R Street Testimony in Opposition to WA SB 6129, Concerning the Taxation of Cigarettes, Vapor Products, and Other Products Containing Tobacco or Nicotine

Testimony from:
Jeffrey S. Smith, Resident Senior Fellow, Healthier Communities, R Street Institute

In OPPOSITION to Senate Bill 6129, “Concerning the Taxation of Cigarettes, Vapor Products, and Other Products Containing Tobacco or Nicotine.”

March 4, 2026

House Committee on Finance

Chair Berg and Committees Members,

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 SB 6129. 

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 and supported national efforts in 2019 to raise the age to 21 to purchase such products. Additionally, R Street is also 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, including electronic nicotine delivery systems (ENDS).

I write in opposition to this legislation, which proposes to replace the various tax rates currently imposed on tobacco and nicotine products with a single rate of 95 percent of the taxable sales price for all products containing nicotine, except cigarettes, while simultaneously raising the cigarette tax to $5 per pack.[1] While the bill’s stated objectives of funding public health programs and reducing youth nicotine use are commendable, the mechanism chosen to achieve them, a flat, high-rate tax applied uniformly across products with vastly different risk profiles, is fundamentally at odds with the scientific evidence on tobacco harm reduction.

The Continuum of Risk: Not All Nicotine Products Are Equal

The harm caused by tobacco use is overwhelmingly attributable to combustion, not nicotine. Cigarette smoke contains more than 7,000 chemicals, including at least 70 known carcinogens.[2] Products that deliver nicotine without combustion occupy fundamentally different positions on the risk spectrum. As pioneering researcher Michael Russell observed, “People smoke for nicotine but they die from the tar”.[3]

In 2017, then-FDA Commissioner Scott Gottlieb formally articulated a regulatory framework built around the “continuum of risk” for nicotine-delivering products, with combustible cigarettes at the most harmful end and medicinal nicotine therapies at the least harmful.[4] This framework remains central to federal tobacco policy. It recognizes that while nicotine sustains addiction, the disease burden from smoking is caused by prolonged inhalation of combustion by products, and that products removing combustion from the equation carry substantially lower risk.

Multiple authoritative scientific reviews confirm this hierarchy of risk:

• Public Health England (PHE) concluded, based on an expert independent evidence review, that e-cigarettes are approximately 95 percent less harmful than combustible cigarettes.[5] PHE has reaffirmed this estimate in subsequent reviews.
• The Royal College of Physicians (RCP) found that the hazard to health arising from long-term vapor product use is unlikely to exceed five percent of the harm from smoking tobacco and concluded that harm reduction “has huge potential to prevent death and disability from tobacco use.”[6]
• The National Academies of Sciences, Engineering, and Medicine (NASEM) found “conclusive evidence that completely substituting e-cigarettes for combustible tobacco cigarettes reduces users’ exposure to numerous toxicants and carcinogens” and that “across a range of studies and outcomes, e-cigarettes pose less risk to an individual than combustible tobacco cigarettes.”[7]
• The Cochrane Collaboration, the gold standard for systematic reviews in medicine, found “high certainty evidence” that nicotine e-cigarettes are more effective for smoking cessation than traditional nicotine replacement therapies such as patches and gums, with quit rates approximately 59 percent higher among e-cigarette users.[8]

Most recently, in January 2025 the FDA authorized 20 ZYN nicotine pouch products through the premarket tobacco product application pathway, concluding that these products are “appropriate for the protection of public health” because they contain “substantially lower amounts of harmful constituents than cigarettes and most smokeless tobacco products” and “pose lower risk of cancer and other serious health conditions.”[9] The FDA’s toxicology review further concluded that adults who smoke and switch completely to ZYN are “expected to experience reduced risk of cancer, respiratory toxicity, and cardiovascular toxicity.”[10] In June 2025, the FDA accepted modified risk tobacco product applications for these same products for substantive scientific review.[11]

S.B. 6129 ignores all of this evidence. By imposing the same 95 percent tax on vapor products, nicotine pouches, and all other non-cigarette nicotine products, the bill treats FDA-authorized, scientifically validated reduced-risk products the same as, or in some cases more harshly than, the combustible cigarettes that kill approximately 480,000 Americans annually.

The Evidence Against Flat Taxation of Nicotine Products

Peer-reviewed economic research consistently demonstrates that taxing reduced-risk products at or near cigarette-level rates produces perverse public health outcomes by driving consumers back to combustible cigarettes.

