Nicotine Product Seller Presses for Texas Tobacco Tax Carveout

Nicotine pouches and lozenges shouldn’t be subject to Texas tobacco taxes even though the chemical ingredient is derived from the plant, a R.J. Reynolds business told the state’s supreme court.

RJR Vapor Co. LLC is suing Texas officials to recover tobacco taxes it paid on sales of these products. Under Texas law, the tax applies to products made of tobacco or a tobacco substitute, RJR Vapor Co. LLC said in a Feb. 21 legal brief.

The company sold nicotine pouches and lozenges under the brand name VELO.

“To be sure, they do contain nicotine isolate, but nicotine isolate is ...