published on October 6, 2021 - 12:59 PM
Written by The Business Journal Staff

A newly-signed tobacco tax law will give revenue back to the education sector. 

Sen. Anna Caballero (D-Salinas) announced that her bill, SB 395, passed the legislature and was signed by Gov. Gavin Newsom and is effective July 1, 2022. 

The bill, Healthy Outcomes and Prevention Education Act (HOPE Act) has set out to create tobacco tax parity on vape products, as they’ve become increasingly popular among youth despite adverse health outcomes, according to a news release.

The bill was introduced in February and signed by Newsom on Oct. 4.

A portion of the bill imposes a tax on distributors of cigarettes at $2.87 per package of 20 cigarettes. Distributors will also be taxed based on the wholesale cost of cigarettes – the combined rate imposed on cigarettes plus the additional rate of $0.50 per pack of 20.

The revenue from the tobacco tax will fund education programs to combat tobacco use. It will also provide grants to students from underserved communities who are pursuing education in tobacco prevention. 

“This bill will provide revenue to support vital public health programs and initiatives to combat the tobacco epidemic while at the same time reducing the number of new tobacco users who enter the market each year. With Governor Newsom’s signature, California will put tobacco retail taxes to work against big tobacco’s predatory tactics which target our LGBTQ+ community and the diverse communities to which we belong,” said Dr. Shannon Kozlovich, Equality California program manager. 

The bill will also provide a permanent source of funding to the UC Merced/UCSF partnership for medical programs in the Central Valley, where health care services are limited.

“I want to thank Governor Newsom for signing legislation that will increase health outcomes for our youth. Despite the risks, vaping is increasingly evident and is especially popular among our youth. It is a problem made worse by the availability of appealing flavors such as gummy bears and cotton candy. Heavy marketing has contributed to this trend plaguing our communities, and if left unchecked will continue to do harm for generations to come,” said Caballero. “This is why I authored Senate bill 395, which proposes closer tax parity between the sale of vape and traditional tobacco products. Studies show that this helps to reduce use, while generating revenue to educate and combat tobacco usage.” 

Dr. Peter Bretan Jr., president of the California Medical Association, called it a critical piece of legislation for advancing public health because the tax parity would deter would-be tobacco users. Taxation is the way to reduce use of tobacco products, he said. 

“SB 395 is a powerful measure to prevent youth vaping and addiction now and for our next generation that we are proud to support,” said Melissa Stafford Jones, executive director of First 5 Association of California.

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