Reduces the cigarette tax imposed by 75% for any modified risk tobacco product as defined in § 21 U.S.C. 387 k as a tobacco product sold/distributed to reduce the harm/risk of tobacco-related disease associated with commercially marketed tobacco products.

Rhode Island Modified Risk Tobacco Product Tax Reduction Bill

This bill would reduce the cigarette tax in Rhode Island by 75% for certain tobacco products that have been officially designated as "modified risk tobacco products" by the U.S. Food and Drug Administration (FDA). To qualify for this tax break, a product must be formally approved under federal law as one that is sold or marketed specifically to reduce the health risks associated with traditional tobacco use. In practical terms, this means the product must have already gone through a rigorous FDA review process before it could benefit from the lower tax rate.

The bill primarily affects tobacco companies selling FDA-approved reduced-risk products, retailers who carry those products, and consumers who purchase them. Under this change, qualifying products would be taxed at only 25% of the standard cigarette tax rate, making them significantly cheaper compared to conventional cigarettes. The idea is that the lower tax would reflect the product's officially recognized lower risk profile compared to traditional tobacco.

It's worth noting that very few tobacco products have actually received full FDA "modified risk" authorization to date, so the immediate real-world impact of this bill may be limited. However, if more products receive that federal designation over time, the tax reduction could apply more broadly. The bill has been introduced in the Rhode Island Senate and referred to the Senate Finance Committee, where it is scheduled for a hearing. No final vote has taken place yet.