Design tiered tax rates for electronic cigarettes (ECS) based on their appeals to youth and young adults

The National Cancer Institute awarded The Ohio State University $662,436 on August 14, 2026, under the Cancer Cause and Prevention Research program (CFDA 93.393) to design tiered tax rates for electronic cigarettes based on their appeals to youth and young adults.

The project addresses evidence gaps in electronic cigarette taxation policy. Specifically, it examines how tiered excise taxes—which impose higher tax rates on electronic cigarettes with youth-appealing features such as flavor, product type, and nicotine concentration—can reduce use among adolescents and young adults while minimizing unintended consequences such as increased adult cigarette smoking. The work also evaluates whether tiered taxes outperform product bans in reducing cross-border purchasing and illicit trade.

The award funds research performed in Columbus, Ohio, with a period of performance through July 31, 2031. This is a Project Grant, a form of assistance commonly used by the National Cancer Institute for investigator-initiated cancer research.

Abstract

In 2023-2024, 1.6 million or 5.9% of US school students, 15.5% of young adults aged 21-24, and 6.5% of adults aged 18 or older reported using electronic cigarettes (ECS), a group of nicotine products that are potentially less harmful than cigarettes but still cause addiction. To regulate ECS, excise taxes, which are widely considered the most effective and cost-effective tobacco control policy, have increasingly been adopted by many states and localities in the US. However, several EC taxation-related knowledge gaps remain unaddressed, hindering evidence-informed policymaking: 1) there is a debate over how best to design EC taxes to balance the intended effects (reducing EC use among adolescents and young adults or ayas) and unintended consequences (increasing adult smoking) of these taxes. One underutilized tax design that could achieve this goal is tiered taxes, which impose higher tax rates on ECS with AYA-appealing features (e.g., flavor, nicotine concentration, product type) than on other ECS. This design may disincentivize AYA EC use while keeping other ECS affordable for smokers who seek to quit smoking. 2) while the US food and drug administration and various states and localities have either implemented or considered EC bans based on product features, especially flavors and nicotine concentration, the effectiveness of these bans is likely undermined by cross-border shopping (i.e., purchasing banned products legally from neighboring states or localities) and the illegal market. Evidence is needed to determine whether tiered taxes based on AYA-appealing features outperform bans in terms of reducing cross-border shopping and illicit trade. Project goal: to address these knowledge gaps, this project will examine how tiered EC taxes that impose higher tax rates on ECS with AYA-appealing features (flavor, product type, nicotine concentration) impact nicotine and tobacco use and cross-border or illegal product shopping. This project will innovatively use volumetric choice experiments with randomization to conduct the following aims: 1) examine how tiered taxes on AYA-appealing features (flavor, product type, nicotine concentration) impact EC use and combustible tobacco smoking among current and susceptible AYA EC users; 2) assess how tiered taxes impact EC and combustible tobacco smoking among adult smokers who either use or are open to using ECS; and 3) compare tiered EC taxes with sales bans in their impacts on tobacco use, cross-border shopping, and illegal EC purchases. These aims will be examined using novel volumetric choice experiments that allow for the multiple use of various EC types and other tobacco products and are further embedded in nationally representative surveys of AYA EC current and susceptible users aged 15-24 and adult smokers aged 18+ who are using or open to using ECS. This project will provide critical evidence to inform policymakers at the federal, state, and local levels about how to design tiered EC taxes to promote population health. IT addresses multiple national institutes of health research priorities by informing lifestyle interventions to reduce nicotine and tobacco use - the leading modifiable risk factor for cardiovascular disease, cancer, and other chronic conditions.