Coalition pushes back on Hochul’s proposed 75% wholesale tax on alternative nicotine products

Key Takeaways

• Hochul FY2027 proposal: a 75% wholesale tax on alternative nicotine products (e.g., Zyn, Velo)
• Enforcement measures: mandatory vaporizer product registry; $4.7 million for storage/disposal of seized contraband; new $0.55 distributor fee on vapes
• Opposition: convenience stores, business groups, and retired law enforcement say the tax would expand illicit trade and hurt low-income residents
• Support: public health advocates say taxes can curb addiction; budget officials project $57 million per year by 2030, with $50 million annually directed to the Health Care Reform Act fund starting in 2028
• New York State Tobacco Control Program data cited: youth nicotine pouch use rose from 1.5% (2018) to 3% (2024)

2Firsts, Feb 28, 2026 – 

According to cnyhomepage, a coalition of business owners and former law enforcement officers protested Gov. Kathy Hochul’s proposed 75% tax on alternative nicotine products, arguing the price hike would fuel organized crime and harm poor New Yorkers. Proponents, the report said, maintained the tax would curb addiction while funding hospitals.

In the report’s video, former New York City sheriff Edgar Domenech (Edgar Domenech) described the tobacco black market and claimed more than 50% of cigarettes in New York come from organized smuggling rings, saying, “Don’t tax the problem.”

The report said Hochul’s Fiscal Year 2027 budget proposal broadens a category of tobacco products to include alternative nicotine items such as Zyn and Velo and applies a 75% wholesale tax. To address illicit sales, the executive budget also proposes a mandatory registry for vaporizer products, earmarks $4.7 million for storing and disposing of seized contraband, and adds a new $0.55 distributor fee on vapes.

The New York Association of Convenience Stores (NYACS), the Business Council of New York State, and retired law enforcement held a press conference at the State Capitol on Thursday to oppose a new tax, even if it is below 75%, the report said. They argued the tax would eliminate an affordable alternative to smoking for people trying to quit. NYACS President Alison Ritchie (Alison Ritchie) said it punishes compliant small businesses and drives commerce out of the state, and said authorities should enforce existing laws against unlicensed smoke shops instead of taxing legal retailers.

Retired State Police Officer Elliot Boyce (Elliot Boyce) said the law would create a black market for nicotine pouches, bringing violence and unneeded police interactions into Black and Latino neighborhoods, according to the report. Rev. Damon Cabbagestalk (Damon Cabbagestalk) said the tax would burden struggling, low-income New Yorkers and their families instead of tobacco companies. Business Council Executive Vice President Paul Zuber (Paul Zuber) said the tax would disproportionately affect lower-income, less-educated New Yorkers and cited figures stating people making under $120,000 a year are 2.8 times likelier to smoke than those making $150,000, and those without a high school education are four times likelier than college graduates.

The report said public health experts held a lobby day on Wednesday to urge lawmakers to back tobacco prevention, arguing nicotine pouches increase the likelihood of youth nicotine addiction. It cited the New York State Tobacco Control Program saying youth nicotine pouch use doubled from 1.5% in 2018 to 3% in 2024.

The governor’s office said the tax would shield young people from nicotine addiction, the report said. Budget officials estimated it would generate $57 million per year for the state by 2030, and Hochul’s proposal would direct $50 million of that annual revenue to the Health Care Reform Act fund to pay for medical treatments starting in 2028. The report also said the Department of Health previously calculated a $15 return on investment for every dollar spent on tobacco control.

Image source: news10