Bill would set tobacco tax rates and fund youth prevention

The bill text sets a 40 percent tax on the wholesale price of covered tobacco products. The rate applies to covered products made or acquired in New Mexico for ordinary business distribution and to tobacco products consumed in the state. Cigars have a 25 percent rate capped at 50 cents per cigar. Little cigars are taxed at the cigarette rate. The bill text gives July 1, 2026 as its effective date.

The state would direct 35 percent of net tobacco tax receipts to a nicotine prevention and control fund. The Department of Health would administer the fund, working with the public education and higher education departments. The fund would support prevention programs and education for people ages 5 to 25, but spending depends on legislative appropriation. The bill text gives July 1, 2026 as its effective date.

The bill text defines tobacco products to include nicotine products, e-liquid, e-cigarettes and closed system cartridges. The definitions cover products made from or containing natural or synthetic nicotine that are intended for, or likely to be, human consumption. Products regulated as drugs or devices by the federal Food and Drug Administration are excluded. The bill text gives July 1, 2026 as its effective date.