The Governor of New York State has proposed a plan in the state budget to tax nicotine pouches such as ZYN at the same rate as cigarettes—a 75% wholesale tax. The state government estimates that the measure would generate approximately $18 million in additional revenue in the fiscal year beginning April 1, and about $44 million in the following year once fully implemented. Philip Morris, the company behind the ZYN brand, stated that the proposed tax could raise concerns regarding public health and product affordability.

Key Points

• New York Governor Kathy Hochul proposed taxing nicotine pouches such as ZYN in the $260 billion state budget;
• The proposal would apply the same 75% wholesale tax rate as cigarettes, generating an estimated $18 million in new revenue in the first year and $44 million in the second year;
• A Philip Morris spokesperson said the tax plan raises concerns about public health and affordability, warning that high tax rates could make it harder for adults to switch from cigarettes to alternatives;
• Researchers from Rutgers University advocate for an “evidence-based differential tax rate” — higher than zero but lower than that for cigarettes;
• The report also notes concerns about increased youth usage, while mentioning ZYN product specifications and flavor information.

According to the New York Post, New York Governor Kathy Hochul is pushing a plan to tax ZYN nicotine pouches and other nicotine products at the same rate as cigarettes.

Under the $260 billion state budget proposal released this week, the products would be subject to a 75% wholesale tax, identical to that imposed on cigarettes. The measure is expected to generate $18 million in revenue in the fiscal year beginning April 1, and $44 million in the following year once fully implemented.

ZYN became the first nicotine pouch product to receive approval from the U.S. Food and Drug Administration (FDA) in January 2025.

A spokesperson for Philip Morris, the owner of the ZYN brand, said that imposing a new tax on nicotine pouches “raises serious concerns regarding public health and affordability.”

The company stated that “a tax of this magnitude would make it more difficult for adults to switch from cigarettes to alternative products,” and expressed its willingness to work with the Hochul administration and lawmakers to achieve public health goals without discouraging adult smokers from transitioning away from cigarettes.

Philip Morris noted that approximately 1.4 million residents in New York State still smoke cigarettes, with smoking rates higher among lower-income and less-educated populations.

Cristine Delnevo, Director of the Rutgers University Institute for Nicotine & Tobacco Studies, said that tax policy should reflect relative risk. She warned that “taxing nicotine pouches at the same rate as other tobacco products could undermine harm reduction, while not taxing them at all could encourage youth use.” She advocated for an “evidence-based differential tax rate — higher than zero but lower than that for cigarettes — as a better approach for public health.”

Image source: New York Post