New York Governor Proposes Tax on Nicotine Pouches

Hochul's budget plan would expand tobacco tax to include nicotine products like Zyn and Velo.

Published on Feb. 26, 2026

Got story updates? Submit your updates here. ›

New York Governor Kathy Hochul has proposed broadening the state's definition of tobacco products to include nicotine pouches, which would subject them to a 75% wholesale tax. The move is aimed at curbing youth usage and raising funds for healthcare, but industry experts argue it could drive up prices and hurt low-income consumers who use the products as a safer alternative to cigarettes.

Why it matters

Nicotine pouches have emerged as a popular alternative to traditional tobacco products, but their regulation and taxation remain a point of debate. This proposal highlights the ongoing tensions between public health concerns, consumer choice, and the fiscal interests of the state.

The details

Governor Hochul's Executive Budget for fiscal year 2027 would broaden the definition of tobacco products to include nicotine pouches like Zyn, Velo, and On!. This would subject these products to the state's existing 75% wholesale tax on tobacco. Industry experts argue that such a high tax could drive up prices and make the products less accessible, especially for low-income consumers who use them as a safer alternative to cigarettes.

  • Governor Hochul proposed the tax in her Executive Budget for FY 2027.
  • The FDA authorized the marketing of Zyn nicotine pouches a year ago.

The players

Governor Kathy Hochul

The governor of New York who has proposed expanding the state's tobacco tax to include nicotine pouches.

Dr. Brian Erkkila

The Director of Regulatory Science at Swedish Match, a subsidiary of Phillip Morris International that makes the Zyn nicotine pouch.

Dr. Matthew Farrelly

An official at the FDA's Center for Tobacco who issued a statement authorizing the marketing of Zyn nicotine pouches a year ago.

Dr. Emily Eisner

An economist at the Fiscal Policy Institute who suggests there are other untapped areas to tax consumers, such as services like hair salons and legal services.

Got photos? Submit your photos here. ›

What they’re saying

“We want to raise awareness and educate the difference between the nicotine pouch and the cigarette.”

— Dr. Brian Erkkila, Director of Regulatory Science, Swedish Match (mytwintiers.com)

“In this case, the data shows that these nicotine pouch products meet that bar by benefiting adults who use cigarettes and/or smokeless tobacco products and completely switch to these products.”

— Dr. Matthew Farrelly, Official, FDA Center for Tobacco (mytwintiers.com)

“Currently there's not a tax on services people spend a lot of money on…hair salons, nails salons, lawyer services.”

— Dr. Emily Eisner, Economist, Fiscal Policy Institute (mytwintiers.com)

What’s next

The governor's office says the proposed nicotine pouch tax will be included in the state's upcoming budget negotiations.

The takeaway

This debate over taxing nicotine pouches highlights the ongoing tensions between public health concerns, consumer choice, and state revenue interests. As alternative nicotine products gain popularity, policymakers must carefully weigh the impacts of taxation on accessibility, harm reduction, and overall fiscal policy.