Edgar Domenech, former New York City Sheriff, said in an interview that New York’s proposed nicotine pouch tax would fuel an illicit market by pairing high taxes with opportunities for illegal sellers, undermining public safety and lawful businesses.
The governor’s latest budget proposed applying the state’s existing tobacco tax framework to nicotine pouches, including a 75% excise tax similar to the levy on other non-cigarette tobacco products.
The proposal to tax tobacco-free nicotine pouches has drawn criticism from law enforcement veterans and business leaders who say it could repeat past patterns of illicit trade growth in the state. Lawmakers are considering measures that define “nicotine pouch” and impose a new state tax on selected nicotine products. Opponents argue that treating pouches like cigarettes risks repeating New York’s long pattern of growth in illicit nicotine markets after new taxes, according to legislative records.
“New York is the capital of the illicit tobacco market, and that is a direct consequence of decades of high taxes, paired with relaxed law enforcement,” said Domenech at a press conference. “Over 50% of cigarettes consumed in this state are smuggled or sold illegally.”
“This illicit activity finances organized crime groups, criminal enterprises and creates violence which is destroying the quality of life in our communities, so it is not a victimless crime as it has been portrayed,” said Domenech. “New York’s history is very clear on this matter, every time New York raises taxes on tobacco products, the black market grows and wins. The only losers are the citizens of New York.”
Rutgers Health researchers found that New York City’s high cigarette taxes have fueled illicit trade. In a 2023 survey of 252 littered cigarette packs across all five boroughs, only 16.6% had the required city tax stamp—down from 39.3% in 2011 and 23.7% in 2015. The study warned that this leakage reduces revenue, strains enforcement efforts, and disadvantages compliant retailers according to Rutgers Health.
Several officials and business leaders have also publicly opposed the proposed tax. Assemblywoman Michaelle Solages said creating a new tax is not the correct way to curb youth use and cautioned it would burden low-income communities. Paul Zuber, executive vice president of the Business Council of New York State, said increasing taxes to match those on tobacco products could create a black market according to Spectrum News.Â
The Tax Foundation reported that planned increases run counter to best practices because excise taxes should reflect relative harm; raising taxes on less harmful products could discourage smokers from switching to lower-risk alternatives.
Domenech has experience in tobacco enforcement as well as broader law enforcement roles; Georgetown lists him as a former Sheriff of New York City and former senior official at the Bureau of Alcohol, Tobacco, Firearms and Explosives—including Deputy Director/COO and special agent in charge according to Georgetown University.
