In a recent decision, Global Hookah Distributors, Inc. (2025), the First District Court of Appeal for the State of Florida upheld a prior ruling from the Division of Alcoholic Beverages and Tobacco (the “Division”). The ruling had denied Global Hookah Distributors, Inc. (the “Taxpayer”) a refund claim for tobacco excise taxes it paid on hookah product sales from 2016 to 2019. The Taxpayer challenged the Division’s ruling arguing that hookah does not fit within the definition of Other Tobacco Products that are subject to Florida’s tobacco excise tax. The Court rejected this argument and adopted the Division’s position that hookah is a form of “loose tobacco products suitable for smoking”, making it subject to excise tax.
Background on Florida’s Definition of Taxable Tobacco Products
Florida Statute Section 210.25(12) defines tobacco products to include the following items:
- Loose tobacco suitable for smoking
- Snuff
- Snuff flour
- Cavendish
- Plug and twist tobacco
- Fine cuts and other chewing tobaccos
- Shorts
- Refuse scraps
- Clippings, cuttings, and sweepings of tobacco
- Other forms of tobacco prepared in a manner suitable for chewing
You may notice that hookah is not explicitly mentioned in the definition of tobacco products. However, the Division’s position is that hookah is a form of loose tobacco suitable for smoking. Florida Courts have previously considered the meaning of this undefined term, but not in the context of hookah products.[1]
The Florida District Court’s Reasoning for Including Hookah as a Taxable Tobacco Products
In agreeing with the Division, the Court relies on a couple of points to determine hookah is a form of loose tobacco suitable for smoking. The Court first rejected the Taxpayer’s argument that hookah differs from other forms of loose tobacco, such as filler, because it is mixed and bound with other agents to make a finished product. Rather, the Court emphasized that hookah involves several pieces of tobacco, including tobacco leaves and veins, that are apparent in the finished product.
The next issue the Court considered was whether hookah is “suitable for smoking.” The Taxpayer highlighted a distinction between hookah and other forms of smoking tobacco—that the tobacco does not burn or combust. Instead, hookah heats the tobacco until it smolders and allows the user to inhale the nicotine vapor it emits. Unpersuaded by this distinction, the Court focused on its belief in the overall purpose of tobacco taxes having more to do with regulating the nicotine-absorption activities. The Court used this commonality to determine that Hookah fits within the definition of loose tobacco suitable for smoking.
The Takeaway for Distributors and Retailers of Hookah and Other Tobacco or Nicotine Products
As new tobacco-related and nicotine products enter markets in Florida and elsewhere in the United States, the applicability of tobacco excise taxes as currently written will continue to be a point of discussion with the potential for dispute. Recently, the Florida Legislature introduced HB 785 to further clarify the inclusion of hookah and similar items in the definition of tobacco products subject to excise tax. If passed, the bill would amend the definition to include “heated tobacco products”, which the bill defines as follows:
“A product containing tobacco which produces an inhalable aerosol by heating tobacco without combustion of the tobacco or by the heat generated by a combustion source that only heats rather than burns the tobacco.”
We will continue to monitor the status of this bill over the 2025 legislative session and other policy changes that could affect the taxation of tobacco and nicotine-related products.
Meet with a Tobacco Tax Professional
If you have questions or concerns about tobacco excise taxes to your products, our team of professionals are here to help. We have decades of collective experience helping businesses with their tobacco excise tax problems at all levels of operation—from manufacturers and importers all the way to distributors and retailers. Contact us today to schedule a meeting about your company’s audit defense or tobacco tax litigation needs.
[1] See Grabba-Leaf, LLC v. Dep’t of Bus. & Prof’l Regulation, 257 So. 3d 1205 (Fla. Dist. Ct. App. 2018) and Brandy’s Prods., Inc. v. Dep’t of Bus. & Prof’l Regulation, 188 So. 3d 130 (Fla. Dist. Ct. App. 2016).
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