Nicotine taxes, housing help advance in Legislature

Alternatives to cigarettes like nicotine pouches would be taxed under a bill advancing in the Legislature. And victims of domestic violence or human trafficking could get help paying for housing, under another bill that advanced Wednesday.

Sen. Jana Hughes is lead sponsor of the proposal to impose a 20% tax at the wholesale level on so-called alternative nicotine products. Hughes said the idea is to keep up with an ever-changing landscape of these types of products.

“Because our state government has been playing whack-a-mole in trying to keep up with all the new nicotine-based products out there, we have updated the definition of alternative nicotine products," she said. "These will not only include the nicotine pouches that we’ve seen everywhere, but also any new products that come forward."

Hughes described one of the new products, marketed under the name “Zyn” and other labels.

“They’re little pouches of basically nicotine powder," she said. "And you use them kind of like you would the tobacco pouches – you just put them between your cheek and gum... A lot of kids now are going to these nicotine pouches because they’re easier to hide. You can put them between your cheek. There’s no vape smoke that people might see…it’s not seen."

Sen. Jane Raybould offered an amendment to tax the new products by weight, rather than at the higher rate Hughes proposed. Raybould said Hughes’ approach was counterproductive.

“Politicians and public health officials now have a rare opportunity to help reduce smoking-related deaths due to the growing availability of reduced-risk electronic nicotine delivery systems and nicotine pouches," she said. "LB125, now LB9, takes the wrong approach by placing steep taxes on these products equal to those on traditional cigarettes, thereby sending the wrong message to consumers that these products are the same."

Hughes said taxing by weight wouldn’t work because nicotine powder weighs very little, and manufacturers could increase concentrations of nicotine to reduce weight. Raybould said that was not a threat, because the Food and Drug Administration would have to approve higher concentrations. Nevertheless, senators rejected her proposed amendment on a vote of 24-5, then gave the bill first round approval on a vote of 41-0.

Also Wednesday, senators advanced a bill intended to help survivors of domestic violence and human trafficking pay for housing expenses like rent and utilities that help them escape those situations. Sen. Eliot Bostar, sponsor of the legislation, said the current housing shortage increases the need for such help.

“As the affordable housing crisis gets worse, victims who would previously have come to a shelter and then moved on are now needing much longer to do so, creating a shelter bottleneck so fewer new victims can access shelter service," he said. "This bottleneck has become increasingly dangerous, ultimately leading to a cascading effect across the state, with shelters and domestic violence prevention programs reporting increased lethality in many situations due to insufficient resources to provide housing assistance."

The increased assistance would be paid for by an increase of 7 cents per $1,000 in the documentary stamp tax charged when people sell their homes. Sen. Brad von Gillern, chair of the Revenue Committee, spelled out what that would mean.

“This a seven-cent increase in the doc stamp. The median price of a home in Nebraska today is $270,000. That’s an $18.90 increase in your closing cost. So the committee felt that this was a compelling enough matter to go against the current norm, and that is not increasing any fees or taxes,” he said.

And Sen. Carolyn Bosn said there’s an urgent need for help.

“We have had a rash of absolutely horrifying incidents involving domestic assaults and murder-suicides in the last three months, the latest one of which occurred last night or early this morning, where we’ve now had a second domestic-related murder-suicide in less than a month in Lincoln. This also involved the shooting of a 13-year-old boy,” she said.

Senators gave first-round approval to the bill on a vote of 43-0.

And on another matter, senators gave second-round approval to a bill to a bill that advocates say will help rural hospitals and pharmacies. It would prohibit drug companies from imposing additional restrictions on hospitals or pharmacies that get discounted drugs under a federal program known as 340B. That measure advanced on a voice vote.

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