The Tuscaloosa, Alabama, City Council is considering imposing a local tax on vape products to meet a state bill deadline. Alabama Act 2025-377, signed into law in May, plans to impose a $0.10 per milliliter state excise tax on vape products starting in October.
Key points:
- Time: Local vape tax legislation in the city of Tuscaloosa, Alabama, must be completed by October 1, 2025. If the deadline is missed, the tax cannot be imposed, and only statewide tax revenue will be received based on population distribution. Tuscaloosa is set to review and potentially vote on the legislation next week.
- Tax standards: Nicotine e-liquid within the city will be taxed at 10 cents per milliliter, while in the extraterritorial jurisdiction outside the city limits, it will be taxed at 5 cents per milliliter, with varying tax rates set for different areas.
- Policy background: Alabama’s House Bill 2025-377 has established a statewide vapetax and allows localities to autonomously impose taxes before October 1, 2025.
- Objective: By imposing local taxes, Tuscaloosa aims to retain the city’s vehicle tax revenue in full, avoiding the possibility of receiving less funding in the future through statewide distribution. The mayor has opposed mechanisms like “tax revenue distribution based on population.”
- Statewide trend: Several cities in Alabama have already passed local vapor taxes within the window period, indicating a trend of local-level taxation in the state.
Tuscaloosa, Alabama, plans to impose a vape tax
According to a report from the Tuscaloosa Thread on September 24, the city council of Tuscaloosa, Alabama, may soon impose a new tax on vape products. The state legislature has already passed a statewide vape tax bill, which is set to take effect in October.
The core of this discussion is Alabama’s “Bill 2025-377,” which involves the taxation and regulation of vapes. The bill was passed by the state legislature in May 2025 and was signed into law by Governor Kay Ivey.
Law takes effect in October
The legislation stipulates that a state-level new consumption tax of $0.10 per milliliter will be imposed on all disposable vape products sold or imported in bulk for use, consumption, or retail in the state.
This month, municipalities in Alabama are intensifying efforts to pass local vape tax legislation. Gulf Shores passed legislation on Monday, following the lead of cities such as Decatur, Dothan, and Orange Beach.
Policy background
The rush to enact legislation in various regions is due to the restrictions outlined in Bill 2025-377: any county or city wishing to impose a local vape tax must complete legislation by October 1, 2025. After this date, Tuscaloosa and other cities will no longer be able to impose local vape taxes.
Cities that do not have a local vape tax in place will receive funding distributed proportionally based on population from the statewide vape tax revenue- this funding will be distributed collectively by all cities.
Statewide trend
This allocation method is similar to the distribution mechanism of the “simplified use tax,” which distributes all internet sales tax revenue in Alabama based on population proportion. Tuscaloosa Mayor Walter has publicly opposed this distribution system.
Facing the imminent implementation of the state-level vape tax and a limited window for local tax legislation, the Tuscaloosa City Council may urgently pass a vape tax ordinance during its meeting next week.
A new tax proposal resolution suggests setting the tax standard for nicotine e-liquid in vape products at 10 cents per milliliter, in line with the state tax rate that will take effect in 2026. The proposal also suggests taxing areas outside of the city limits but within the city’s police jurisdiction at 5 cents per milliliter.
This measure will ensure that the city of Tuscaloosa retains all tax revenue from vapes and related products within the city limits, rather than receiving a potentially smaller annual share from state-wide funding allocation.
This resolution also specifies the reporting rules for new tax revenues and the penalties for failure to report as required.
The matter will be reviewed by the city council’s finance committee next Tuesday, and the committee may recommend a vote by the council later that evening to meet the October 1 deadline for legislation. Before the meeting, a city spokesperson declined to provide further comment on the resolution.
