AN ACT TO AMEND TITLE 30 OF THE DELAWARE CODE RELATING TO TOBACCO PRODUCT TAXATION AND LICENSING.

Legislation Document

SPONSOR:

Rep. Minor-Brown & Sen. Sokola & Rep. Harris & Rep. Osienski & Sen. Townsend & Sen. Lockman & Rep. Heffernan

Rep. Bolden

HOUSE OF REPRESENTATIVES

153rd GENERAL ASSEMBLY

HOUSE BILL NO. 215

AN ACT TO AMEND TITLE 30 OF THE DELAWARE CODE RELATING TO TOBACCO PRODUCT TAXATION AND LICENSING.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE (Three-fifths of all members elected to each house thereof concurring therein):

Section 1. Amend § 5301, Title 30 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows and redesignating accordingly:

§ 5301. Definitions.

As used in this chapter:

(8) “Marijuana” means as defined in § 4701 of Title 16.

(15)

a.

“Tobacco products” means all products

made primarily

containing, made of, or derived from

tobacco

or nicotine

for individual consumption, including

cigarettes, cigars, pipe tobacco, and vapor products.

all of the following:

1. Cigarettes.

2. Cigars.

3. Pipe tobacco.

4. Vapor products.

5. Nicotine pouches.

b. “Tobacco products” does not include any of the following:

1. A product or substance that contains marijuana, whether or not the substance also contains nicotine.

2. A product regulated as a drug or therapeutic device by the United States Food and Drug Administration under Chapter V of the Federal Food, Drug, and Cosmetic Act.

Section 2. Amend § 5305, Title 30 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:

§ 5305. Levy of tax, limitation; exemption [For application of this section, see 81 Del. Laws, c. 55, § 28(a)]

(a) An excise tax is imposed and assessed upon the sale or use of cigarettes within this State at the rate of

105 mills

180 mills

per cigarette. This tax applies only once to the same pack of cigarettes. In the event the tax computed according to this subsection results in a tax per pack or other unit of sale to which this tax applies involving a fraction of a cent, the tax applicable to that pack or other unit must be computed by rounding the tax to the next higher whole cent.

(b) A tax is imposed and assessed upon the sale or use of all tobacco products, except those tobacco products taxed under subsection (a) or (c) of this section, within this State at the rate of

30%

45%

of the wholesale price on such products.

(c) (1) A tax is imposed and assessed upon the sale or use of moist snuff within this State at the rate of

92 cents

$1.23

per ounce and a proportionate tax at the like rate on any fractional parts of an ounce. The per ounce tax imposed under this subsection must be computed based on the net weight as listed by the manufacturer.

(2) An excise tax is imposed and assessed upon the sale or use of vapor products within this State at the rate of

5 cents

25 cents

per fluid milliliter of vapor product. The tax imposed by this paragraph (c)(2) of this section must be computed based on the amount of vapor product in milliliters as listed by the manufacturer. All invoices for vapor products issued by a manufacturer must state the amount of vapor product in milliliters.

Section 3. Amend § 5308, Title 30 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:

§ 5308. License charges.

(a)

Wholesale license. —

For each wholesale license issued there must be paid to the Department of Finance a fee of

$200.

$400.

If a holder of a wholesale license sells or intends to sell tobacco products at 2 or more places of business, whether established or temporary, a separate license is required for each place of business.

(b)

Retail license. —

For each retail license there must be paid to the Department of Finance a fee of

$50.

$100.

If a holder of a retail license sells or intends to sell tobacco products at 2 or more places of business, whether established or temporary, or whether in the same building or not, a separate license is required for each place of business.

(c)

Vending machine license. —

Every vending machine from which tobacco products are offered for sale must have affixed to it an identification stamp issued by the Department of Finance for which a fee of

$15

$30

must be paid to the Department. If 2 or more vending machines are fastened together, each set of mechanisms must have a separate vending machine license.

(d)

Affixing agent license. —

For each affixing agent’s license issued there must be paid to the Department of Finance a fee of

$200,

$400,

but only 1 license fee of

$200

$400

is required of any person who is both a wholesale dealer and an affixing agent.

Section 4. Amend § 5312, Title 30 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:

§ 5312. Replacement of licenses.

Whenever any license issued under this chapter is defaced, destroyed, or lost, the Department of Finance may issue a duplicate to the holder of the defaced, destroyed, or lost license upon the payment of a fee of

$10

$20

by the holder.

Section 5. Effective Dates.

(a)(1) Sections 1 and 2 of this Act takes effect on September 1, 2025, and establish the rate of tax payable on tobacco products.

(2)a. The tax imposed under subsection (a)(1) of this Section must be imposed on all of the following:

1. Stocks or inventories of cigarettes or tobacco products in possession of any person liable for the tax as of midnight August 31, 2025, which as of that date have been affixed with any tobacco product tax stamp or other indicia of payment of the tax.

2. Any tobacco product stamps purchased, but not yet affixed before midnight August 31, 2025.

b. The amount of tax due under this subsection is equal to the tax determined at the rates specified in Section 2 of this Act, less the tax previously paid with respect to such tobacco products. The amount of tax due under this subsection must be paid by December 31, 2025.

(b) Sections 3 and 4 of this Act take effect on January 1, 2026.

SYNOPSIS

Section 1 of this Act changes the definition of “tobacco product” to include all products intended for consumption that contain, are made from, or derived from tobacco or nicotine. Nicotine pouches are specifically enumerated as a product included in this definition. Products or substances that contain marijuana are specifically excluded from the tobacco products definition, since those items will be subject to taxation under Chapter 13 of Title 4. Also excluded are products regulated as a drug or therapeutic device by the United States Food and Drug Administration under Chapter V of the Federal Food, Drug, and Cosmetic Act.

Section 2 of the Act raises tobacco product tax rates as follows: (1) The tax on cigarettes is raised from $2.10 per 20 pack of cigarettes to $3.60 per 20 pack of cigarettes; (2) Tax on vapor products raised from 5 cents to 25 cents; (3) Tax on moist snuff raised from 92 cents per ounce to $1.23 per ounce and the tax rate for all other tobacco products is raised from 30% of the wholesale price to 45% of the wholesale price.

Sections 3 and 4 raise the fee for licenses under this chapter.

The increased tax rates take effect on September 1, 2025. A floor tax, due by December 31, 2025 is due on products that are stocked but not yet sold as of the effective date, in an amount equal to the difference between tax already paid at the old rate and the new rate of tax. The increased license fees take effect on January 1, 2026.