City of Ozark to Consider Local Vape Tax While Alabama State Tax on Vape Liquid Takes Effect Next Year
By: Jeff Devine
The Ozark City Council has set a public hearing to consider passing an ordinance to tax vape liquid at the wholesale level in Ozark. The hearing is set for tonight at 5:00 p.m. See updated post with the full story from the council meeting by clicking here.
If passed, Ozark would place a $0.10 tax on each milliliter of vape liquid containing nicotine sold by businesses in Ozark.
The proposed tax comes as the State of Alabama recently enacted a measure that will place a broad $0.10 tax on each milliliter of nicotine-containing vape juice/liquid at the wholesale level or imported into the state for use. This statewide tax will take effect on October 1, 2026.
The Dale County Chronicle reached out to the Alabama Department of Revenue regarding the tax, and we were referred to the following prepared statement:
“Effective October 1, 2026, Act 2025-377 levies a 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. Any county or municipality that does not levy a local tax on consumable vapor products will receive a portion of the state vapor products tax based upon the ratio of the population of each county or municipality to the total population of all counties or municipalities in the state. Any county/municipality that has a local vapor products tax as of October 1, 2025, will not be eligible to receive a distribution from the proceeds of the state consumable vapor products tax. Furthermore, no county or municipality may levy an additional tax or license fee on the sale of consumable vapor product taxes after October 1, 2025.”
If the proposed ordinance in Ozark passes, the local $0.10 tax will take effect before October 1 of this year. When the statewide tax takes effect next year, consumers will likely be responsible for paying both taxes, according to our discussions with people familiar with the matter. If the local tax passes, Ozark will not be eligible to receive portions of the state tax revenues starting next year.
Once the statewide tax takes effect next year, the state will share the revenue in the following way: 50% of the taxes will go to the state general fund, 25% will go to county governments, and 25% will be distributed to local municipalities. However, the amount distributed to local governments will depend on the size of the population. For example, Birmingham and Jefferson County would get a much larger share of the revenue than a smaller town or county. If a local municipality has a tax in place before October 1, 2025, it will not receive funds from the state taxes collected.
We have reached out to local vape shops for comment on how the proposed measure may impact their business, and once they return our calls, we will update this article with more information.
