Vermont’s excise, or “sin,” taxes are among the highest in the country, targeting cigarettes, alcohol, and newer products like non-tobacco nicotine pouches. While these taxes aim to curb usage of harmful products and fund public health initiatives, they often create unintended consequences. One glaring inconsistency is how Vermont treats nicotine pouches compared to nicotine gum—two products that are virtually identical in function yet taxed vastly differently due to bureaucratic classifications. This discrepancy not only raises questions about fairness but also undermines efforts to reduce tobacco use in the state.
The Heavy Hand of Vermont’s Sin Taxes
Vermont imposes a 92% wholesale tax on “other tobacco products”, categorizing nicotine pouches alongside smokeless tobacco and vaping products. Meanwhile, nicotine gum—a product designed to deliver nicotine in a safer form, just like pouches—is exempt from such excise taxes, being classified as a medical aid. This results in a paradox: the state penalizes a harm-reduction tool like nicotine pouches while leaving gum untaxed, despite both offering the same alternative to smoking.
Adding to this issue, Vermont also prohibits the online sale of non-tobacco nicotine pouches. This restriction creates additional barriers to accessibility, especially for those in rural areas or individuals who prefer the convenience of online shopping. By making nicotine pouches harder to obtain, the state further disincentivizes their use as a safer alternative to smoking.
Cigarettes, the most harmful nicotine product, are taxed at $3.08 per pack in Vermont, contributing significantly to state revenue. The argument for high cigarette taxes is clear—they discourage smoking and offset public health costs. But when it comes to nicotine pouches, which are free of tobacco and far less harmful than cigarettes, the logic falls apart. Instead of incentivizing smokers to switch to safer alternatives, Vermont’s tax policy makes pouches prohibitively expensive.
The Importance of TSNAs
One of the key health metrics in nicotine products is the presence of tobacco-specific nitrosamines (TSNAs)—carcinogenic compounds found in tobacco. Cigarettes and smokeless tobacco products like snuff and chewing tobacco contain high levels of TSNAs due to the tobacco curing process. In contrast, nicotine pouches are either TSNA-free or contain negligible amounts, comparable to FDA-approved nicotine gum. Both gum and pouches eliminate the primary source of harm associated with tobacco products: combustion.
Yet, despite their chemical similarities, pouches are taxed as though they pose the same risks as smokeless tobacco. This ignores the science that shows nicotine pouches are far safer than traditional tobacco products.
Lessons from Europe
European countries, particularly Sweden, provide a compelling case for how nicotine pouches can reduce tobacco use. Sweden has long embraced snus, a smokeless tobacco product with low TSNA levels, and more recently, nicotine pouches. The result? Sweden boasts some of the lowest smoking rates in the world, with tobacco-related illnesses significantly reduced. Other countries like Norway and the United Kingdom have also encouraged the use of nicotine pouches and vaping as harm-reduction tools, seeing similar declines in smoking rates.
By contrast, Vermont’s punitive tax policy and its prohibition on online sales discourage smokers from transitioning to less harmful alternatives. Rather than following Europe’s lead in promoting nicotine pouches as a safer choice, Vermont treats them as part of the problem, not the solution.
A Call for Change
A Call for Change
If Vermont is serious about reducing tobacco use, it needs to rethink its tax policy on nicotine pouches. The state should stop treating pouches as a tobacco product and instead tax them as it would nicotine gum—at a much lower or even negligible rate. Doing so would encourage more smokers to make the switch, contributing to public health goals without sacrificing revenue, as cigarette use continues to decline.
Countries like the UK have embraced harm reduction by actively promoting lower-risk nicotine products while maintaining high taxes on cigarettes and other combustible tobacco. Vermont could adopt a similar approach, aligning its tax policy with science and harm-reduction principles. By making nicotine pouches more affordable and accessible, including allowing online sales, the state would empower smokers to quit tobacco altogether, ultimately reducing the burden of smoking-related diseases.
In conclusion, Vermont’s attack on nicotine pouches is counterproductive. These products, like gum, represent a pathway to a healthier population. A tax structure that reflects their reduced harm could make a real difference in helping people quit smoking for good. It’s time for Vermont to embrace a smarter, fairer approach to nicotine taxation—one that prioritizes public health over punitive revenue measures.
Dave Soulia | FYIVT
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