Michigan Senator introduces bill to strengthen regulation of tobacco and nicotine products, amend tax law

Key Points:

·Bill Basics: The Michigan Senate introduced Bill 582, which aims to strengthen regulation of all tobacco and nicotine products and amend the Tobacco Products Tax Act of 1993.

·Regulatory Scope: The current law only covers cigarettes, cigars, smokeless tobacco, and pipe tobacco. The new proposal expands regulation to include alternative nicotine products, FDA-approved consumable materials, and FDA-approved e-cigarettes.

·Licensing Requirements Adjustments: Most licensing requirements for manufacturers, wholesalers, and retailers remain unchanged, but the net worth requirement for applicants will be increased from $25,000 to $50,000. Remote sellers will also be required to obtain an unclassified acquirer license.

·Tax Policy Changes: The current 32% wholesale price tax on tobacco products does not cover alternative products. The proposal extends this tax to these newly added alternative tobacco products, with the tax revenue distributed evenly between the Healthy Michigan Fund and the Medicaid Trust Fund. 

·Violation Penalties: The felony threshold has been raised from $250 to $500 in wholesale value; unauthorized e-cigarette sales are subject to a $100 fine per violation; online and remote sales require age verification, packaging must clearly indicate "tobacco product," and sales are restricted to licensed purchasers.

On September 28, 2025, according to our midland report on September 26, Senator Stephanie Chang of Michigan introduced Senate Bill 582, aimed at strengthening regulations on all tobacco and nicotine products, and planning to amend the 1993 Tobacco Products Tax Law.

Current laws mainly cover products such as cigarettes, cigars, smokeless tobacco, and pipe tobacco. However, according to the new proposal, the regulatory scope will expand to include alternative nicotine products (such as nicotine pouches), consumable materials approved by the U.S. FDA (such as e-cigarette liquid, pods), and FDA-approved e-cigarettes.

In terms of licensing, while most manufacturers, wholesalers, and retailers' licensing requirements remain unchanged, the net asset requirement for applicants will increase from $25,000 to $50,000. Remote sellers must also obtain a general purchaser license.

The tax legislation for the new product has also changed. Currently, a 32% wholesale price tax is levied on tobacco products, but this does not yet cover alternative products. The proposal will extend this 32% tax to new alternative tobacco products, with the revenue distributed evenly between the "Healthy Michigan Fund" and the "Medical Assistance Trust Fund.

The proposal suggests strengthening the management of prohibited items and internet sales in terms of penalties for violating the law. If the wholesale value reaches or exceeds $500, it will be considered a felony, a significant increase from the current threshold of $250. Unauthorized e-cigarette violations will face a $100 fine per offense. Additionally, the proposal also includes stricter regulations for online and remote sales: requiring age verification of purchasers, packaging must be labeled as "tobacco products," and remote sales are limited to licensed buyers.