The New York Association for Convenience Stores urged state lawmakers on March 1 to reject Governor Kathy Hochul’s proposed 75 percent excise tax on nicotine pouches, saying it would increase consumer prices, harm small retailers, and drive more sales to out-of-state, online, and illicit sellers.
The association said the proposed tax would raise shelf prices on products sold in neighborhood stores. The group warned the tax could reduce in-state sales and strain small retailers that rely on those purchases to drive broader store traffic, according to the New York Association for Convenience Stores.
NYACS also said higher prices on nicotine products could reduce overall sales inside convenience stores. “Customers who buy nicotine pouches often purchase food, beverages and other essentials, and fewer visits could shrink overall revenue as retailers face rising costs,” according to the New York Association for Convenience Stores.
Tax Foundation data show New York had the nation’s highest inbound cigarette smuggling rate in 2023, with an estimated 57.9% of cigarettes consumed in the state coming from illicit sources. The group said higher taxes risk shifting more demand to untaxed or out-of-state markets, according to Tax Foundation data.
Rutgers Health researchers found that New York City’s high cigarette taxes have fueled illicit trade. In a 2023 survey of 252 littered cigarette packs across all five boroughs, only 16.6% had the required city tax stamp, down from 39.3% in 2011 and 23.7% in 2015. The study warned that this leakage reduces revenue, strains enforcement, and disadvantages compliant retailers, according to Rutgers Health researchers.
NYACS says it represents a broad cross-section of New York convenience retail, from single-store operators to chains with more than 300 locations. Founded in 1986, the association says its retail members collectively operate more than 1,600 stores across the state and serve nearly 1.3 million customers each day.
