On January 27, 2026, the R Street Institute addressed a letter to New York Governor Kathy Hochul, urging her to reconsider a proposed tax increase on nicotine pouches included in the state’s Fiscal Year 2027 Executive Budget. The proposal would expand the definition of taxable tobacco products to include alternative nicotine items such as pouches and subject them to a 75% excise tax—equivalent to that imposed on cigarettes and other tobacco products. Details about this proposal can be found in the executive budget documentation at https://www.budget.ny.gov/pubs/archive/fy27/exec/fy27pdf/fy27executivebudget.pdf.
Jeffrey S. Smith, PhD, senior fellow for Integrative Harm Reduction at R Street Institute, wrote: “We respectfully urge you to reconsider the proposed tax increase on nicotine pouches outlined in your Fiscal Year 2027 Executive Budget proposal. This measure seeks to expand the definition of taxable tobacco products to include alternative nicotine products like pouches, subjecting them to a 75% excise tax similar to that on cigarettes and other tobacco items. While we appreciate the administration’s focus on public health and revenue generation, we believe this policy overlooks the significant role that reduced-risk nicotine products, such as pouches, play in helping individuals transition away from combustible cigarettes, the most harmful form of nicotine consumption. Implementing a risk-proportionate taxation approach, where taxes are scaled based on the relative harm of products, would better align with scientific evidence and promote better health outcomes for New Yorkers.”
The R Street Institute noted its support for restricting sales of nicotine-related products to those over age 21 and referenced its advocacy for national measures raising the purchase age. It also emphasized concerns about smoking-related health consequences and advocated for access to reduced-risk alternatives including electronic nicotine delivery systems (ENDS), heated tobacco systems (HnB), snus, and nicotine pouches.
Citing early research findings published in peer-reviewed journals (see https://academic.oup.com/ntr/article-abstract/22/10/1757/5823724), Smith highlighted that “nicotine pouches curtail withdrawal symptoms and help smokers reduce or stop using combustible tobacco use—at rates similar to or better than FDA-approved nicotine replacement products (patches, gums, lozenges).” He also referenced studies indicating that these pouches contain lower levels of potentially harmful ingredients compared with other oral tobacco/nicotine products (https://www.tandfonline.com/doi/abs/10.1080/01480545.2021.1925691).
Smith argued that supporting access to reduced-risk alternatives could address persistent public health challenges related to smoking in New York State. According to federal data (https://www.cdc.gov/tobacco/nicotine-pouches/index.html), adult smoking prevalence in New York remains between 12% and 14%. The letter suggests that facilitating switching from cigarettes to lower-risk options could prevent thousands of premature deaths annually.
The letter cited actions by federal regulators: “In fact, the FDA Center for Tobacco Products (CTP) has granted marketing orders for nicotine pouches produced by Swedish Match (ZYN). The CTP stated in their announcement that these nicotine pouches are appropriate for the protection of public health, providing more benefits to the population’s health than risks.” For further information on this regulatory decision see https://www.fda.gov/news-events/press-announcements/fda-authorizes-marketing-20-zyn-nicotine-pouch-products-after-extensive-scientific-review.
Addressing concerns about youth access and usage rates—which have been raised as reasons for stricter regulation—the R Street Institute pointed out that underage use remains low according to recent CDC survey data: fewer than 1.8% of youth reported using these products (source: https://www.fda.gov/tobacco-products/youth-and-tobacco/results-annual-national-youth-tobacco-survey). Smith added: “While the potential for increased youth use of these products is a valid concern, we believe that a more effective approach to curbing youth access is through enforcement of Tobacco 21 (T21), not taxation.”
Smith recommended adopting a risk-proportionate taxation system where less harmful alternatives like nicotine pouches are taxed at lower rates than combustible cigarettes—a view supported by various policy experts (see https://reason.org/backgrounder/taxes-on-tobacco-alternatives-undermine-harm-reduction-efforts).
“We urge you to reconsider this measure in favor of a science-based, risk-proportionate policy that prioritizes the well-being of New York citizens,” Smith concluded.
The letter was copied to Stacy Lynch, Chief of Staff; Bella Satra, Assistant Counsel; both from Governor Hochul’s office.
