R Street Letter to NY Governor Kathy Hochul regarding Opposition Executive Budget’s Proposed Tax on Nicotine Pouches

January 27, 2026

The Honorable Kathleen C. Hochul
Governor of New York
New York State Capitol Building
Albany, NY 12224

RE: Request to Reconsider Tax Increases on Nicotine Pouches

Governor Hochul:

My name is Jeff Smith, and I am a senior fellow on the Integrated Harm Reduction team at the R Street Institute. The R Street Institute is a nonprofit, nonpartisan public policy research organization. Our mission is to engage in policy research and outreach to promote free markets and limited, effective government in many areas, including harm reduction. Our efforts to promote tobacco harm reduction are why we are particularly interested in this proposed tax increase on nicotine pouches in the 2027 New York State Executive Budget. 

The R Street Institute has been a committed proponent of limiting the sale of nicotine-related products to those who are 21 years of age and older. We have supported national efforts to raise the age to 21 to purchase such products. Additionally, R Street is concerned with the health-related consequences of inhaling combustible cigarette smoke by adult consumers. We strongly support varied pathways for quitting smoking, which include access to a wide array of alternative, reduced-risk nicotine products: electronic nicotine delivery systems (ENDS), heated tobacco systems (HnB), and oral tobacco and oral nicotine products (Snus and Nicotine Pouches).

We respectfully urge you to reconsider the proposed tax increase on nicotine pouches outlined in your Fiscal Year 2027 Executive Budget proposal. This measure seeks to expand the definition of taxable tobacco products to include alternative nicotine products like pouches, subjecting them to a 75% excise tax similar to that on cigarettes and other tobacco items.[1] While we appreciate the administration’s focus on public health and revenue generation, we believe this policy overlooks the significant role that reduced-risk nicotine products, such as pouches, play in helping individuals transition away from combustible cigarettes, the most harmful form of nicotine consumption. Implementing a risk-proportionate taxation approach, where taxes are scaled based on the relative harm of products, would better align with scientific evidence and promote better health outcomes for New Yorkers.[2]

Snus and nicotine pouches are useful tools to combat the harms associated with smoking. Nicotine pouches, which are newer to the market, are growing in popularity among adult consumers. In 2021, 29.2% of adults who smoked had ever seen or heard of nicotine pouches, 5.6% had ever tried pouches, and 16.8% reported interest in using pouches in the next six months. Early research suggests that nicotine pouches curtail withdrawal symptoms and help smokers reduce or stop using combustible tobacco use—at rates similar to or better than FDA-approved nicotine replacement products (patches, gums, lozenges).[3] Also, when compared to other oral tobacco/nicotine products, nicotine pouches had lower levels of potentially harmful ingredients. In fact, these pouches are no different with respect to health risks when compared to FDA-approved nicotine replacement products.[4]

These products can contribute to improved public health among New York citizens by addressing the state’s ongoing tobacco-related challenges. Smoking remains a leading cause of preventable death in New York, contributing to heart disease, cancer, and respiratory issues that burden the healthcare system. By enabling smokers to switch to nicotine pouches, which deliver nicotine to curb withdrawal symptoms without the combustion-related toxins in cigarettes, we can reduce tobacco-related morbidity and mortality.[5] The FDA has found that pouches like ZYN can help alleviate cravings and withdrawal, potentially leading to lower smoking rates and associated healthcare costs for New Yorkers.[6] In a state where adult smoking prevalence hovers around 12-14%, promoting access to reduced-risk alternatives could prevent thousands of premature deaths annually and ease the strain on public health resources.[7]

In fact, the FDA Center for Tobacco Products (CTP) has granted marketing orders for nicotine pouches produced by Swedish Match (ZYN). The CTP stated in their announcement that these nicotine pouches are appropriate for the protection of public health, providing more benefits to the population’s health than risks.[8] They determined that these products were widely used by adult smokers to completely switch from cigarettes to nicotine pouches. The CTP also stated that there was little evidence that these products are of interest to those under the age of 21.

To edify the point, over the last thirty years, epidemiological evidence shows that Swedish men have one of the lowest smoking frequencies in the world thanks to former smokers’ uptake of snus.[9] Snus use has also substantially reduced deaths from tobacco-related cancers in Swedish men and has done so without increasing the prevalence of cigarette smoking among young people.[10] Research has shown that smokers can draw adequate nicotine from the pouches to overcome cravings for cigarettes.[11]

While the potential for increased youth use of these products is a valid concern, we believe that a more effective approach to curbing youth access is through enforcement of Tobacco 21 (T21), not taxation. Signed into law on December 20, 2019 as an amendment to the Federal Food, Drug, and Cosmetic Act, T21 made it illegal for anyone under 21 to purchase any tobacco or nicotine product and has significantly reduced underage use nationwide.[12] This law has been a primary driver of declining youth vaping rates.[13] Retailers—particularly gas stations and convenience stores—serve as the first line of defense, with decades of experience verifying age for age-restricted products such as alcohol, lottery tickets, and tobacco/nicotine products.

Importantly, youth use of nicotine pouches remains very low. According to the CDC’s annual National Youth Tobacco Survey, fewer than 1.8% of youth reported using these products.[14] These numbers have remained low and are likely to stay low due to stricter access laws (T21), enhanced enforcement measures, and significant penalties when retailers fail to enforce correctly.

