Tag: Alaska

  • Juul Labs, Altria Vape Suit in Alaska Ends in Mistrial

    Juul Labs, Altria Vape Suit in Alaska Ends in Mistrial

    Credit: Wirestock

    A mistrial was ruled last week in a lawsuit filed by Alaska against Juul Labs, Inc. and the Altria Group, Inc., for what the state alleged was the company’s role in causing an increased use of e-cigarettes by youth.

    In a statement, Alaska Attorney General Treg Taylor said that his office was “disappointed” to see the case end in a mistrial due to a procedural error.

    “This does not reflect the merits of the case,” Taylor said. “We are still evaluating our options, including pursuing another trial.”

    In a follow-up question, Alaska’s News Source asked the State’s Department of Law to elaborate on the details of the procedural error, asking specifically if it was a matter of jury tampering.

    The Attorney General responded in a statement by saying:

    “The Attorney General’s office appreciates and thanks the members of the jury who devoted nearly seven weeks to carefully considering the evidence in this case. While the case ended in a mistrial for procedural reasons, the facts have not changed,” Taylor said. “Youth vaping continues to present a grave threat to the health of our kids. Companies that design and market products that are harmful to our children will be held to account. That was true before this trial began, and it remains true today.”

    In a statement from Juul Labs, External Affairs Vice President Stefanie Miller accused Alaska of having one of the highest smoking rates in the country while it continues to attack an “American company” that provides alternatives to combustible cigarettes.

    “We are hopeful that the hard work of the court and the jury will be taken into consideration before more of the State’s resources are devoted to matters almost 10 years old and, instead, will be directed to address the true threat to Alaskans: the flood of illegal and untested Chinese vaping products that target Alaska’s youth,” the statement said.

  • Alaska Begins Jury Trial Against Juul Labs, Altria

    Alaska Begins Jury Trial Against Juul Labs, Altria

    Credit: Mehaniq41

    A jury trial commenced last week for a lawsuit filed by the State of Alaska against Juul Labs, Inc. and Altria Group, Inc. The state alleges that these companies played a significant role in the rising use of e-cigarettes among young people.

    In a press release dated November 24, 2020, former acting Attorney General Ed Sniffen stated that the state alleges Juul Labs employed marketing strategies similar to those used by large tobacco companies but updated for the digital age. This included youth-oriented social media campaigns and the use of paid influencers.

    The suit further alleges that Altria then conspired with Juul Labs to maintain and expand the youth e-cigarette market JUUL had created, working to cover up Juul Labs’ youth marketing just as major tobacco companies tried to cover up their own youth-targeted marketing in the past, according to media reports.

    “According to the 2019 Alaska Youth Risk Behavior Survey, 45.8% of Alaska high school students have tried e-cigarettes, with 26.1% reporting e-cigarette use,” the press release states. “This is a significant increase from 2017, when 15.7% of Alaska high school students reported using e-cigarettes. Alaska’s Complaint alleges that this dramatic rise is a direct result of the marketing strategies used by JUUL and Altria to target teenagers and youth.”

    The state’s complaint alleges Juul Labs and Altria violated the law in four ways:

    • Creating a public nuisance under Alaska law;
    • Violating Alaska’s Unfair Trade Practices and Consumer Protection Act in marketing and promoting e-cigarettes to youth;
    • Negligently developing, marketing, and selling JUUL vaping products;
    • Conspiring to maintain and grow a market based on sales to youth.

    The lawsuit is seeking damages to fund public health efforts to address youth vaping as well as an abatement of what the state is calling a “public nuisance.”

    Alaska is far from the only state to file a suit against the e-cigarette giants; in 2021, Juul Labs agreed to pay $40 million to North Carolina in the first state lawsuit settlement.

  • Alaska Senate Again Sends Tobacco 21 Bill to House

    Alaska Senate Again Sends Tobacco 21 Bill to House

    Credit: Yossarian6

    Last week, the Alaska Senate voted 14-6 in favor of S.B. 89, a bill that would change the state’s minimum age to purchase and possess vaping and other tobacco products from 19 to 21 years old.

    If approved, the bill would align Alaska’s state law with the federal standard.

