May 26, 2026
The Honorable Mike Dunleavy
Governor of the State of Alaska
Alaska State Capital, Executive Floor
120 4th Street
Juneau, Alaska 99811
Dear Governor Dunleavy,
On behalf of the members and supporters of the Council for Citizens Against Government Waste (CCAGW) in Alaska, I urge you to use your line-item veto on Section 20 of SB 24, which imposes a 75 percent wholesale tax on synthetic nicotine products and nicotine substitutes, the same tax rate as tobacco products. The tax would undermine public health by discouraging the use of less harmful alternatives to combustible tobacco.
The Food and Drug Administration (FDA) has recognized the importance of tobacco harm reduction (THR). In October 2023, the FDA approved a Premarket Tobacco Application (PMTA) for nicotine pouch products, calling their sale “appropriate for the protection of public health.” To receive a PMTA, applicants must undergo an extensive, multi-year scientific review including multiple rounds of both laboratory toxicological testing and controlled patient trials to meet the highest standard of evidence that the product improves overall public health compared to alternatives already on the market.
Smoke-free nicotine products, which contain no tobacco, offer adult smokers a substantially less harmful alternative to cigarettes. Equating those products by imposing the same wholesale tax would not only make THR products unaffordable for many adult smokers seeking to quit combustible tobacco but also send the misleading message that all nicotine products are equally dangerous, contrary to overwhelming evidence. Countries like Sweden, where adult smokers have widely adopted tobacco alternatives like nicotine pouches have seen historic reductions in smoking rates and smoking-related diseases.
Heavy taxes on reduced-risk products do not eliminate demand; they shift it to dangerous unregulated black markets. Alaska should not repeat other states’ mistakes by pushing legal, regulated sales into those markets.
Instead of increasing the wholesale tax on nicotine alternatives, Alaska should tax them at rates lower than combustible tobacco. Doing so would support legitimate businesses and ensure that adult users have continued access to alternative products to help them quit smoking. Tax policy should reflect the continuum of risk among nicotine products and incentivize safer choices, not deter them.
For the above reasons, I again ask you to veto Section 20 of SB 24 and eliminate the 75 percent wholesale tax on synthetic nicotine products and nicotine substitutes.
Sincerely,
Tom Schatz
President, CCAGW