The rate of tobacco sales to minors was down significantly in the first three months of the year compared to the same period last year, according to state data presented to the Legislative Health Committee on Wednesday.
Nevada’s youth sales violation rate, a number that refers to the instances in which retailers are caught selling tobacco to youth under the age of 18, was 26.7 percent in 2019, exceeding the 20 percent threshold set by the federal government. This year, that number is 9.1 percent.
But Hillary Bunker, who leads the Tobacco Enforcement Unit in the attorney general’s office, told the committee that the change likely has more to do with a new federal law barring the sale of tobacco to anyone under 21, which was passed by Congress in December, than it does a new state law imposing penalties on businesses that sell tobacco to minors, which took effect Jan. 1.
The age to purchase tobacco in Nevada is still 18; the federal law gives states three years to come into compliance and pass their own so-called Tobacco 21 laws or risk losing federal funding. Still, Bunker said the new federal legislation prompted a slew of inquiries from tobacco sellers to her office about whether they have to follow the new federal law.
“Our office fielded, without exaggerating, I would say close to 200 phone calls from retailers between the end of December and mid- to late January, and I can tell you that not one of those phone calls asked about the new Nevada law,” Bunker said. “Every single one of them asked what the age of implementation was, if the federal government was going to come out and do checks, who do they sell to, what law are they supposed to be following.”
The new state law, which was passed during the 2019 legislative session, called for warnings on businesses that sell to minors for the first two violations and a civil penalty of up to $2,500 for the fifth or subsequent violation in a 24-month period. It also decriminalized the sale to minors and imposed civil fines of up to $500 against clerks.
Another part of the law is, however, having more of an impact: The legislation extended a 30 percent wholesale tax on certain tobacco products to e-cigarettes and their accessories, expected to raise about $8 million a year. The Department of Taxation collected $7.9 million from that tax in the first three months of the year, $3.3 million more than the average collections over the past calendar year.
“It’s hard to discern whether it’s completely due to vapor, but an increase, one would infer that it is, yes, probably due to [the new law],” Melanie Young, director of the Department of Taxation, told lawmakers.
However, the state has missed out on an additional unspecified amount of revenue from the tax because of a conflict in wording between two statutes that exempts products derived from tobacco from being taxed. Young said she didn’t immediately know which products or how many of them could have been subject to the tax.
Young also told lawmakers that it is not yet clear how actual collections of the tax will differ from projections made during the legislative session. The department’s January collections were inflated because of a change in when taxes are due, from when products are sold to when products enter the state. The department also expects to see a decrease in taxes starting in April because of the ongoing COVID-19 pandemic.
“We’ll have to see how the next few months play out on that to have a better feel for the amount of revenue, if it’s in line with what we projected,” Young said.
A third portion of the new state law directs a significant portion of the new revenue it generates, $5 million over two years, to vaping prevention activities. Department of Health and Human Services officials told lawmakers those efforts are well underway, with $1.1 million allocated to media campaigns to prevent youth vaping, $600,000 to reduce underage tobacco sales and $550,000 on community interventions, among other measures.
Lawmakers also expressed concern during the meeting about the high levels of youth vaping. According to data presented by the Department of Health and Human Services, 43.5 percent of high school students self-reported using electronic vapor products, and the proportion of current high school marijuana users who report usually using it by vaping increased from 2.1 percent in 2017 to 14.1 percent in 2019.
“That’s alarming,” said Republican Assemblywoman Robin Titus, a doctor by profession. “When we reopen schools ... we should maybe encourage these folks with their plans to have something addressing that too because it's the golden opportunity where folks have not been in school, they're coming up with new plans and some of this health prevention stuff, maybe should be in some of these plans.”
Lawmakers may take up a host of other changes to tobacco and vaping law in the 2021 legislative session, notably among them, a Tobacco 21 law to bring the state into compliance with the new federal law. Other possible policies they could take up next session, as recommended by the Nevada Public Health Association and the Nevada Tobacco Prevention Coalition, include increasing the cigarette tax, increasing the other tobacco product tax, increasing tobacco licensing fees, and capping nicotine content for vapor products.