    ​​The bill also would impose a statewide tax of 25 percent on e-cigarettes. A similar bill was vetoed by Gov. Dun Mike Dunleavy last fall.

    The 25 percent statewide tax would add to Alaska municipal nicotine taxes already in place, such as Juneau, which currently taxes 45 percent, or $3 a pack, on the wholesale price of tobacco products, according to City and Borough of Juneau Finance Director Jeff Rogers.

    The action would also allow local law enforcement to enforce the federal Tobacco 21 standard and ensure the state doesn’t lose out on grants and other funds it can receive for having its tobacco laws in line with the federal standard, reports Charlie Minato with Halfwheel.

    S.B. 89 would make it illegal for anyone to sell or give tobacco or vaping products to anyone under the age of 21 years old. Those caught selling or giving tobacco or vaping products to someone under the age of 21 would be subject to a fine of at least $300.

    The bill would also introduce fines for those under the age of 21 years old caught possessing tobacco or vaping products. They would be subject to a fine of no more than $150 and could be subject to a tobacco education program.

    In December 2019, President Donald Trump signed a large federal spending bill that also included a provision increasing the minimum age to purchase tobacco products from 18 to 21 years old at the federal level.

    While the federal law already exists, its enforcement is restricted to those who sell tobacco products and not the consumers. The vast majority of U.S. states have updated their laws to make them consistent with the federal standard.

    S.B. 89 now moves onto the Alaska House of Representatives.

    Last year, Alaska’s governor vetoed a Tobacco 21 bill because it included a 35 percent tax increase on vaping products.

  • Alaska’s Senate President Reintroduces Vape Tax Bill

    Alaska’s Senate President Reintroduces Vape Tax Bill

    Credit: Casimiro

    Last year, Alaska’s Gov. Mike Dunleavy vetoed his first bill in office, S.B. 45, which would have increased the minimum age to purchase tobacco products from 19 to 21 years old, bringing it in line with the federal Tobacco 21 standard that was passed in late 2019.

    Dunleavy didn’t state whether he supported the minimum purchasing age increase, but the bill would have also introduced a tax of 35 percent of the wholesale price on vaping and e-cigarette products and new taxes were not on the governor’s agenda.

    “There were many conversations about what an appropriate level to tax would be, but ultimately a tax increase on the people of Alaska is not something I can support,” Dunleavy wrote in his veto letter to Senate President Peter Micciche.

    The sponsor of SB 45 has now introduced a new bill that would do much of the same as the 2022 bill, writes Charlie Minato with Halfwheel. 

    Alaska Sen. Gary Stevens, has introduced SB 89 alongside Micciche, which would change a number of laws regarding the sale of tobacco and vaping products in Alaska, including:

    • Increasing the minimum age to purchase tobacco, nicotine or vaping products from 19- to 21-year-olds.
    • Introducing fines of up to $300 for anyone under the age of 21 years olds caught in possession of tobacco, nicotine or vaping products.
    • Banning the internet sale of tobacco, nicotine and vaping products except under certain conditions.
    • Introducing a tax on vaping products of 25 percent of the wholesale price.

    Regarding the internet sales ban, there is an exception made if the sale is “by a retailer who sells primarily cigarettes, cigars, tobacco, products containing tobacco, electronic smoking products, or products containing nicotine and who restricts access to the premises to only those individuals who are 21 years of age or older.”

    There are some exceptions. For example, certain vaping products sold at military facilities would not be subject to the new tax on vapor products. That said, the bill also contains language that could make it illegal for a person to ship tobacco products to someone else in Alaska.

    The bill’s text seems to indicate that at least one of the parties involved in the shipment—the shipper or the recipient—likely needs to have a tobacco license or meet other special circumstances, if not, the shipment would be deemed illegal.

  • Alaska Governor Vetoes Vape Purchasing Age Increase

    Alaska Governor Vetoes Vape Purchasing Age Increase

    Credit: Eyegelb

    Alaska Gov. Mike Dunleavy vetoed SB 45, a bill that would have raised the minimum age to purchase e-cigarettes and other tobacco products in the state from 19-years-old to 21-years-old. The move would have brought the state in line with federal minimum age requirements.

    The governor vetoes the bill because it also included the implementation of a tax on e-cigarettes and other vaping products.

