House Finance advances wide tobacco and vaping tax bill with several amendments; military exemption fails

The Alaska House Finance Committee met May 16, 2026, to consider Senate Bill 24, a measure that would expand and restructure taxes and enforcement for tobacco and electronic smoking products. Co‑chair Foster presided and the committee adopted several amendments, rejected one that would exempt active‑duty military from state fines, and left a contentious wholesale‑vs‑retail tax question unresolved until the next session.

The committee voted to adopt Amendment 1, which lowered a cited penalty from $300 to $100. During debate Representative Hannon urged support, saying the change "still keeps it an offense that requires some accountability" while Representative Josephson objected that $100 is "de minimis" and preferred the higher amount. The clerk recorded the roll call at 10 yeas and 1 nay; the amendment passed.

A separate change, Amendment 2, removes a mandatory in‑court appearance for minors cited for tobacco possession. Representative Hammond, who moved the amendment, said he did not "want kids being, immediately funneled into the court system for minor infractions," citing travel burdens and parental work constraints. Nancy Mead, general counsel to the Alaska court system, explained that although the default for such violations has been a court appearance, the courts often use bail schedules and online payment options so physical appearance is not always required. After discussion and removal of objections, Amendment 2 was adopted by the committee.

Representative Stout’s Amendment 3 would have exempted active‑duty military under age 21 from the bill’s fine section. Stout framed the proposal around fairness for 19‑ and 20‑year‑old service members; opponents, including Representative Hammond and other members, raised equal‑protection and policy concerns and stressed that T21 targets sale and distribution more than use. The committee rejected Amendment 3 on a roll vote of 4 yeas to 7 nays.

The committee unanimously adopted Amendment 4, introduced by staff to clarify that synthetic nicotine products (examples cited in testimony included pouch products such as ZYN) are included in the statute’s list of "other tobacco products," closing a statutory definition gap that had allowed lab‑manufactured nicotine pouches to avoid the wholesale tax.

Amendment 5, which would have removed an exception that allowed mail‑order cigar and pipe‑tobacco sellers to operate without a state license, was discussed at length. Ken Alper (staff to Representative Josephson) argued removing the exemption would improve tax compliance and level the playing field for Alaska retailers; Tim Lampkin said the exception reflected an earlier negotiation with the Senate and advised against changing course. Representative Josephson withdrew Amendment 5.

A major portion of the evening’s debate centered on Amendment 9, a proposed wholesale excise structure (a 45% wholesale tax in the sponsor’s draft) that would shift collection to distributors and wholesalers and add licensing and reporting requirements for electronic smoking products. Proponents argued the wholesale model aligns with existing tobacco excise administration; opponents and committee staff warned wholesale levies are easier to evade given the heterogeneous and evolving vape market and urged a retail point‑of‑sale approach. Tim Lampkin cited a parity retail estimate of about 23.65% as a comparable retail‑level benchmark; some members urged parity with the existing wholesale tobacco rate (75%), and several hybrid conceptual amendments were discussed but not finalized. No final vote on Amendment 9 occurred before adjournment.

Co‑chair Foster closed the session at 8:43 p.m., saying the committee would reconvene at 9 a.m. the next day to resume work on Amendment 9 and then take up SB211 (the boards and commissions sunset/extension bill). Other bills listed for future consideration included SB79 (payroll cards), SB174 (species), and SB167 (PFD eligibility).

Votes at a glance: Amendment 1 adopted (roll: 10–1); Amendment 2 adopted (voice/consensus); Amendment 3 failed (4–7); Amendment 4 adopted (no objection); Amendment 5 withdrawn.