OLYMPIA, WA –  As nicotine pouches proliferate the market — and teen mouths — state lawmakers considered expanding the definition of tobacco products on Thursday to generate over $100 million in tax revenue by 2029.

Rep. Monica Stonier, D-Vancouver, proposed House Bill 2033 just days before the cutoff to pass legislation out of the chamber of origin. However, with a shortfall estimated at $12 billion over the coming years, lawmakers can still advance bills necessary to implement the budget.

Republicans say the shortfall is closer to $6.7 billion, with some adding that their peers across the aisle overestimated the figure to justify new tax hikes. Stonier told the House Finance Committee on Thursday that the tobacco tax rate can directly impact adolescent addiction.

“The tax rate can directly impact how many youths are using products that are harmful for them, and that is the basis for this,” Stonier said. “Synthetic nicotine products that are not taxed at the same rate are often times used also as cessation strategies or approaches, but not always.”

Stonier said she’s heard from educators and healthcare professionals that addiction is rising among youth who use nicotine pouches. However, the state’s definition of tobacco products, which allows it to levy additional taxes on them, doesn’t include any mention of nicotine.

The increasingly popular and addictive pouches often contain synthetic nicotine created in a laboratory rather than tobacco leaves. Stonier argued that expanding the definition to include “nicotine, whether derived from tobacco or created synthetically,” could drive down reliance.

Committee staff ran through a fiscal note on Thursday that showed HB 2033 generating around $132 million over the first four years if approved. The proposal would cost around $723,000 to implement in the first two years, with another $21,000 required on an ongoing basis afterward.

“Such products are subject to the other tobacco products tax of 95%, and furthermore, the definition of moist snuff is expanded to include any similar product that contains nicotine,” staff told the committee.

The U.S. Food and Drug Administration started authorizing the marketing of nicotine pouches in January. Retailers sold the products illegally until the FDA approved 20 Zyn products just a few months ago, with many brands currently on the market still considered unlawful.

Supporters of HB 2033 agreed that increasing tobacco excise taxes could reduce overall use rather than point consumers to cheaper alternatives. Audrey Miller, with the Cancer Action Network, said the state spends $3.26 billion annually on healthcare costs related to tobacco.

“There are a number of different cessation devices that are approved and certified by the FDA; this is not one of them,” Miller testified.

Despite its market authorization in January, the FDA still hasn’t approved nicotine pouches as a smoking cessation aid, such as patches, gum or lozenges. Megan Moore, representing the Washington State Public Health Association, said HB 2033 fixes a loophole in the tobacco tax structure.

Moore argued that a 10% increase in tax rates is associated with a 6.5% drop in youth tobacco use and a 2% reduction in adult consumption. Others opposed to HB 2033 pushed that expanding the definition would push more people back to smoking due to the tax hike on pouches.

Several store owners spoke about customers who quit smoking after switching to pouches.

“He’d been coming in my store for about two and a half years, and this man was a two-pack-a-day smoker,” one owner testified. “He got married … his wife got pregnant [and] he wanted to make a healthier choice for his baby.”

They say the alternative changed lives for the better and that HB 2033 would make that work all for nothing. Some said pouches allowed them to save their kids from the effects of secondhand smoke and other related health impacts. Others said the bill could increase smuggling.

According to the Tax Foundation, higher rates of tobacco drive smuggling, with Washington missing out on $178.8 million due to around 59 million packs of illicit cigarettes in recent years.

Crystal Leatherman, representing the Washington Retail Association, said HB 2033 could take the cost of nicotine pouches from around $6 to over $11. Recent studies show more than 2 million youths reporting tobacco use, nicotine pouches being among the most popular, with 1.8% reporting use.

“Nicotine products like pouches are not taxed in most states, and the few states that do tax them are taxing them at a far lower level than what we’re seeing in this proposal,” said Katie Beeson, government affairs director of the Washington Food Industry Association.

Originally published by The Center Square on March 21, 2025. Read the original article at The Center Square.