    The bill sought to create parity in the excise tax rate on electronic smoking products, which are currently not subject to state-level taxes as they are not considered either cigarettes or other tobacco products (OTP).

    The bill would have subjected electronic smoking products to a tax rate of 35 percent of the wholesale price, which would still be less than the state’s rate of 75 percent of the wholesale price on other tobacco products.

    “Governor Dunleavy’s decision to veto this bill is a huge relief to Alaskans who rely on vaping products to stay away from deadly combustible cigarettes. Rejecting the tax hike will also make it easier for those who currently smoke to achieve cessation using vapor products, said Tim Andrews, director of Consumer Issues for Americans for Tax Reform. “Governor Dunleavy’s veto was necessary and highly appropriate. As a proud signer of the ATR Taxpayer Protection Pledge, Governor Dunleavy has made a commitment to his constituents to oppose all tax increases. This veto is proof of his dedication to the taxpayers of Alaska and we applaud this pro-science, pro-taxpayer decision.”

    Dunleavy did not say whether or not he supported the age increase, but noted that it is not possible to separate out components of a bill once it has been passed by the legislature.

    “There were many conversations about what an appropriate level to tax would be, but ultimately a tax increase on the people of Alaska is not something I can support,” Dunleavy wrote in his veto letter to Senate President Peter Micciche.

    Since the governor vetoed the bill after the adjournment of the legislature’s second regular session, the veto will not be addressed unless a special session is called before the next legislative session convenes, according to Halfwheel.

  • Alaska Lawmakers Pass Tobacco 21 Bill, E-Cig Tax

    Alaska Lawmakers Pass Tobacco 21 Bill, E-Cig Tax

    Credit: Eyegelb

    The Alaska Legislature gave its approval to SB 45, a bill that raises the minimum age to purchase, sell, exchange, or possess electronic nicotine-delivery system (ENDS) products to 21-years-old, as well as makes changes to the tax rate on electronic smoking products.

    The bill includes an imposed tax rate of 35 percent of the wholesale price for ENDS products, a notable difference from the state’s tax rate for other tobacco products, which is 75 percent of the wholesale price.

    If signed into law, it would bring the state into alignment with the federal minimum age. As such, it allows state and local law enforcement agencies to enforce the federal minimum age, including fining retailers or others for selling or otherwise providing tobacco products to a person under 21-years-old, according to Halfwheel.

    It also amends the state’s minimum age to possess ENDS and other tobacco products to 19-years-old. Violators of that law will be subject to a fine of up to $150.

    For retailers, they will now be required to only allow tobacco products to be sold by employees who are at least 21-years-old, unless they were at least 19-years-old at the time the bill goes into effect.

    The bill now heads to Gov. Mike Dunleavy for his signature. If the governor does not veto the bill, the changes will go into effect on July 1, 2023.

  • Vape Tax, Tobacco 21 Clears Alaska Senate, Heads to House

    Vape Tax, Tobacco 21 Clears Alaska Senate, Heads to House

    Credit: Yossarian6

    The Alaska Senate on Wednesday evening passed a bill that would raise the legal age to buy and sell vaping and other tobacco products from 19 to 21. It would also impose the first statewide tax on vaping.

    If the bill passes through the Alaska House of Representatives, e-cigarettes or vapes would be taxed at 45 percent of their wholesale price, according to Alaska’s News Source. The Senate passed SB 45 on a 15-4 vote. All four of the “no” votes were by Republicans.

    There would be some exceptions under the new bill if it becomes law. Alaskans who are 19 and older who currently sell tobacco products would be grandfathered into the new age limits. Tobacco cessation devices that are approved by the Food and Drug Administration would not incur the new tax rate for e-cigarettes.

    SB 45 also toughens up age-verification requirements for sellers of tobacco while cutting the fine on violations for underage smokers from a maximum of $500 to $300.

    In 2019, former President Donald Trump signed a bill into law that raised the federal age to consume tobacco products to 21. Alaska is currently one of 12 states that have not made the same shift in state law.

    The legislative session must end by May 18.

