Protecting Public Health and Choice: The Case Against Taxing Tobacco Harm Reduction Products in Idaho

Recent legislative efforts are underway in Idaho focusing on imposing excise taxes on reduced-risk products such as vapes and nicotine pouches. This development means that Idaho residents may face restricted access and higher costs for products that could help them quit smoking combustible cigarettes.  

About 30 million American adults smoke cigarettes, causing more than 480,000 deaths yearly, including 41,000 from secondhand smoke—about one in five deaths, or 1,300 daily. A cigarette has more than 6,000 ingredients and releases over 7,000 chemicals when burned. Smoking links to many diseases, strains healthcare, and costs taxpayers billions annually.

Yet, the nicotine alone in the cigarette does not have the same adverse effects as inhaling the carcinogens from cigarette smoke. Tobacco harm reduction (THR) products, which the Idaho legislature is considering taxing, offer a less harmful alternative for Americans trying to quit smoking, providing nicotine without the harmful chemicals. THR products successfully help millions quit smoking each year. According to CDC data and analysis, cigarette smoking among U.S. adults has experienced a significant and long-term decline. Between 2005 and 2021, the prevalence of adult smoking dropped from 20.9 percent to 11.5 percent. A March 2023 CDC report found that in 2021, 40.3 percent of adult e-cigarette users had previously smoked cigarettes. However, nicotine poses only a small part of the health risks of traditional tobacco. Over 30 years, THR has helped millions switch to less harmful options like e-cigarettes, heat-not-burn systems, smokeless tobacco, and snus.

In 2023, 155,728 Idaho adults were categorized as currently smoking. This is a 12.6 percent decrease from 2022, representing 19,303 fewer adults who smoke. Instead of taxing products that help adults quit, legislators should support THR efforts and allow consumers to make their own choices.

The Idaho vaping industry made a significant contribution to the state’s economy in 2023, with a $96.726 million impact, supporting 574 jobs and generating $29.492 million in wages. Implementing taxes will have negative consequences for the state and lead to more unregulated black-market sales, as has been shown in high-tax states like New York.

A recent article by the Cato Institute (published on February 16, 2026) points out a significant flaw in the rationale for applying excise taxes to THR products. As the article states, “If lawmakers in New York and other states want to see where this will lead, they can look down under to Australia, which has taken New York’s prohibitive cigarette taxes several steps further. In 2016, the Australian government announced it would raise tobacco excise taxes by 12.5 percent each year through 2020, explicitly aiming to discourage cigarette smoking by driving the price of a pack up to A$40. The government didn’t stop there. By December 2025, according to tobaccoinaustralia.org, continued tax hikes pushed the average price of “mainstream cigarette packs” to A$55 or A$2.32 per cigarette. The result, according to a February 15 report in The New York Times (NYT): “[T]he high prices have also given rise to a thriving black market now estimated to be a multibillion-dollar industry that accounts for as much as half of all tobacco sales in the country.” NYT reports that organized crime groups competing for a share of this lucrative market have triggered waves of violence, including firebombings, extortion, shootings, and homicides.”

As tobacco revenue declines and budgets tighten, lawmakers are considering expanding the tax base to include THR products. Excise taxes on THR products are an unpredictable revenue stream. The National Bureau of Economic Research found that e-cigarette taxes often reduce vape sales in the state but increase traditional cigarette sales. Additionally, research shows that in the U.S., higher electronic nicotine delivery systems (ENDS) tax rates are associated with decreased ENDS use but increased cigarette smoking among 18- to 25- year-olds.

The introduction of e-cigarettes has not led to increases in young adult cigarette smoking, but rather correlates with significant declines, as youth smoking rates are at historic lows in the Gem State. In 2021, 19.1 percent of high school students reported ever trying combustible cigarettes, and 3.8 percent reported currently smoking or using the product on at least one occasion in the 30 days prior.

Youth vaping in Idaho peaked in 2019, with 48.1 percent of high school students reporting ever using e-cigarettes and 21.5 percent currently vaping. By 2021, lifetime use declined to 38.5 percent, and current use to 17.9 percent. In 2021, about 17,432 high school students vaped, compared to 105,960 Idaho adults aged 18+ who vaped. For every high schooler vaping, over six adults also used e-cigarettes.

Given the historic lows in smoking rates among young adults and the benefits THR products offer for smoking cessation among adults, policymakers should avoid implementing policies that limit access to alternatives to smoking for adults. Idaho lawmakers should refrain from relying on regressive taxes that disproportionately burden lower-income individuals and keep black markets thriving. Policymakers should also avoid taxing tobacco harm-reduction products, as evidence continues to show that THR products are significantly less harmful and that their use should be promoted for adults looking to quit smoking, not taxed.