New Jersey Seeks Higher Taxes on Smoke-Free Nicotine Alternatives

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Key Points:

• Legislative Overview: New Jersey Senate Bill 4012 would substantially increase taxes on other tobacco products and extend the tax to oral nicotine pouches, which are not currently subject to a state excise tax.

• Higher OTP Tax: The bill would raise New Jersey’s other tobacco products tax from 30 percent to 50 percent of the wholesale price, representing a 66.7 percent increase.

• Moist Snuff Tax Doubled: SB 4012 would increase the tax on moist snuff from $0.75 per ounce to $1.50 per ounce.

• Nicotine Pouches Newly Taxed: The legislation expands the statutory definition of tobacco products to explicitly include tobacco-free oral nicotine pouches containing nicotine.

• Floor Tax Requirement: Retailers would be required to pay the difference between the existing and new tax rates on inventory already in their possession when the law takes effect.

• Growing State Tax Trend: As of December 2025, 21 states imposed excise taxes on nicotine pouches, reflecting increasing state efforts to tax newer smoke-free nicotine products.

• Continuum of Risk: The FDA recognizes that nicotine products exist along a continuum of risk, with combustible cigarettes presenting the greatest danger and noncombustible oral products generally posing substantially lower risks.

• FDA-Authorized Products: In 2025, the FDA authorized 20 oral nicotine pouch products after determining that their marketing was appropriate for the protection of public health.

• Lower-Risk Findings: In authorizing the products, the FDA stated that they pose lower risks of cancer and other serious health conditions than combustible cigarettes.

• Modified-Risk Authorization: The FDA later granted the same ZYN products Modified Risk Tobacco Product orders, allowing the manufacturer to communicate that switching completely from cigarettes to ZYN reduces the risk of several smoking-related diseases.

• Policy Tension: Although SB 4012 specifically references products such as ZYN, the bill would impose substantially higher taxes on products the FDA has determined may benefit adults who smoke.

• Adult Smoking at Historic Lows: In 2024, only 8.6 percent of New Jersey adults smoked cigarettes – the lowest rate recorded in the state’s Behavioral Risk Factor Surveillance System data.

• Smoking Declines as Vaping Grows: Between 2016 and 2024, adult smoking in New Jersey declined by 38.6 percent, while adult vaping increased by 67.6 percent.

• Young Adult Smoking Plummets: Smoking among New Jersey adults aged 18 to 24 fell from 13.5 percent in 2016 to 3.9 percent in 2024, a 71.1 percent decline.

• Youth Use Remains Low: According to the 2025 National Youth Tobacco Survey, only 1.7 percent of U.S. middle and high school students currently used nicotine pouches, including 2.3 percent of high school students and 0.9 percent of middle school students.

• International Evidence: Sweden’s widespread use of smokeless oral products has coincided with one of Europe’s lowest smoking rates and comparatively low rates of smoking-related disease among men.

• Tax Policy Concerns: Taxing lower-risk nicotine products more like combustible cigarettes may weaken the financial incentive for adults who smoke to switch to less harmful alternatives.

• Policy Implications: As cigarette smoking continues to decline, New Jersey lawmakers should consider whether steep taxes on FDA-authorized smoke-free products are consistent with the state’s broader public health objectives.

• Bottom Line: SB 4012 would sharply increase taxes on other tobacco products and newly tax nicotine pouches despite FDA findings that authorized oral nicotine products pose lower risks than cigarettes. Policymakers should carefully weigh revenue goals against the potential public health benefits of encouraging adults who smoke to transition to lower-risk alternatives.

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Legislation in the Garden State would impose a steep excise tax on products the U.S. Food and Drug Administration (FDA) has found "appropriate for the protection of public health." New Jersey Senate Bill 4012 would increase the state's tax on other tobacco products (OTP) and apply that tax to oral nicotine pouches, which are not currently subject to an excise tobacco tax.

