Illinois tax hike on tobacco and vape products set to take effect July 1
Some worry tax hike on vapes, other nicotine products in Illinois will keep people smoking
Some worry tax hike on vapes, other nicotine products in Illinois will keep people smoking
Some worry tax hike on vapes, other nicotine products in Illinois will keep people smoking
Starting next week, it will cost people in Illinois a little more to feed their nicotine habit — whether they feed that habit through cigarettes or other means.
Taxes on vapes, nicotine pouches, and other tobacco products will increase in Illinois July 1.
Right now, it is not exactly clear how the tax will be passed onto the consumer. But vaping products and popular Zyn pouches will now be subject to a 45% tax — up from 15%.
Nicotine pouches like Zyn are seen by some as a safer alternative to cigarettes. But while they run about $8 per tin at a Chicago Loop convenience store now, the new tax could make that figure jump effective July 1.
"It's also going to generate $29.7 million worth of revenue for the State of Illinois," said Illinois state Sen. Javier Loera Cervantes (D-Chicago).
Cervantes, a former cigarette smoker himself, sponsored the bill to raise taxes on everything from cigars and chewing tobacco to vapes and nicotine pouches to 45% — which is in line with cigarettes. Cigarette taxes in Illinois are going up too, by $1 per pack.
"Nicotine is still negatively affecting the health of our residents," said Cervantes. "We're trying to hopefully get people away from tobacco products."
But Dr. Brian Erkkila, director of regulatory science for Swedish Match, North America — the company that manufactures Zyn — said he is afraid the tax could have the opposite effect.
"We're just worried this tax increase could keep people smoking," Erkkila said. "When you raise the price of these smoke-free options, these better alternatives, it's harder for them to get those — and they may just stick with their cigarettes."
After a steady decline in cigarette smokers in America, tobacco giant Phillip Morris International bought the company that makes the extremely popular Zyn pouches.
"There's a history of tobacco companies misleading the public about the health harms of their products," said Kristina Hamilton, Illinois advocacy director of the American Lung Association.
Hamilton said there are seven FDA-approved products to help smokers quit, and nicotine pouches are not one of them.
"There is no evidence that these newer smokeless products have had that impact of helping people overcome their addiction to tobacco products," said Hamilton. "These products still contain harmful chemicals."
The Illinois Fuel & Retail Association, which represents gas stations in Illinois, is concerned that the vape, pouch, and tobacco tax could send some potential customers across state lines.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
38 minutes ago
- Yahoo
Can a Roth IRA be used for college?
Both a Roth IRA and a 529 Plan are valid ways to save for a college education. Each has unique benefits and limitations. Starting in 2024, unused funds in a 529 account may be converted into a Roth IRA if the investor so chooses, though there are pros and cons. Families should carefully assess which type of account will give them the most benefit. Some people decide to leverage both for college savings purposes. A Roth IRA can be used as a savings vehicle for college. You can withdraw your Roth contributions at any time without penalty to pay for any expense, though there may be associated taxes on any earnings. You can also use Roth earnings without penalty to cover qualified education expenses, such as tuition and fees. Before you use a Roth IRA for college, it's a good idea to be aware of the advantages and disadvantages so you can assess whether it makes sense for you and your family. Be aware that, in some cases, a 529 plan may be a better fit for your circumstances. While they're not specifically designed for college savings, Roth IRAs can be used to pay for a college education. Roth IRA accounts are funded with after-tax dollars and grow tax-free, and money can be withdrawn for educational purposes without a penalty — though you'll still have to pay income taxes. With that said, there are contribution limits for this type of account. In 2024, those who meet income requirements to contribute to a Roth IRA can contribute up to $7,000 across a Roth and a traditional IRA. The exception is individuals who are age 50 or older, who can contribute an additional $1,000 per year in what is known as a 'catch-up contribution.' Keep in mind that if your modified adjusted gross income (MAGI) exceeds $146,000 for heads of household or $230,000 for married couples, you will be subject to reduced annual contribution limits. These limits are assessed annually by the IRS and tend to fluctuate each year. Roth IRA withdrawal rules are considerably different from rules that apply to other retirement accounts. Because Roth IRA accounts are funded with after-tax dollars, account owners can withdraw their contributions (but not their earnings) before the standard retirement age of 59 ½ without paying any taxes or penalties. The Internal Revenue Service (IRS) typically charges a 10 percent penalty on distributions that include earnings before retirement age. However, it provides several important exceptions for Roth IRAs, including distributions to pay college tuition. Parents who withdraw earnings for college costs will