Dan Murphy, editor in chief of Yonkers Rising, said on March 28 that New York’s proposed 75% excise tax on nicotine pouches is bad policy because it treats smoke-free nicotine alternatives too much like cigarettes.
The proposal is part of Gov. Kathy Hochul’s FY 2027 Executive Budget, which would redefine nicotine pouches as “selected nicotine products” and include them in the state’s existing tobacco tax structure. Under this plan, nicotine pouches would be taxed at 75% of the wholesale price—the same rate as most other tobacco products—even though the pouches contain no tobacco leaf and involve no combustion, according to the legislation.
Murphy said, “51.8% of the cigarettes sold in New York State are smuggled in, and the state does not collect a tax on them. A total of 186 MILLION packs of cigarettes are smuggled in untaxed, resulting in a loss of $812 MILLION in revenue. A request to our Governor and State Senate Majority Leader Stewart-Cousins. Don’t tax nicotine pouches. It is helping many New Yorkers like me to quit smoking.”
Reason reported that New York’s high cigarette taxes have fueled a major illicit market. A 2024 pack-collection study in New York City found only 16.6% of discarded cigarette packs carried the proper tax stamp, meaning roughly five out of six came through illegal channels. The findings suggest higher taxes on nicotine products could encourage similar black-market activity.
The U.S. Food and Drug Administration (FDA) authorized marketing for 20 ZYN nicotine pouch products in January 2025 after an extensive scientific review. The agency noted that many adults who previously used cigarettes or smokeless tobacco completely switched to the pouches. It also said these products pose lower risks of cancer and other serious health conditions than cigarettes and most smokeless tobacco products.
A March 18, 2026, WABC report on a Morning Consult survey found limited support for Hochul’s nicotine pouch tax among New York City voters. Among respondents from the last mayoral race, only 46% supported the tax, and just 26% strongly supported it. Fewer than a third said nicotine pouches should be taxed at the same rate as or more than cigarettes.
The proposed excise tax is being negotiated as part of New York’s FY 2027 budget process, with a statutory deadline set for April 1, 2026. If lawmakers include this provision in the final budget deal now being negotiated in Albany, it would take effect immediately.
