Tuscaloosa City Council May Adopt Tax on Vapes Before State’s Kicks In Next Year

The Tuscaloosa City Council may soon adopt a new tax on vaping products ahead of a statewide tax already approved by the legislature and set to take effect next October.

At issue is Alabama Act 2025-377, which taxes and regulates vapes and was passed by the legislature and signed by Governor Kay Ivey in May of this year. 

Part of the law "levies a new state excise tax of $0.10 per milliliter on all consumable vapor products sold at wholesale or imported into this state for use, consumption, or sale at retail."

That goes into effect across Alabama in October 2026, regardless of what happens here in Tuscaloosa.

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This month, municipalities all over the state are rushing to pass their own vape taxes - Gulf Shores did so Monday, joining Decatur, Dothan, Orange Beach, and other cities.

The urgency stems from the language of Act 2025-377, which states that any county or municipality seeking to enact its own vape taxes must do so before October 1, 2025. Tuscaloosa and other cities will be unable to adopt their own taxes on vape products after that date.

Instead, any municipality that does not have its own tax in place would receive a distribution from the statewide tax, based on its population size—a single pool from which all municipalities draw.

It sounds similar to the distribution plan for the Simplified Sellers Use Tax, which divies up all internet sales tax dollars in Alabama by population, and Tuscaloosa Mayor Walt is an outspoken opponent of that system.

Facing the certainty of the statewide tax and a limited window to pass a local one, the Tuscaloosa City Council may rush to adopt a city vape tax when it meets next week.

A resolution proposing the new tax suggests setting the rate at 10 cents per milliliter of nicotine solution in vape products - the same as the state tax coming next year. At locations outside the city limits but within the police jurisdiction of the City of Tuscaloosa, they propose a 5-cent tax.

This will ensure that Tuscaloosa keeps all the tax revenue from vapes and vape products sold in the city rather than receiving a potentially smaller amount each year from the statewide pool.

The resolution also sets rules for reporting this new revenue and penalties for failing to do so.

The matter will be considered next Tuesday during a meeting of the city council's finance committee, which may recommend it for a vote the same evening to beat the October 1st deadline. A city spokesperson declined to comment further on the resolution ahead of the meeting.

For coverage of that meeting when it happens next week, stay connected to the Tuscaloosa Thread.