A risk-proportionate taxation framework would incentivize switching behavior by taxing products based on their harm profile. Cigarettes are the riskiest nicotine delivery method due to their combustion and high levels of carcinogens. Therefore, they should indeed face high tax rates to discourage use. In contrast, low-risk products like nicotine pouches, which lack tobacco leaf and combustion, warrant taxation at or near zero to encourage adoption among smokers.[15] This approach aligns with recommendations from tobacco control experts, who argue that taxes should be proportional to the harms of each product type to support harm reduction efforts.[16] Equalizing taxes across all nicotine products, as proposed, undermines these goals by making safer alternatives less affordable and potentially driving users back to more dangerous cigarettes. Evidence from tobacco taxation literature supports that differentiated rates can effectively reduce overall harm while maintaining revenue streams from high-risk products.[17]

While the intent behind the proposed tax may be to protect public health, it risks hindering progress in tobacco harm reduction. We urge you to reconsider this measure in favor of a science-based, risk-proportionate policy that prioritizes the well-being of New York citizens.

Thank you for your time and consideration. I would welcome the opportunity to discuss this further.

Jeffrey S. Smith, PhD
Senior Fellow, Integrative Harm Reduction
R Street Institute
jsmith@rstreet.org

CC: Stacy Lynch, Chief of Staff, Office of Governor Kathleen Hochul

Bella Satra, Assistant Counsel, Office of Governor Kathleen Hochul

[1] New York State Executive Budget. (2026). Fiscal Year 2027 Executive Budget Proposal. https://www.budget.ny.gov/pubs/archive/fy27/exec/fy27pdf/fy27executivebudget.pdf

[2] Hartmann-Boyce, J., N. Lindson, A. R. Butler, H. McRobbie, C. Bullen, R. Begh, A. Theodoulou, et al. “Electronic Cigarettes for Smoking Cessation.” Cochrane Database of Systematic Reviews, no. 11 (2022).

[3] Lunell, Erik, Karl Fagerström, John Hughes, and Robert Pendrill. “Pharmacokinetic Comparison of a Novel Non-Tobacco-Based Nicotine Pouch (Zyn) with Conventional, Tobacco-Based Swedish Snus and American Moist Snuff.” Nicotine and Tobacco Research 22, no. 10 (2020): 1757-63. https://academic.oup.com/ntr/article-abstract/22/10/1757/5823724

[4] Azzopardi, David, Chuan Liu, and James Murphy. “Chemical Characterization of Tobacco-Free “Modern” Oral Nicotine Pouches and Their Position on the Toxicant and Risk Continuums.” Drug and chemical toxicology 45, no. 5 (2022): 2246-54. https://www.tandfonline.com/doi/abs/10.1080/01480545.2021.1925691

[5] Duan, Z., Wang, Y., Huang, J., Redmon, P. B., Eriksen, M. P., & Henriksen, L. (2024). The effects of oral nicotine pouches on cigarette smoking behavior and tobacco harm exposure: A randomized pilot trial in adults. PMC, Article PMC12377922. https://pmc.ncbi.nlm.nih.gov/articles/PMC12377922

[6] Scientific American. (2025). The health effects of FDA-authorized ZYN nicotine pouches. https://www.scientificamerican.com/article/the-health-effects-of-fda-authorized-zyn-nicotine-pouches

[7] Centers for Disease Control and Prevention. (2025). Nicotine pouches. https://www.cdc.gov/tobacco/nicotine-pouches/index.html

[8] FDA Center for Tobacco Products, “FDA Authorizes Marketing of 20 ZYN Nicotine Pouch Products after Extensive Scientific Review”,  https://www.fda.gov/news-events/press-announcements/fda-authorizes-marketing-20-zyn-nicotine-pouch-products-after-extensive-scientific-review

[9] The Public Health Agency of Sweden. Use of Tobacco and Nicotine Products. Living Conditions and Lifestyle: Alcohol, Narcotics, Doping, Tobacco and Nicotine Products, and Gambling, https://www.folkhalsomyndigheten.se/the-public-health-agency-of-sweden/living-conditions-and-lifestyle/andtg/tobacco/use-of-tobacco-and-nicotine-products/

[10] Daniel Roth, H, Adam B Roth, and Xiao Liu. “Health Risks of Smoking Compared to Swedish Snus.” Inhalation toxicology 17, no. 13 (2005): 741-48. https://www.tandfonline.com/doi/abs/10.1080/08958370500224698

[11] Stanfill, Stephen, Hang Tran, Robert Tyx, Carolina Fernandez, Wanzhe Zhu, Kristy Marynak, Brian King, et al. “Characterization of Total and Unprotonated (Free) Nicotine Content of Nicotine Pouch Products.” Nicotine and Tobacco Research 23, no. 9 (2021): 1590-96. https://academic.oup.com/ntr/article-abstract/23/9/1590/6285126

[12] U.S. Food & Drug Administration, “Tobacco 21”, https://www.fda.gov/tobacco-products/retail-sales-tobacco-products/tobacco-21

[13] CDC/FDA, National Youth Tobacco Survey, https://www.cdc.gov/mmwr/volumes/72/wr/mm7244a1.htm?s_cid=mm7244a1_w

[14] FDA-CTP, Results from the Annual National Youth Tobacco Survey, https://www.fda.gov/tobacco-products/youth-and-tobacco/results-annual-national-youth-tobacco-survey

[15] Stahr, G. (2023). Taxes on tobacco alternatives undermine harm reduction efforts. Reason Foundation. https://reason.org/backgrounder/taxes-on-tobacco-alternatives-undermine-harm-reduction-efforts

[16] Bate, R. (2026). Lives Saved by Authorizing Safer Nicotine Products: Mortality, Economic Benefits, and a Comparative-Risk Framework. Economic Benefits, and a Comparative-Risk Framework (January 04, 2026). https://papers.ssrn.com/sol3/papers.cfm?abstract_id=6014535

[17] Chaloupka, F. J., Yurekli, A., & Fong, G. T. (2012). Tobacco taxes as a tobacco control strategy. Tobacco Control, 21(2), 172-180. https://tobaccocontrol.bmj.com/content/21/2/172