routed from the committee with those recorded margins.

What happens next: The bill moves to the Senate floor; proponents said additional floor amendments on license or revenue rules could follow.