Alaska lawmakers have approved the state's first tax on electronic cigarettes, or e-cigarettes, just four years after Gov. Mike Dunleavy vetoed a similar tax proposal.

The measure passed on the final day of the legislative session, but a last-minute exception for cigar bars is already drawing criticism from major health organizations.

What's happening?

Alaska's Senate Bill 24 passed on May 20 by a 24-16 vote in the House and a 15-5 vote in the Senate, according to Tobacco Reporter.

If Gov. Dunleavy signs the bill into law, it would impose a 25% retail tax on e-cigarette products and prohibit purchases by anyone under 21.

The State Department of Revenue projects the new tax would generate roughly $1.36 million to $3 million annually. Unlike the 2022 version Gov. Dunleavy rejected, the new proposal taxes e-cigarettes at the retail level rather than through a 45% wholesale tax.

The bill's most contested provision allows indoor smoking in designated cigar bars. This prompted a joint warning from the American Heart Association, the American Cancer Society Cancer Action Network, and the American Lung Association.

Why is the e-cigarette tax in Alaska important?

The vote marks a shift for Alaska, which went nearly 20 years without updating its tobacco tax laws even as vaping products became more common and varied. The bill brings e-cigarettes into state policy.

Scientists have linked vaping to serious health concerns, particularly for young people. Nicotine exposure can affect adolescent brain development, and flavored or high-concentration products have made e-cigarettes especially appealing to teens and young adults.

Disposable vapes also contribute to the stream of single-use plastics, toxic e-waste, and improperly discarded lithium batteries. They create cleanup challenges and fire risks while placing additional strain on local waste systems.

The cigar bar exception raises additional public health concerns. Even as the bill aims to reduce youth access and tax nicotine products, health advocates argue that the indoor smoking exception could expose workers and customers to harmful secondhand smoke.

"The only safeguard against secondhand smoke is not to allow it," the AHA, ACS CAN, and ALA wrote in their joint statement. "Cigar smoke contains the same toxic chemicals found in cigarette smoke, including chemicals that cause cancer."

What's next?

The senate bill now heads to the governor. If he signs it into law, Alaska would join other states that already tax vaping products as part of broader tobacco-control efforts.

Per Tobacco Reporter's request, Gov. Dunleavy's office has declined to comment on his intention to sign or veto the bill.

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