have to pay income taxes on the amount but not an added fee. For parents who are making withdrawals after the age of 59 ½, no penalties apply, regardless of whether the funds are being used for college or not. However, the longer a parent is able to leave funds parked in investments, the more these savings can grow. While distributions taken from a Roth IRA account are tax-free, distributions are counted as untaxed income on the following year's Free Application for Federal Student Aid (FAFSA). In other words, using a Roth IRA for college can reduce eligibility for need-based aid. However, the impact depends on the amount of money withdrawn and which year of school the distribution is made. If you're on the fence about making a Roth IRA education withdrawal, consider the advantages and disadvantages that could apply to your situation. Using a Roth IRA for college can reduce reliance on student loans. Parents who want to help their children avoid student loan debt can use Roth IRA funds to lessen the burden of borrowing. Roth IRAs can be invested for long-term growth. Money invested in a Roth IRA can be invested in stocks, bonds, ETFs, index funds and more, giving you plenty of options to customize your investment. You get tax-free growth. Since Roth IRAs are funded with after-tax dollars, the money can grow tax-free over time. There is no penalty for education-related withdrawals. As long as the funds are used for education-related expenses, you won't be penalized for withdrawing money from a Roth IRA. Using a Roth IRA cuts into retirement savings. If you use too much of your Roth IRA funds to cover higher education expenses, you may fall behind on retirement goals. Roth IRA accounts can lose money. Stocks, bonds and other investments are also at risk of losing money. This means that you could have less saved than you started with, depending on your timeline. Financial aid could be impacted. Distributions from a Roth IRA will count as income on the FAFSA, which may reduce your child's need-based financial aid eligibility. You'll be subject to income and contribution limits. Unlike with other savings vehicles, you won't be able to contribute to a Roth IRA if you exceed the income threshold. You can also contribute only $7,000 or $8,000 a year, depending on your age. Learn more: Check out our FAFSA guide Before using a Roth IRA plan for a college education, you may also want to consider a 529 college savings plan. A 529 plan is a type of investment account specifically designed for a college education, which grows your contributions on a tax-deferred basis. There are some significant advantages that come with saving for college in a 529 plan over a Roth IRA, although some of the benefits depend on your situation. Detail Roth IRA 529 Plan Eligibility Restrictions apply past a certain income threshold No income restrictions Tax deductibility No Yes, in some states Tax-free withdrawals Yes, though earnings may be taxed as income Yes, tax-free and penalty-free Annual contribution limit $7,000; $8,000 if age 50 or older No federal limit; varies by state, but generally with higher caps than a Roth IRA Holding period Account must be open for 5 years before a withdrawal can be made None Impact on financial aid May impact need-based aid eligibility; withdrawals count as income May or may not impact need-based aid; withdrawals are not counted as income Penalty-free uses of invested funds Retirement savings, first-time home purchase, qualifying birth or adoption expenses, qualifying emergency expenses or disaster relief, education Tuition for K-12 education, post-secondary tuition, qualifying education-related expenses (such as textbooks, computers, room and board) Bankrate insight In general, a Roth IRA is best for savers who aren't sure how much their child will need for college. A 529 plan is better if you need to put away more money at once. Although the primary purpose of a Roth IRA is to help you save for retirement, you can also use it to save for college. But using Roth IRA funds to cover college expenses has a few drawbacks — for example, using them for education can cut into your retirement savings. Before you use a Roth for education, consider whether using a 529 instead makes more sense for your financial situation. Alternatively, you may decide that using both to save for college is best for your family. If you are unable to save enough to cover college between a 529 plan and a Roth IRA, investigate federal student loans before taking out a private student loan. Can you convert a Roth IRA to a 529? 'Yes, all or part of a Roth may be converted to a 529,' says William Bevins, a certified financial planner (CFP) and certified trust and fiduciary advisor (CTFA) based in Franklin, Tennessee. Converting a Roth IRA to a 529 requires you to withdraw money from your Roth and use it to fund a 529. But before you do this, you should understand some potential drawbacks. 'The primary reason for building a Roth is to reap the reward of tax-free retirement growth down the road,' Bevins says. 'Making early withdrawals can limit the advantage of having one.' Bevins recommends contacting a tax advisor for help determining if this move makes sense for you. Is there a limit to how often you can draw from a Roth IRA? No, there's no limit. You can make withdrawals from your Roth at any time. Withdrawing your Roth IRA contributions doesn't have any tax consequences; however, you might have to pay income taxes on withdrawn earnings.