  • Alaska’s 75% Wholesale Tax Would Harm Health

    Alaska’s 75% Wholesale Tax Would Harm Health

    A new proposal that would introduce a 75 percent wholesale tax on vapor products in Alaska could make switching from combustible tobacco products very expensive for smokers. If enacted, HB 110 (SB 45) would tax nicotine vapor products (including components) at a rate comparable to the rate on other tobacco products and cigarettes.

    Credit: Eyegelb

    Such a steep tax would markedly increase vapor products retail prices, which could limit the number of smokers that switch, according to Ulrik Boesen of the Tax Foundation. “While excise taxes on both cigarettes and vapor products can be a legitimate way to recoup some societal costs associated with nicotine consumption, it is hard to justify equal tax treatment between vapor products and combustible tobacco,” Boesen writes. “Worse than the disproportionate tax rate is the substitution that is likely to result in increased smoking as a result of the tax—a net negative for public health in Alaska. One recent study funded by the National Institutes of Health found that increasing taxes on vapor products would increase the number of smokers.”

    Boesen recommends that lawmakers avoid price-based taxes. He says that for states seeking to recoup some societal costs associated with combustible cigarette consumption, taxes should be based on the e-liquid quantity. “Whether a device is expensive or cheap really does not matter for any harm resulting from use,” he writes. “For vapor products, the obvious choice is taxing the liquid by volume (that is, per ml). Such a design would actually target the harmful behavior and avoids taxing devices and components.”

    In a statement accompanying the legislation, the bill sponsor, Rep. Sara Hannan (D), mentions youth use as the main reason for introducing the bill. While youth use of any nicotine product is a major issue, there has been marked improvements in tackling youth use in the last few years. In her statement, Rep. Hannan refers to Centers for Disease Control (CDC) data from 2018 where 21 percent of high schoolers reported vaping at least once in the last 30 days. In newer data from 2021, 11 percent reported use at least once in the past 30 days, and only 3 percent reported daily use.

  • Alaska Legislators try Again to Tax Vapor Same as Tobacco

    Alaska Legislators try Again to Tax Vapor Same as Tobacco

    Legislators in the U.S. state of Alaska are trying again this year to tax “electronic smoking products” the same as tobacco products. Bills to extend the state’s tobacco tax to electronic smoking products died last March as lawmakers rushed to close down the session amid the start of the pandemic. However, two lawmakers are trying again this year.

    alaska state house
    Credit: David Mark

    The bills, sponsored by Kodiak Sen. Gary Stevens and Juneau Rep. Sara Hannan, have each cleared their first committee and are both waiting for a hearing in their respective Finance Committee before either could move to the full body for a vote.

    Alaska has no statewide tax on vapor products, although the state taxes smokeless tobacco at 75 percent of wholesale. Cigarettes are taxed at $2 a pack. HB 110 would enact a 75 percent wholesale tax on e-liquids, vaping devices, and components (HB 110 is the House version of SB 45).

  • Anchorage, Alaska Passes 55% Wholesale Vapor Tax

    Anchorage, Alaska Passes 55% Wholesale Vapor Tax

    The Anchorage Assembly last week passed an ordinance to include vaping and electronic cigarette products under the city’s existing tobacco tax. This means tobacco vaping devices and e-cigarettes, as well as the liquids and cartridges that are used with the devices will be taxed at 55 percent of the wholesale price.

    According to an article on alaskapublic.org, Assemblywoman Suzanne LaFrance and Assemblyman Christopher Constant proposed the ordinance to combat vaping among minors, which has seen a sharp rise in recent years.

    Some vape shop owners opposed the ordinance, arguing that vaping products are helpful for adult smokers trying to kick their habit.

    “Imposing this tax on something that is actually helping people get away from combustible cigarettes and actually costing the state and local resources less money seems a little problematic,” said Shaun D’Sylva, a co-owner of Fatboy Vapors in Midtown.

    Traditional cigarette smoking has been declining for decades, in part because of public information campaigns, smoke-free laws and increasing tobacco taxes, said Marge Stoneking, executive director of the American Lung Association in Alaska. Alaskan public officials also have often been accused of spreading misinformation about vaping products, according to industry experts.

    “Now e-cigarettes are addicting a new generation of youth, threatening all of that progress,” Stoneking said. “Significantly increasing taxes on tobacco products results in fewer kids starting to smoke and more adults quitting while at the same time providing revenue to the municipality.”