ASSEMBLY BUDGET COMMITTEE

STATEMENT TO

ASSEMBLY, No. 5805

STATE OF NEW JERSEY

DATED:  JUNE 26, 2025

      The Assembly Budget Committee reports favorably Assembly Bill No. 5805.

      As reported, this bill increases the rate of tax imposed on cigarettes, liquid nicotine, and container e-liquid, as recommended as part of the Governor’s Fiscal Year 2026 Budget, and dedicates a portion of the revenues collected from the tax on liquid nicotine and container e-liquid to the State’s Health Care Subsidy Fund.

      Under current law, the State imposes a tax on cigarettes at a rate of $0.135 per cigarette, or $2.70 per pack of 20 cigarettes, which tax rate has been in effect since 2009.  This bill would increase this tax rate to $0.15 per cigarette, or $3.00 per pack of 20 cigarettes.

      Also under current law, liquid nicotine is taxed at a rate of $0.10 per fluid milliliter on the volume of liquid as listed by the manufacturer.  Container e-liquid is taxed at the rate of 10 percent of the listed retail sale price for the product sold within the State.  This bill would increase the tax rate from $0.10 to $0.30 per fluid milliliter for liquid nicotine, and increase the tax rate on container e-liquid from 10 percent to 30 percent of the listed retail sale price.

      The bill’s provisions increasing the tax rates for cigarettes, liquid nicotine, and container e-liquid would take effect on August 1, 2025.

      The bill would also require inventory reports and the payment of higher rates of tax on the inventories of these products by distributors, wholesalers, and retail suppliers in the State for the time at which the tax rate increases go into effect.

      Lastly, the bill would dedicate $2 million of revenue collected from the taxes imposed on liquid nicotine and container e-liquid to the State’s Health Care Subsidy Fund.  Under current law, the fund, administered by the Department of Health, annually receives dedicated revenues from a portion of the revenues collected annually from the cigarette tax, as well as the tobacco products wholesale sales and use tax.  This bill would add a portion of the revenues collected from the taxes on liquid nicotine and container e-liquid as a dedicated revenue source for the fund.

FISCAL IMPACT:

      Fiscal information for this bill is currently unavailable.