HB 337 Would Double Utah’s Cigarette Tax While Targeting Safer Alternatives

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Key Points:

• Legislative Overview: House Bill 337 would more than double Utah’s cigarette tax while restructuring taxes on moist snuff and alternative nicotine products, significantly increasing costs on both combustible and non-combustible products.

• Cigarette Tax Hike: The bill replaces Utah’s tiered weight-based system with a flat $0.185 per cigarette tax – raising the per-pack tax from $1.70 to $3.70, a $2.00 increase per pack.

• Automatic Escalator: HB 337 requires Utah’s cigarette tax to automatically increase if the federal cigarette tax is reduced.

• Smokeless & Alternative Nicotine Shift: The bill eliminates the $1.83-per-ounce tax on moist snuff and replaces it with an 86 percent wholesale tax. Alternative nicotine products – including nicotine pouches and dissolvables – would also face a new 86 percent wholesale tax, up from $1.83 per ounce.

• E-Cigarette Tax Maintained: Utah’s existing 56 percent wholesale tax on electronic cigarettes remains in place.

• Adult Smoking at Record Lows: In 2024, 146,489 Utah adults were current smokers – the lowest rate ever recorded and a 5 percent decline from 2023.

• Severe Income Disparities: Smoking remains concentrated among lower-income Utahns. In 2024, 13.6 percent of adults earning $25,000 or less smoked, compared to 2.9 percent of adults earning $50,000 or more – making low-income adults 4.7 times more likely to smoke.

• Severe Education Disparities: Among adults without a high school diploma, 15.3 percent smoked, compared to just 1.6 percent of college graduates – a nearly tenfold difference.

• Vaping Surpasses Smoking: In 2024, 177,389 Utah adults (6.9 percent) were current vapers – 30,340 more adults vaping than smoking. Since 2016, smoking declined 35.2 percent while vaping increased 35.3 percent.

• Harm Reduction at Risk: The FDA has authorized nicotine pouch products after determining they contain substantially lower harmful constituents than cigarettes and pose lower cancer risk. HB 337 applies steep wholesale taxes to these alternatives.

• Youth Trends at Historic Lows: In 2023, only 1.1 percent of Utah high school students were current smokers. Youth vaping declined 41.2 percent between 2019 and 2023.

• Revenue vs. Prevention: In 2024, Utah collected approximately $139 million in tobacco taxes but allocated only $15.4 million (11 percent) to prevention and cessation – about $0.11 per dollar collected.

• Equity Concerns: Because smoking and nicotine use are disproportionately concentrated among lower-income and less-educated adults, doubling cigarette taxes and sharply increasing wholesale taxes will fall hardest on Utah’s most vulnerable residents.

• Bottom Line: With smoking and youth use already at historic lows, HB 337 imposes regressive tax increases while raising costs on reduced-risk alternatives. Rather than expanding tax burdens, Utah policymakers should prioritize equitable strategies that sustain smoking declines and preserve incentives for harm reduction.

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Utah lawmakers are seeking to increase the state excise tax on combustible cigarettes while replacing existing weight-based taxes on moist snuff and alternative nicotine products with a percentage-based wholesale tax. Tobacco taxes are inherently regressive, disproportionately impacting lower-income and less-educated individuals. Excessive taxation on tobacco harm reduction products may also reduce their appeal to adults who smoke and are seeking less harmful alternatives.

House Bill 337 would replace the existing tiered weight-based cigarette tax structure with a standardized flat rate of $0.185 per cigarette. For a pack of 20 cigarettes, this increases the tax from $1.70 per pack to $3.70 per pack. The bill also requires that Utah’s cigarette tax automatically increase if the federal cigarette tax is reduced. Revenues are deposited into the Cigarette Tax Restricted Account, which funds tobacco prevention and cessation programs, research at the Huntsman Cancer Institute, and medical education at the University of Utah.

HB 337 would eliminate the current $1.83-per-ounce tax on moist snuff and instead apply an 86 percent wholesale tax on the manufacturer’s sales price, aligning it with how most other tobacco products are taxed. The legislation maintains the existing 56 percent wholesale tax on electronic cigarettes, including e-liquids and prefilled devices.

Additionally, HB 337 would impose an 86 percent wholesale tax on alternative nicotine products, defined as products containing nicotine intended for human consumption that are not cigarettes, tobacco products, or electronic cigarette products. This category includes nicotine pouches, dissolvable products, and other non-combusted, non-vaporized nicotine items. Currently, these products are taxed at $1.83 per ounce.

The proposed cigarette tax increase is deeply regressive. Smoking rates remain significantly higher among lower-income and less-educated Utahns, meaning these individuals will bear the greatest burden. According to the CDC’s 2024 Behavioral Risk Factor Surveillance System, approximately 146,489 Utah adults were current smokers – the lowest rate ever recorded and a 5 percent decline from 2023, representing 3,779 fewer adults smoking.

Disparities are pronounced. In 2024, 13.6 percent of Utah adults earning $25,000 or less were current smokers, compared to 2.9 percent of those earning $50,000 or more – making low-income adults 4.7 times more likely to smoke. Among adults without a high school diploma, 15.3 percent smoked, compared to just 1.6 percent of college graduates – nearly a tenfold difference.

Meanwhile, vaping has surpassed smoking in Utah. In 2024, an estimated 177,389 adults – 6.9 percent of the population – were current e-cigarette users, representing 30,340 more adults vaping than smoking. Between 2016 and 2024, smoking declined by 35.2 percent, while vaping increased by 35.3 percent – strongly correlated trends.

By imposing steep taxes on alternative nicotine products, HB 337 risks undermining products that federal regulators have determined to be appropriate for the protection of public health. In 2025, the FDA authorized the sale of 20 Zyn nicotine pouch products in multiple flavors, including citrus and coffee. In issuing its order, the agency concluded that the products contain “substantially lower amounts of harmful constituents than cigarettes and most smokeless tobacco products … [and] pose lower risk of cancer and other serious health conditions.” The FDA further found that use of the products resulted in a “substantial proportion of adults” who had “completely switched.” Similarly, a 2025 Cochrane Review found limited but promising evidence that oral nicotine products reduce users’ exposure to harmful constituents and may help adults quit smoking, though not as effectively as e-cigarettes.

Youth tobacco use in Utah remains at record lows. In 2023, just 1.1 percent of high school students reported current cigarette use. Youth vaping has also declined significantly, with current use falling 41.2 percent between 2019 and 2023.

It is also important to consider how Utah allocates existing tobacco tax revenues. In 2024, the state collected approximately $139 million in tobacco excise taxes but allocated only $15.4 million in state funding to tobacco prevention and cessation programs – roughly 11 percent of total collections. For every $1 Utah collected in tobacco taxes, only $0.11 was directed toward programs aimed at reducing youth use and helping adults quit. Before imposing additional tax increases on Utahns – particularly those already disproportionately burdened – policymakers should evaluate whether existing revenues are being optimally invested in prevention and cessation efforts.

With smoking and youth tobacco use at historic lows, further increasing combustible cigarette taxes is unlikely to meaningfully accelerate declines but will disproportionately impact vulnerable populations. At the same time, applying steep wholesale taxes to reduced-risk alternatives risks discouraging adult smokers from switching. Utah policymakers should pursue policies that sustain downward smoking trends, better allocate existing revenues, and preserve incentives for harm reduction rather than expanding regressive tax burdens.

Nothing in this analysis is intended to influence the passage of legislation, and it does not necessarily represent the views of Tobacco Harm Reduction 101.