Minnesota’s experience provides the most rigorously studied example. In 2010, Minnesota became the first state to tax e-cigarettes, initially at 35 percent of wholesale price, then raising the rate to 95 percent in 2013, the same rate S.B. 6129 proposes for Washington. Using Current Population Survey data from 1992 to 2015 in a synthetic control difference-in-differences design, the researchers found that the Minnesota tax increased adult smoking and reduced smoking cessation relative to control states.[12] They estimated that approximately 32,400 additional adults would have quit smoking in Minnesota had the tax not been imposed. The authors projected that imposing a similar tax nationally could deter approximately 2.75 million smokers from quitting over a decade. An additional study corroborated these findings using data from the Behavioral Risk Factor Surveillance System and the National Health Interview Surveys, finding symmetrical cross-price effects: higher e-cigarette taxes reduced vaping and increased smoking. Their estimates implied that for every e-cigarette pod eliminated by an e-cigarette tax, approximately 1.9 additional packs of cigarettes are sold.[13]

These findings carry direct implications for Washington. The state’s current cigarette tax stands at $3.025 per pack. Under S.B. 6129, this would rise to $5.00 per pack, while all other nicotine products would face a 95 percent tax on taxable sales price. A nicotine product that retails at $7.00 before excise taxes would, according to KOMO News reporting on the law already partially in effect, cost approximately $15.06 after state excise and sales taxes are applied.[14] This price signal does not distinguish between a product that is 95 percent less harmful than a cigarette and the cigarette itself.

The Case for Risk-Proportionate Taxation

Leading economists and public health scholars have called for an alternative approach: taxing nicotine products in proportion to their demonstrated risk. In the New England Journal of Medicine, researchers argued that “national, state, and local policymakers should consider an approach that differentially taxes nicotine products in order to maximize incentives for tobacco users to switch from the most harmful products to the least harmful ones.” They noted that the tax code already implicitly recognizes differential risk by exempting FDA-approved nicotine replacement therapies from excise taxation.[15]

An experimental study published in the International Journal of Environmental Research and Public Health directly compared flat (“tobacco parity”) taxation with risk-proportionate (“harm reduction”) taxation using a controlled marketplace design. The findings were clear: total nicotine purchased did not differ significantly between the two approaches, meaning differential taxation did not increase overall nicotine consumption. However, the harm reduction approach “resulted in greater substitution of the medium tax tier products,” primarily e-cigarettes and smokeless tobacco, while the flat tax approach failed to produce significant substitution to these less harmful alternatives. The authors concluded that “differential taxation in proportion to product risk would be an effective way to incentivize smokers to switch from smoked to low-risk, unsmoked types of tobacco.”[16]

A practical tiered framework might take the following form:

• Combustible cigarettes: Full tax rate (highest tier)
• Traditional smokeless tobacco (moist snuff, chewing tobacco): 25 percent to 50 percent of the combustible rate
• Vapor products and modern oral nicotine (e.g., nicotine pouches): 10 percent or less of the combustible rate
• FDA-approved cessation therapies: Tax exempt (as currently practiced)

This approach preserves the revenue-generating function of tobacco taxation while encoding a clear incentive structure aligned with scientific evidence. It communicates to consumers that the state recognizes the vast differences in risk between product categories, rather than sending the misleading signal that a nicotine pouch authorized by the FDA as “appropriate for the protection of public health” is equivalent to a combustible cigarette.[17]

I respectfully urge the House Committee on Finance to reject the flat 95 percent tax rate on non-cigarette nicotine products and instead adopt a tiered, risk-proportionate framework that preserves incentives for adult smokers to switch to less harmful alternatives. Tax policy should be guided by science, not by the assumption that all nicotine is the same. The millions of Americans searching for a way out of smoking should not be penalized by a tax code that treats their escape route the same as the thing that is killing them. Washington could lead with a smarter, evidence-based approach to nicotine taxation that both generates revenue and saves lives. I urge you to seize it.

