Iowa Tobacco And Vape Tax Proposal ‘Temporarily Shelved’

According to Radio Iowa, Iowa House Speaker Pat Grassley stated that House Republicans are discussing the governor’s proposal to increase the state’s tobacco product tax rate and begin imposing a 15% sales tax on vape products, which is currently in a “holding pattern”.

Quick overview of key points
1. Speaker of the House Pat Grassley said: House Republicans are weighing the governor’s tobacco tax proposal against a 15% sales tax on vapes.
2. The House of Representatives has removed the tax increase from the Governor’s MAHA bill, and Grassley stated that it is currently in a “holding pattern”.
3. Governor Kim Reynolds claims to be ‘not a tax governor’, but says that taxing products associated with lung cancer is in line with the MAHA agenda.
4. Senate Majority Leader Mike Klimesh has stated that he will discuss taxing vapes; The governor’s broader tax increase plan failed to pass the Senate committee last week.
5. State report: Iowa adult smoking rate is 5.6%; The use of vapes continues to rise, with 23.5% of 18-24 year olds regularly vaping.

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According to reports, Grassley stated at a press conference on Thursday afternoon that there is tension between this proposal and the tax cuts recently pushed by the Republican Party. He mentioned that the Republican Party continues to reduce the tax burden, including promoting the flat income tax rate of 3.8% and canceling it for retirees.
The report also stated that Governor Kim Reynolds told reporters the day before that she was “not a governor who would raise taxes,” but she believed that taxing products associated with lung cancer was in line with the “Make America Healthy Again” (MAHA) agenda. The report pointed out that the Republican Party in the House of Representatives has taken action to remove the tax increase content from the governor’s MAHA bill. Grassley stated that it is “uncertain” whether the tax increase will occur again, and said that since their first step was not to include it in the originally proposed bill, “it is currently in a state of suspension”.

According to reports, before the 2026 legislative session begins, Senate Majority Leader Mike Klimesh, a former smoker, stated that vapes also deliver nicotine and he will discuss taxing vapeswith his Republican colleagues in the Senate. The report also stated that the governor’s broader plan (to tax vapes and increase tobacco taxes) failed to pass in a Senate committee last week.
At the end of the report, a state report was cited stating that the adult cigarette smoking rate in Iowa has dropped to 5.6%, but vaping use continues to rise, with 23.5% of the 18-24 year old population regularly vaping.

Reference: Governor’s tobacco, vape tax hikes in holding pattern in Iowa House – Radio Iowa

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