End Tobacco Loopholes Act

This bill amends the Internal Revenue Code to increase and equalize excise taxes on all tobacco products, including cigarettes, cigars, smokeless tobacco, pipe tobacco, roll-your-own tobacco, and newly taxes nicotine for vaping. It also adds inflation adjustments and floor stocks taxes.

Sec. 2, Increasing excise taxes and establishing tax equity: This section raises excise tax rates on various tobacco products to achieve parity. For roll-your-own tobacco, the tax is increased from $24.78 to $49.56 per pound. For pipe tobacco, the tax is increased from 2.8311 cents to $49.56 per pound. For smokeless tobacco, taxes are raised: chewing tobacco from $1.51 to $26.84 per pound, snuff from 50.33 cents to $10.74 per pound, and a new tax of $100.66 per thousand is added for discrete single-use units (like pouches or lozenges). For small cigars, the tax is increased from $50.33 to $100.66 per thousand. For large cigars, the tax is changed to $49.56 per pound, with a minimum of 10.066 cents per cigar. For small cigarettes, the tax is increased from $50.33 to $100.66 per thousand, and for large cigarettes, from $105.69 to $211.38 per thousand.

Sec. 2(g), Tax on nicotine for vaping: A new tax is imposed on taxable nicotine (extracted, concentrated, or synthesized) at the same rate as small cigarettes per 1,810 milligrams of nicotine. This excludes nicotine used in FDA-approved drugs or combination products. Taxable nicotine is treated as a tobacco product, and those who extract, concentrate, or synthesize nicotine are considered manufacturers.

Sec. 2(i), Inflation adjustment: Starting after 2026, all tax dollar amounts in this chapter will be increased annually based on the cost-of-living adjustment, rounded up to the next cent.

Sec. 2(j), Floor stocks taxes: A one-time tax is imposed on tobacco products held for sale on the date a tax increase takes effect, equal to the difference between the new and old tax rates. A $500 credit is allowed per person. Payment is due 120 days after the tax increase date.

Sec. 2(k), Effective dates: Most tax changes apply to articles removed after the month of enactment. Changes for discrete single-use units and processed tobacco apply after 6 months. Large cigar changes apply after December 31, 2025. Taxable nicotine changes apply to articles removed in calendar quarters starting 180 days after enactment.

Sec. 2(l), Transition rule: Manufacturers or importers of taxable nicotine lawfully in business on the enactment date have 90 days to apply for permits under chapter 52, and cannot be denied the right to carry on business before final action on their application.