Thank you,

Jeffrey S. Smith, PhD
Resident Senior Fellow, Healthier Communities
R Street Institute
jsmith@rstreet.org

[1] Washington State Legislature. (2026). Engrossed Substitute Senate Bill 6129: An act relating to the taxation of cigarettes, vapor products, and other products containing tobacco or nicotine. https://app2.leg.wa.gov/billsummary?BillNumber=6129&Year=2026

[2] U.S. Food and Drug Administration. (2020, May). Chemicals in tobacco products and your health. https://www.fda.gov/tobacco-products/health-effects-tobacco-use/chemicals-tobacco-products-and-your-health

[3] Abrams, D. B., Glasser, A. M., Pearson, J. L., Villanti, A. C., Collins, L. K., & Niaura, R. S. (2018). Harm minimization and tobacco control: Reframing societal views of nicotine use to rapidly save lives. Annual Review of Public Health, 39, 14.1–14.21. https://doi.org/10.1146/annurev-publhealth-040617-013849

[4] Gottlieb, S. (2017, June 28). Protecting American families: A comprehensive approach to nicotine and tobacco [Speech]. U.S. Food and Drug Administration. https://www.fda.gov/news-events/speeches-fda-officials/protecting-american-families-comprehensive-approach-nicotine-and-tobacco-06282017

[5] McNeill, A., Brose, L. S., Calder, R., Hitchman, S. C., Hajek, P., & McRobbie, H. (2015). E-cigarettes: An evidence update. Public Health England. https://www.gov.uk/government/news/e-cigarettes-around-95-less-harmful-than-tobacco-estimates-landmark-review

[6] Royal College of Physicians. (2016). Nicotine without smoke: Tobacco harm reduction. RCP. https://www.rcp.ac.uk/improving-care/resources/nicotine-without-smoke-tobacco-harm-reduction/

[7] National Academies of Sciences, Engineering, and Medicine. (2018). Public health consequences of e-cigarettes. The National Academies Press. https://doi.org/10.17226/24952

[8] Hartmann-Boyce, J., Lindson, N., Butler, A. R., McRobbie, H., Bullen, C., Begh, R., Theodoulou, A., Notley, C., Rigotti, N. A., Turner, T., Fanshawe, T. R., & Hajek, P. (2024). Electronic cigarettes for smoking cessation. Cochrane Database of Systematic Reviews, 1, Article CD010216. https://doi.org/10.1002/14651858.CD010216.pub8

[9] U.S. Food and Drug Administration. (2025a, January 16). FDA authorizes marketing of 20 ZYN nicotine pouch products after extensive scientific review [Press release]. https://www.fda.gov/news-events/press-announcements/fda-authorizes-marketing-20-zyn-nicotine-pouch-products-after-extensive-scientific-review

[10] U.S. Food and Drug Administration. (2025b). ZYN PMTA TPL review. https://www.fda.gov/media/190684/download

[11] U.S. Food and Drug Administration. (2025c, June 17). Modified risk applications for ZYN nicotine pouches now under FDA scientific review. https://www.fda.gov/tobacco-products/ctp-newsroom/modified-risk-applications-zyn-nicotine-pouches-now-under-fda-scientific-review

[12] Dave, D., Dench, D., Grossman, M., & Saffer, H. (2020). E-cigarettes and adult smoking: Evidence from Minnesota. Journal of Risk and Uncertainty, 60(3), 207–228. https://doi.org/10.1007/s11166-020-09326-5

[13] Pesko, M. F., Courtemanche, C. J., & Maclean, J. C. (2020). The effects of traditional cigarette and e-cigarette taxes on adult tobacco product use. Journal of Risk and Uncertainty, 60(3), 229–258. https://doi.org/10.1007/s11166-020-09330-9

[14] KOMO News. (2025, December 23). These are the new laws now in effect in Washington state in 2026. https://komonews.com/news/local/new-laws-taking-effect-washington-state-in-2026

[15] Chaloupka, F. J., Sweanor, D., & Warner, K. E. (2015). Differential taxes for differential risks: Toward reduced harm from nicotine-yielding products. New England Journal of Medicine, 373(7), 594–597. https://doi.org/10.1056/NEJMp1505710

[16] Crespi, E., Hardesty, J. J., Nauduri, D., Tidey, J. W., Cobb, C. O., & Cassidy, R. N. (2021). Estimating the impact of tobacco parity and harm reduction tax proposals on demand and substitution in cigarette smokers. International Journal of Environmental Research and Public Health, 18(15), Article 7880. https://doi.org/10.3390/ijerph18157880

[17] U.S. Food and Drug Administration. (2025a, January 16). FDA authorizes marketing of 20 ZYN nicotine pouch products after extensive scientific review [Press release]. https://www.fda.gov/news-events/press-announcements/fda-authorizes-marketing-20-zyn-nicotine-pouch-products-after-extensive-scientific-review