IowaIowa sets taxes on nicotine products and vapor liquids
Starting January 1, 2027, distributors and users owe taxes on covered nicotine and vapor products, with some tax revenue set aside for children’s hospital research.
What it does
Distributors pay five cents per container of up to 20 alternative nicotine product units, and five cents per milliliter of liquid containing nicotine or a similar substance. Users or people storing untaxed products owe the same tax.
The state board of regents receives the first $3 million in these taxes each year for the university’s children’s hospital. The board reports on funded programs, patients served, and available results.
Argument forThe hospital funding could help researchers study childhood cancer and give patients access to clinical therapies.
Argument againstThe per-unit taxes could raise costs for people who buy nicotine products or vape liquids containing nicotine or a similar substance.
More detail
Distributors pay a tax on covered products; users or people storing them pay the same tax if it has not already been paid. Alternative nicotine products deliver nicotine or a similar substance and are not tobacco, vapor products, or FDA-regulated drugs or devices. The tax on vapor products applies to liquid containing nicotine or a similar substance; the law also covers devices and related products that produce vapor. The tax does not apply when federal law bars Iowa from taxing a product. A product taxed once under this law is not taxed again under it. The law takes effect January 1, 2027. Distributors owe the tax when they bring products into Iowa for sale, make them in Iowa for sale, or ship them to Iowa retailers.
The state board of regents receives the first $3 million in these product tax revenues each fiscal year for the children’s hospital. The funding goes to the State Board of Regents for the State University of Iowa Stead Family Children’s Hospital. The money supports pediatric cancer research, access to clinical therapies, and physician-scientist leadership at the hospital. The appropriation starts with the fiscal year beginning July 1, 2027. The board must report to the legislature by December 1, 2028, and each December 1 after that.
Where do you stand?
Choose your position
Tell your reps
Take a position to see your representatives and ways to contact them.
Where it stands
- Introduced
- Passed 1st Chamber
- Passed 2nd Chamber
- To Governor
- Became Law
Looking ahead
No hearings or votes scheduled.
History
- 2026
- May 26Signed by Governor Kim Reynolds.Became Law
- May 19Fiscal note.
- May 18Reported correctly enrolled, signed by President and Speaker, and sent to Governor.To Governor
- May 2Message from House.
- Vote recorded Shall the bill pass? Result: pass.Lower
- Vote recorded Shall amendment H-8467 be adopted? Result: fail.Lower
- May 2Immediate message.
- May 2Explanation of vote.
- May 2Passed House, yeas 67, nays 18.Passed 2nd Chamber
- May 2Explanation of vote.
- May 2Amendment H-8468, yeas 28, nays 57, filed, lost.
- May 2Explanation of vote.
- May 2Amendment H-8467, yeas 30, nays 55, filed, lost.
- May 2Unanimous consent for immediate consideration.
- May 2Placed on Appropriations calendar.
- May 2Committee vote: Yeas, 20. Nays, 1. Excused, 4.
- May 2Committee report, recommending passage.Minor
- May 1Subcommittee recommends passage.Minor
- Apr 30Subcommittee Meeting: 05/01/2026 10:00AM RM 304.
- Apr 30Subcommittee: Weldon, Johnson, R. and Wood.
- Apr 29Pursuant to Rule 31.7, referred to Appropriations.
- Apr 28Committee vote: Yeas, 20. Nays, 4. Excused, 1.
- Apr 28Committee report, recommending passage.Minor
- Apr 27Subcommittee recommends passage.Minor
- Apr 23Fiscal note.
- Apr 23Subcommittee Meeting: 04/27/2026 12:30PM RM 304.
- Apr 23Subcommittee: Siegrist, Wessel-Kroeschell and Young.
- Apr 22Read first time, referred to Ways and Means.Minor
- Vote recorded Shall the bill pass? Result: pass.Upper
- Apr 22Message from Senate.
- Apr 22Immediate message.
- Apr 22Passed Senate, yeas 44, nays 0.Passed 1st Chamber
- Apr 22Amendment S-5201 adopted.Major
- Apr 21Amendment S-5201 filed.Minor
- Apr 20Fiscal note.
- Apr 15Committee report, recommending passage.Minor
- Apr 14Subcommittee recommends passage.Minor
- Apr 13Subcommittee Meeting: 04/14/2026 12:00PM Senate Lounge.
- Apr 13Subcommittee: Driscoll, Koelker, and Petersen.
- Apr 13Referred to Ways and Means.Minor
- Apr 9Committee report, approving bill.Minor
- Apr 9Introduced, placed on Appropriations calendar.Introduced
Taxes & BudgetHealthcare