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Shaheen, Blumenthal and Colleagues Spearhead Bill to Crack Down on E-Cigarette Companies & Close Tax Loophole on Advertising

(Washington, DC) – Today, U.S. Senators Jeanne Shaheen (D-NH) and Richard Blumenthal (D-CT), reintroduced the No Tax Subsidies for E-Cigarette and Tobacco Ads Act, which would crack down on e-cigarette companies and close a tax loophole that allows manufacturers to claim federal tax deductions for the cost of advertising for e-cigarettes and tobacco products. Senators Brown (D-OH), Reed (D-RI) Durbin (D-IL), Van Hollen (D-MD), Merkley (D-OR) also joined in reintroducing this bill.

In November 2022, the Food and Drug Administration and Centers for Disease Control and Prevention (CDC) released federal data showing that over 3 million middle and high school students had used a tobacco product during the past 30 days. Over 2.5 million middle and high school students reported using e-cigarettes in that same time period, and one in four of that population reported daily use. This comes as youth e-cigarette use rose 1,800% from 2011 to 2019. More than 30% of teens who start using e-cigarettes begin smoking traditional tobacco products within six months. More than a quarter of current youth e-cigarette users use and e-cigarette product every day. Over 85 percent of user use fruit flavors. Amongst students surveyed, those who use social media found that 73.5% of students have seen e-cigarette related content.

“E-cigarettes are fueling a public health crisis – particularly among teenagers. E-cigarette and Big Tobacco companies must be held responsible for deliberately advertising these dangerous products to youth,” said Shaheen. “It’s outrageous that a tax loophole allows companies to write off the costs of their ads, having taxpayers foot the bill and subsidize the advertising of harmful products. That’s why I’m reintroducing legislation to close this loophole and hold e-cigarette companies accountable for their harmful marketing practices.”

“Old regulatory loopholes are helping Big Tobacco addict more Americans to lethal products,” said Blumenthal. “This bill will close a gaping tax loophole, putting an end to Big Tobacco’s tax write-offs of dangerous ads and preventing young people from starting up a deadly addiction.”

“Taxpayers shouldn’t be on the hook for helping e-cigarette companies hook kids on harmful chemicals,” said Reed. “It is irresponsible to subsidize Big Tobacco.”

“There shouldn’t be a tax incentive for e-cigarette companies to peddle their poison to kids,” said Durbin. “As I have said time and time again, we know that Big Tobacco will try anything to addict our children. We need to take this epidemic seriously. That’s why I’m joining my colleagues to introduce legislation that helps crack down on Big Tobacco’s predatory tactics.”

“We applaud Senator Shaheen and Senator Blumenthal for their work to protect kids from e-cigarettes and other tobacco products,” said Matthew L. Myers, President of the Campaign for Tobacco-Free Kids. “Tobacco products cause addiction and harm health. Tobacco companies should not receive a tax break for advertising them.”

Television and radio advertising for traditional tobacco products have been banned under federal law, and certain other forms of Big Tobacco advertising are restricted under the 1998 Tobacco Master Settlement Agreement. However, none of these restrictions apply to e-cigarettes. While some television outlets have started pulling e-cigarette ads from the air in response to the ongoing youth vaping crisis, the ads are still being run by other outlets. To ensure parity between e-cigarettes and traditional tobacco, the Shaheen and Blumenthal bill also bars tax deductions for advertising expenses related to tobacco cigarettes, cigars, snuff, chewing tobacco, pipe tobacco, and roll-your-own tobacco.

Senator Shaheen has prioritized efforts in the Senate to tackle the youth vaping crisis. She led the bipartisan, bicameral introduction of the Resources to Prevent Youth Vaping Act, which would require that e-cigarette manufacturers pay user fees to the Food and Drug Administration (FDA) to help to fund more activity at the FDA to conduct stronger oversight of the e-cigarette industry and increase awareness for the danger of e-cigarettes. In the FY 2023 government funding bill, Shaheen helped negotiate more than $2.408 billion in funding for the Substance Abuse Prevention and Treatment Block Grant. The proposal also includes report language added by Shaheen to address youth e-cigarette use and encourages NIDA to support research to develop therapies to combat pediatric nicotine addiction. Earlier this year, Shaheen joined a bipartisan group of Senators in calling on the Food and Drug Administration (FDA) to take long-overdue action to combat the youth vaping crisis, including steps that could remove kid-friendly, addictive e-cigarettes from the market.

Text of the legislation can be found here.