Utah is known across the country for its disciplined approach to governing. The state keeps steady budgets, predictable tax policies, and a strong economy because lawmakers avoid making sudden changes.
House Bill 337, authored by Rep. Tyler Clancy, breaks from this tradition.
Clancy’s bill would double the state cigarette tax, change how other tobacco and nicotine products are taxed, remove Utah’s lower tax rate for some federally reviewed products, and increase spending that relies on the new revenue.
This is a big change. It would completely rewrite Utah’s tobacco and nicotine tax laws.
And it should not pass.
A Major Tax Increase in One Move
HB 337 would raise the cigarette tax to 17.25 cents per cigarette, or $3.45 per pack. This is about double the current rate.
Excise taxes might seem like an easy political choice because they target specific products, but they are still taxes. Doubling one in a single session is a big increase in the government’s tax burden on a legal product that adults buy.
Utah has usually avoided large tax hikes. Stability is one of the state’s strengths. Sudden, big increases, especially on products already taxed heavily, should have a strong justification.
This bill does not.
Big excise tax increases also lead to predictable economic reactions. Consumers adjust by buying across state lines, looking for cheaper options, or sometimes turning to unregulated sources on the black market. Furthermore, these taxes hit lower-income adults the hardest, especially those struggling with addiction.
These facts do not change, even if the policy is well-intentioned.
Tobacco and Nicotine Are Different
There is another important issue to consider: tobacco and nicotine are not the same.
Burning tobacco in a cigarette produces tar and thousands of chemicals that cause smoking-related diseases. The main danger comes from combustion.
Nicotine is addictive, but it is not the main cancer-causing substance in cigarettes. Most of the health harm comes from burning tobacco.
This difference is important when making tax policy.
HB 337 eliminates Utah’s existing reduced tax rate for Modified Risk Tobacco Products—products that the FDA has reviewed and authorized to be marketed as presenting reduced risk compared to traditional combustible cigarettes.
Under current Utah law, that difference is recognized in the tax code. But under this proposal, it would be erased.
For tax purposes, combustible cigarettes and federally recognized reduced-risk products would be treated the same.
If policymakers believe risk matters and want to improve health outcomes, the tax code should reflect real differences in risk. Treating all products the same ignores science and removes incentives for smokers who want to switch from combustible products.
That approach is not precise. It is blunt.
A Sweeping Restructuring
HB 337 would also change the tax on moist snuff and alternative nicotine products from a weight-based tax to an 86% tax on the manufacturer’s sales price. Electronic cigarette substances and related nicotine products would still have a 56% price-based tax.
These are major structural changes. Switching to high percentage-of-price taxes makes prices more volatile and gives people more reason to substitute or avoid these products. It also makes compliance and enforcement more complicated.
All of these changes come with new spending promises that rely on nicotine tax collections, including funding for more law enforcement jobs.
Excise tax revenue can rise or fall as people’s habits and markets change. Depending on this money for ongoing spending creates long-term financial risk, especially if the goal is to reduce the taxed behavior.
Utah’s careful budgeting has set an example for other states. Lawmakers should keep following that approach.
Raising Taxes Is Not a Substitute for Sound Policy
None of this denies the real harms of smoking. Those harms are well documented.
But raising taxes by a large amount does not always lead to better health policy. Treating products with very different risks the same way is also not good policy.
Good governance needs more than good intentions. It ought to align science, economics, and tax structure.
HB 337 combines:
- A doubling of the cigarette tax,
- Elimination of risk-based differentiation for FDA-authorized modified risk products,
- Structural tax changes for other nicotine categories, and
- New spending commitments tied to those revenues.
That is too much policy change at once and too big of a tax increase.
Utah’s success comes from careful, disciplined choices, not from big overhauls or the idea that higher taxes will solve complex problems.
HB 337 does not show the careful restraint that has made Utah successful.
Lawmakers should reject it.