Senator Caballero’s new law creates fiscal parity with cigarettes and vapes
published on October 6, 2021 – 12:59 PM
Written by Business Journal staff
A new tobacco tax law will restore revenue to the education sector.
Senator Anna Caballero (D-Salinas) announced that her bill, SB 395, has been passed by the legislature and signed by Governor Gavin Newsom and will come into force on July 1, 2022.
The bill, Healthy Outcomes and Prevention Education Act (HOPE Act) aims to create tax parity on tobacco on vaping products, as they have become increasingly popular among young people despite adverse health effects, according to a press release.
The bill was introduced in February and signed by Newsom on October 4.
Part of the bill imposes a tax on cigarette distributors at $ 2.87 per pack of 20 cigarettes. Distributors will also be taxed based on the wholesale price of cigarettes – the combined rate charged on cigarettes plus the additional rate of $ 0.50 per pack of 20.
Tobacco tax revenues will fund education programs to combat tobacco use. It will also offer scholarships to students from underserved communities who pursue smoking prevention training.
“This bill will provide revenue to support essential public health programs and initiatives to fight the tobacco epidemic while reducing the number of new tobacco users entering the market each year. With Governor Newsom’s signing, California will put retail tobacco taxes against big tobacco predatory tactics that target our LGBTQ + community and the various communities we belong to, ”said Dr Shannon Kozlovich, program manager Equality California.
The bill will also provide a permanent source of funding to the UC Merced / UCSF partnership for medical programs in the Central Valley, where health services are limited.
“I want to thank Governor Newsom for signing legislation that will improve the health outcomes of our young people. Despite the risks, vaping is more and more obvious and is particularly popular among our young people. This is a problem made worse by the availability of appealing flavors such as gummy bears and cotton candy. Intensive marketing has contributed to this trend plaguing our communities, and if left unchecked it will continue to do harm for generations to come, ”Caballero said. “This is why I drafted Senate Bill 395, which proposes closer tax parity between the sale of vape and traditional tobacco products. Studies show that it helps reduce consumption, while generating income to educate and fight smoking.
Dr. Peter Bretan Jr., president of the California Medical Association, called it essential piece of legislation to advance public health, as tax parity would deter future tobacco users. Taxation is the way to reduce the consumption of tobacco products, he said.
“SB 395 is a powerful measure to prevent vaping and youth addiction now and for our next generation that we are proud to support,” said Melissa Stafford Jones, Executive Director of the First 5 Association of California.