SB 4012 would increase the existing OTP tax by 66.7 percent, from 30 percent to 50 percent of the wholesale price, while doubling the tax on moist snuff from $0.75 per ounce to $1.50 per ounce. The bill also expands the definition of tobacco products to explicitly include oral nicotine pouches, defined as a "tobacco-free pouch intended for oral use that contains nicotine."

To prevent retailers from avoiding the higher tax, the legislation imposes a floor tax requiring businesses to pay the difference between the previous and new tax rates on inventory already in possession when the law takes effect.

Like many other states, New Jersey is considering taxing oral nicotine products. As of December 2025, 21 states imposed excise taxes on nicotine pouches.

Excise taxes are traditionally intended to discourage the use of products that pose significant health risks. The FDA, however, has long recognized that tobacco and nicotine products exist on a continuum of risk, with combustible cigarettes posing the greatest danger and smoke-free oral products – including nicotine pouches – among the least harmful.

In 2025, the FDA authorized the marketing of 20 oral nicotine pouches through its premarket tobacco product application (PMTA) pathway, including products available in cinnamon, coffee, and peppermint flavors. To receive authorization, manufacturers were required to demonstrate that marketing the products would be appropriate for the protection of public health by benefiting adults who smoke while accounting for the risks of youth uptake. Although PMTA authorization does not designate a product as "safe," the FDA stated that the authorized products "pose lower risk of cancer and other serious health conditions" than cigarettes.

More recently, the FDA granted those same products Modified Risk Tobacco Product (MRTP) orders, allowing the manufacturer to state that, "Using ZYN instead of cigarettes puts you at a lower risk of mouth cancer, heart disease, lung cancer, stroke, emphysema, and chronic bronchitis."

Notably, in the statement accompanying S4012, sponsor Senator Joseph Vitale (D-Middlesex) specifically notes that oral nicotine pouches "are commonly referred to by their brand name, such as ZYN." Yet the legislation would substantially increase taxes on products the FDA has determined can benefit adults who smoke and, in the case of ZYN, may be marketed with an authorized reduced-risk claim.

Vitale has long supported restrictions on tobacco harm reduction products. In 2016 legislation targeting flavored electronic cigarettes, the bill asserted that "flavored electronic cigarettes lead to increased tobacco use and addiction, higher health care costs, and a greater incidence of smoking-related illness and death," and that such products "pose a significant threat to the health of the general public."

Despite these concerns, smoking rates in New Jersey have continued to decline alongside the growth of smoke-free nicotine products.

In 2024, only 8.6 percent of New Jersey adults aged 18 years or older currently smoked cigarettes – the lowest rate recorded by the Centers for Disease Control and Prevention's Behavioral Risk Factor Surveillance System. This represents a 38.6 percent decline from 2016, when 14 percent of adults smoked. During the same period, adult vaping increased by 67.6 percent, from 3.7 percent to 6.2 percent.

The decline has been even greater among young adults. In 2024, only 3.9 percent of New Jersey adults aged 18 to 24 currently smoked, a 71.1 percent decrease from 13.5 percent in 2016.

Nor does current youth data suggest a growing nicotine epidemic. According to the 2025 National Youth Tobacco Survey, only 7.2 percent of U.S. middle and high school students reported current use of any tobacco product. This included 5.2 percent who used e-cigarettes, 1.7 percent who used nicotine pouches, 1.4 percent who smoked cigarettes, and 1.1 percent who smoked cigars. Current nicotine pouch use was reported by 2.3 percent of high school students and 0.9 percent of middle school students.

International experience also illustrates the potential role of smoke-free nicotine products in reducing cigarette smoking. Sweden, where smokeless oral products have been widely used for decades, reported a daily smoking rate of approximately 6 percent in 2021 – the lowest in Europe. Swedish men, who have the highest use of smokeless tobacco products, also experience among the continent's lowest rates of smoking-related diseases.

Rather than increasing taxes on FDA-authorized smoke-free alternatives, New Jersey lawmakers should consider whether treating lower-risk nicotine products more like combustible cigarettes aligns with the state's public health goals. As smoking continues to reach historic lows, policies that encourage adults who smoke to move away from combustible tobacco deserve careful consideration.

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.