Research & Commentary: New Hampshire Senate Proposes Bill to Lower Taxes on Vaping to Promote Cigarette Cessation

Published January 11, 2022

The New Hampshire Senate is considering Senate Bill 314, a bill that would reduce the tobacco tax for “modified risk tobacco products” as defined and regulated by the United States Department of Health and Human Services. According to 21 U.S. Code Section 387k, the term “modified risk tobacco product” means any tobacco product that is sold or distributed for use to reduce harm or the risk of tobacco-related disease associated with commercially marketed tobacco products.

This legislation would be a step in the right direction towards promoting cigarette cessation among New Hampshire constituents. Lower-income Americans have a greater tendency to spend a larger share of their disposable income on cigarettes, vaping, and tobacco products, which means that if SB 314 is passed, the reduction of taxes on modified risk tobacco products will positively affect lower-income citizens of the Granite State while encouraging them to transition from the more harmful traditional cigarette to a safer modified tobacco product.

Despite never-ending campaigns that supply false information and portray an incorrect narrative, e-cigarettes are significantly less harmful than combustible tobacco cigarettes. In 2015, Public Health England (PHE), a renowned public health agency, declared e-cigarettes are 95 percent less harmful than tobacco cigarettes. In 2018, PHE confirmed its 2015 finding, determining that “vaping is at least 95% safer than smoking.” 

Other public health groups, including the Royal College of Physicians; National Academies of Sciences, Engineering, and Medicine; and the American Cancer Society have also acknowledged the reduced harm of e-cigarettes.

Consequently, A Cato Journal article notes from 2010 to 2011, “smokers earning less than $30,000 per year spent 14.2 percent of their household income on cigarettes, compared to 4.3 percent for smokers earning between $30,000 and $59,999 and 2 percent for smokers earning more than $60,000.”

In light of these and many other studies, a reduction of taxes on modified risk tobacco products would encourage the use of tobacco harm reduction products, which would also translate into health care savings for New Hampshire.

Overall, New Hampshire spent $2,262,698,000 on Medicaid and $2,249,818,217 on Medicare in fiscal year 2021 according to the Kaiser Family Foundation. Tobacco consumers in all forms are both Medicaid and Medicare recipients. Therefore, if more citizens of New Hampshire were to transition from traditional cigarettes to modified tobacco products, the state would benefit likely save money on these traditionally expensive medical programs.

Alleviating tax burdens on the vaping and modified tobacco industry would have substantial effects that would benefit more than just those attempting to shake cigarettes in New Hampshire. These changes in the tax code would positively benefit the economic and employment environment in New Hampshire. According to the Vapor Technology Association, New Hampshire’s vaping industry provided more than $77 million in economic activity in 2018 while generating 360 direct vaping-related jobs. Sales of disposables and prefilled cartridges in New Hampshire exceeded $6.1 million in 2016.

Furthermore, the industry has created hundreds of subsidiary jobs in the Granite State, bringing the total economic impact in 2018 to $77,357,800.

As this bill progresses, New Hampshire lawmakers should consider the benefits to minimizing state taxes on modified tobacco products to maximize cigarette cessation efforts in the Granite State. Further, it is clear that there are employment and economic benefits to creating a modified tobacco product friendly environment in New Hampshire.

The following articles provide more information about sin taxes and tobacco harm reduction.


Tobacco Harm Reduction 101: New Hampshire

Heartland staff provide an analysis of the vaping industry in New Hampshire, including economic data, state health department findings on vaping-related lung illnesses, youth e-cigarette use, tobacco retail compliance checks, and state funding dedicated to tobacco control programs.

Research & Commentary: Top Ten Reasons Not to Raise Tobacco Taxes

In this Research & Commentary, Former Heartland Institute Government Relations Director John Nothdurft argues targeted tax increases serve only to push sound fiscal policies and real budget reforms to the public policy back burner. Northdurft argues legislators concerned about the public health effects of tobacco should encourage the use of readily available smoking cessation products and services instead of supporting bad tax policy.

Vaping, E-Cigarettes, and Public Policy Toward Alternatives to Smoking

For decades, lawmakers and regulators have used taxes, bans, and burdensome regulations as part of their attempt to reduce the negative health effects of smoking. Recently, some have sought to extend those policies to electronic cigarettes. This booklet from The Heartland Institute urges policymakers to re-think that tax-and-regulate strategy. The authors argue policymakers should be mindful of the extensive research that supports tobacco harm reduction and understand bans, excessive regulations, and high taxes on e-cigarettes often encourage smokers to continue using more-harmful traditional cigarette products.

Research & Commentary: Randomized Trial Finds E-Cigarettes Are a More Effective Smoking Cessation Tool than Nicotine Replacement Therapy–commentary-randomized-trial-finds-e-cigarettes-are-more-effective-smoking-cessation-tool-than-nicotine-replacement-therapy

In this Research & Commentary, Lindsey Stroud, a former Heartland state government relations manager, examines a study in The New England Journal of Medicine that shows e-cigarettes and vaping devices are twice as effective as nicotine replacement therapy (NRT) in helping smokers quit using tobacco cigarettes. Nearly 700 participants were studied during a 52-week period. Researchers found that 18 percent of e-cigarette users reported abstinence, compared to 9 percent of those using NRT. Stroud wrote that “these latest findings provide more valuable information on the public health role that e-cigarettes and vaping devices provide for the 38 million cigarette smokers in the United States,” and she implores policymakers to regulate these devices in a way that promotes, rather than prohibits, their use.


Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this and other topics, visit the Heartland Daily News website, The Heartland Institute’s website, our Consumer Freedom Lounge, and PolicyBot, Heartland’s free online research database.

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