Tennessee House Bill HB0987

Tennessee 2025-2026 Regular Session

• Introduced: 2/5/25
• Refer: 2/10/25

Caption

AN ACT to amend Tennessee Code Annotated, Title 67, Chapter 4, relative to heated tobacco products.

Summary

HB0987 amends Tennessee’s tobacco tax law to treat “heated tobacco products” as a type of cigarette for tax purposes. The bill defines a heated tobacco product as a tobacco product that creates an inhalable aerosol by heating tobacco without combustion, or by using heat from a combustion source that primarily heats rather than burns the tobacco. It also revises the statutory definition of “cigarette” to expressly include heated tobacco products, while continuing to exclude smokeless nicotine products. The bill then sets a separate tax rate for cigarettes that are heated tobacco products: 0.15 cents per cigarette, instead of the general cigarette tax rate of 3 cents per cigarette. The measure takes effect immediately upon becoming law, reflecting an intent to quickly update the tax code to address newer tobacco technologies and their treatment under Tennessee’s excise tax system.

Impact

HB0987 would amend Tennessee Code Annotated Title 67, Chapter 4 by expanding the cigarette definition and creating a distinct excise tax classification for heated tobacco products. It affects tobacco manufacturers, wholesalers, distributors, retailers, and the Department of Revenue by changing how these products are taxed and administered under the state’s cigarette tax stamp system. The bill does not appear to alter regulation of smokeless nicotine products, which remain excluded from the cigarette definition.

Sentiment

Based on the bill text and the absence of committee transcripts or recorded votes, the available record suggests a technical, policy-driven measure rather than a controversial one. The bill appears aimed at clarifying tax treatment for a newer tobacco category and aligning the tax code with product innovation. Because there is no discussion or voting history provided, no strong support or opposition can be inferred from the available materials.

Contention

The main potential point of contention is the policy choice to classify heated tobacco products as cigarettes for tax purposes while assigning them a much lower tax rate than conventional cigarettes. That could raise questions about tax equity, public health policy, and whether heated tobacco products should be treated more like traditional combustible tobacco or like a separate reduced-risk category. Another possible issue is the exclusion of smokeless nicotine products, which may prompt debate over how different nicotine and tobacco products should be categorized and taxed.