AN ACT TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY AMENDING SECTION 12-21-620, RELATING TO TAX RATES ON PRODUCTS CONTAINING TOBACCO, SO AS TO PROVIDE FOR A TAX ON CIGARETTES FOR HEATING AND CERTAIN VAPOR PRODUCTS AND ELECTRONIC CIGARETTES.
Summary
H4303 amends South Carolina’s tobacco excise tax statute to add a specific tax rate for “cigarettes for heating.” Under the bill, cigarettes for smoking remain taxed at 3.5 mills per cigarette, while cigarettes for heating would be taxed at 14.25 mills per cigarette. The bill also retains the existing 5% tax on other tobacco products based on the manufacturer’s price.
The measure updates the statutory definition of “cigarette” to expressly include products used for smoking or heating under ordinary conditions of use, and it keeps the existing anti-avoidance language that captures products likely to be sold or purchased as cigarettes based on appearance, packaging, pricing, marketing, or labeling. The act takes effect October 1, 2025.
Impact
The bill directly amends Section 12-21-620 of the South Carolina Code, changing the state’s tobacco tax structure by imposing a distinct excise tax on heating cigarettes and clarifying that such products fall within the cigarette tax framework. This affects manufacturers, wholesalers, retailers, and consumers of heated tobacco products, and it may increase the cost of those products in South Carolina beginning October 1, 2025.
Sentiment
The available voting history suggests broad support for the bill, with the House passing it 92-6. No committee transcript is available, but the strong margin indicates the measure was generally viewed favorably by most members. The bill’s sponsorship by a bipartisan group of representatives also suggests cross-party agreement on the policy change.
Contention
The main point of contention is likely the taxation of heated tobacco products at a higher rate than standard cigarettes, which could be viewed by some as a public health measure and by others as a burden on a specific category of tobacco consumers and businesses. The bill also raises definitional issues by expanding the statutory treatment of cigarettes to include products used for heating, which may matter to manufacturers and sellers of alternative nicotine products. The small number of nays in the House indicates opposition existed but was limited.