Alison Ritchie, president of the New York Association of Convenience Stores (NYACS), said New York’s proposed 75% tax on nicotine pouches will widen the price gap between licensed and unlicensed sellers and push consumers toward illicit markets and out-of-state purchases.
The issue was raised during a February 26, 2026, event at the Albany Capitol as lawmakers considered budget proposals.
The proposed tax is part of Governor Kathy Hochul’s executive budget plan. Ritchie emphasized that increasing taxes on legal products shifts demand rather than eliminating it. According to Alison Ritchie, “When you raise taxes on adult legal products, beyond what the market can bear, demand does not disappear; it shifts. New York has seen this before, with cigarette smuggling and illegal vape shops. At 75%, the tax will widen the price gap between licensed stores and unlicensed sellers, who don’t check ID and don’t pay taxes.”
“Second, it burdens law-obeying retailers without fixing enforcement. Independent retailers will face more painful work and more liability, while unlicensed smoke shops and online sellers continue to operate outside the rules. If the goal is to protect communities, the focus should be on shutting down illegal operators and enforcing the laws that are already on the books.”
High tobacco taxes have historically been linked to increased illicit trade in New York. The Tax Foundation estimates that over half of cigarettes consumed in New York were not purchased legally within the state. Additionally, Rutgers Health researchers found that high cigarette taxes in New York City have contributed to illicit trade.
Ritchie also highlighted potential negative impacts on small businesses.
According to Alison, “Third, it hurts small businesses and drives commerce out of New York. Convenience stores or small businesses rely on in-store transactions to support the sales of fuel, food and everyday essentials. When customers shift their purchases out of state or to the illicit market, stores lose sales, and the state loses tax revenue. At a time when leaders are focused on affordability, this proposal raises prices and increases pressure on working families.”
The Tax Foundation reports that New York has experienced significant cigarette-tax revenue losses due to smuggling activities. Consumers often respond to high taxes by purchasing products across state borders where they are cheaper.
Alison Ritchie serves as President of NYACS, representing thousands of convenience retailers across New York State. Her experience with tobacco policy underscores her engagement with issues affecting member retailers.
