BIRMINGHAM, Ala. — A bipartisan group of legislators in Southern states have passed new tax incentives for smokeless, heated tobacco products, embracing a new line of alternatives to cigarettes that have the potential to reduce health hazards, which could save states billions on health costs in America.
Alabama Gov. Kay Ivey (R) signed new legislation in May to implement a tax on new heated tobacco products, a new line of alternatives to combustible cigarettes that, while not risk free, can significantly reduce the production of harmful and potentially harmful chemicals compared to smoking.
That law, introduced by state Rep. Rolanda Hollis (D), comes as Philip Morris International’s U.S. businesses prepare to introduce heated tobacco products in several American markets.
“I tested the product on [my husband] at home, and what we realized is that it did help him with that craving for cigarettes,” Hollis told lawmakers at the Southern Legislative Conference here. “This is a product to help someone get off cigarette smoking.”
“This poses less potential harm,” Hollis said.
Similar legislation won approval in Mississippi in 2024, where Sen. Daniel Sparks (R) carried the measure. Sparks told lawmakers he wanted to tax heated products at a rate lower than traditional combustible cigarettes as a way to incentivize smokers to move to a better option in a state with some of the worst health outcomes in the country.
“It’s a harm risk reduction product,” Sparks said. “It is targeted toward people who are currently smoking and facing the health outcomes that generally comes from smoking.”
Former Health and Human Services Secretary Tom Price, who chaired the U.S. House Budget Committee during a dozen years in Congress and is currently an advisor to PMI, said financial incentives can be powerful motivators — both for states and for smokers themselves.
“We spend as a nation about a quarter of a trillion dollars taking care of the consequences of people smoking,” Price said. “You want to financially incentivize individuals to stop smoking. You don’t want it to just be based on health. You want it to be also based on the finances.”
Bills addressing tax rates for heated tobacco products have also been introduced this year in Iowa, Florida, Oklahoma and Tennessee.
Brian Erkkila, director of regulatory science at PMI’s affiliate, Swedish Match North America, which makes smoke-free products such as ZYN, said heated products introduced in other countries have had a substantial impact on smoking behavior.
In Japan, 72% of users who used the heated product stopped using combustible cigarettes. At the same time, sales of combustible cigarettes have declined at an even faster pace since their nationwide introduction in 2015. In New Zealand, sales of combustible cigarettes have fallen dramatically in the six years since heated products were introduced.
“The public health impact of that is huge,” Erkkila said. “With almost half a million deaths in this country from combusted cigarette smoking alone according to public health data, the impact here could be massive.”
“New products on the market that can cut the health costs associated with smoking deserve a government response,” Sparks said.
“The federal government moves at the speed of a snail. I mean, they are slow, and they have not updated the definition of a cigarette in 50 years. They wouldn’t be responsive to new technology that has come forward,” Sparks said.