Yahoo
38 minutes ago
- Yahoo
KBH Q2 Deep Dive: Lower Guidance and Market Headwinds Shape 2025 Outlook
Homebuilder KB Home (NYSE:KBH) reported revenue ahead of Wall Street's expectations in Q2 CY2025, but sales fell by 10.5% year on year to $1.53 billion. On the other hand, the company's full-year revenue guidance of $6.4 billion at the midpoint came in 2.4% below analysts' estimates. Its GAAP profit of $1.51 per share was 2.7% above analysts' consensus estimates. Is now the time to buy KBH? Find out in our full research report (it's free). Revenue: $1.53 billion vs analyst estimates of $1.51 billion (10.5% year-on-year decline, 1.6% beat) EPS (GAAP): $1.51 vs analyst estimates of $1.47 (2.7% beat) Adjusted EBITDA: $144.9 million vs analyst estimates of $164.2 million (9.5% margin, 11.8% miss) The company dropped its revenue guidance for the full year to $6.4 billion at the midpoint from $6.8 billion, a 5.9% decrease Operating Margin: 8.8%, down from 11.4% in the same quarter last year Backlog: $2.29 billion at quarter end, down 26.7% year on year Market Capitalization: $3.82 billion KB Home's second quarter results for 2025 were met with a negative market reaction, as several evolving market headwinds weighed on performance. Management pointed to subdued demand during the spring selling season, with CEO Jeffrey Mezger citing that "affordability challenges have persisted compounded by the variability in mortgage interest rates, which remain elevated as well as macroeconomic and geopolitical uncertainty." Operationally, the company highlighted faster build times and reduced direct costs as partial offsets, but acknowledged that consumer caution and higher resale inventory pressured new order volumes and operating margins. Looking ahead, KB Home's reduced full-year guidance reflects management's expectations for continued softness in homebuyer demand and ongoing margin pressures. The company aims to align its cost structure with lower volumes, while maintaining flexibility to adjust pricing and production pace by community. President Rob McGibney noted that "our strategy focuses on delivering the most compelling value and improving affordability with transparency," but also acknowledged the risk of continued demand weakness if mortgage rates and consumer confidence do not improve. Management signaled an intent to prioritize operational efficiency and shareholder returns as they navigate this uncertain environment. Management attributed second quarter performance to faster build times and cost controls, but noted that consumer confidence and affordability remain key challenges impacting order flow and revenue outlook. Build times improved: The company reduced average build times by 7 days quarter-over-quarter, returning to pre-pandemic levels. Management believes this operational gain allows for quicker inventory turnover and the ability to close more homes within the year, supporting delivery targets even as demand softens. Sales strategy adjustments: KB Home shifted away from offering incentives and instead focused on adjusting base pricing at the community level. While this approach drove strong net orders in March, management reported a decline in April and May as consumers grew more apprehensive about the economy and mortgage rates. Community opening delays: Delays in municipal approvals for new communities pushed back several planned openings, which management estimates cost 'a couple of hundred' net orders in the quarter. They are now emphasizing better coordination with local authorities to mitigate future disruptions. Cost reduction efforts: Direct costs per home started in the quarter were 3.2% lower year-over-year, driven by value engineering, supply chain negotiations, and simplified studio offerings. However, savings were partially offset by higher land costs and reduced pricing power. Land investment moderation: The company scaled back new land spending and canceled contracts for roughly 9,700 lots that no longer met return criteria. Management stated that this measured approach is intended to preserve flexibility and align future community growth with evolving market conditions. Management expects near-term performance to be shaped by cautious consumer sentiment, affordability pressures, and disciplined cost management strategies. Sustained affordability challenges: Elevated mortgage rates and higher resale inventory continue to weigh on buyer confidence, leading management to anticipate subdued order volumes and a slower absorption pace in the coming quarters. The company's pricing strategy remains flexible in response to local market dynamics. Margin and cost discipline: Operating margins are expected to be pressured by reduced pricing power, less favorable regional mix, and higher land costs. Management is targeting further reductions in build times and overhead expenses to help offset these headwinds and maintain profitability. Shareholder return focus: With lower land investment planned for the remainder of the year, KB Home intends to accelerate share repurchases, supported by a strong balance sheet and liquidity. Management views this as a means to enhance earnings per share and return on equity in a challenging market backdrop. In the quarters ahead, the StockStory team will monitor (1) the pace of net order recovery as consumer sentiment and mortgage rates evolve, (2) the company's ability to sustain further reductions in build times and direct costs, and (3) the effectiveness of its strategy to moderate land investment while maintaining a robust pipeline for future community growth. Execution on pricing flexibility and inventory management will also be important indicators of operational resilience. KB Home currently trades at $52.87, in line with $53.36 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it's free). Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
39 minutes ago
- Yahoo
RITM Q1 Deep Dive: Asset Management Inflows and Mortgage Servicing Offset Revenue Decline
Real estate asset manager Rithm Capital (NYSE:RITM) missed Wall Street's revenue expectations in Q1 CY2025, with sales falling 31.9% year on year to $565.8 million. Its non-GAAP profit of $0.52 per share was 11.3% above analysts' consensus estimates. Is now the time to buy RITM? Find out in our full research report (it's free). Revenue: $565.8 million vs analyst estimates of $871.8 million (31.9% year-on-year decline, 35.1% miss) Adjusted EPS: $0.52 vs analyst estimates of $0.47 (11.3% beat) Market Capitalization: $5.95 billion Rithm Capital's first quarter results showed a sizable year-over-year revenue decline, missing Wall Street's top-line expectations. Management pointed to ongoing market volatility as a factor influencing performance, but highlighted continued strength across all business lines. CEO Michael Nierenberg emphasized the company's ability to manufacture, originate, and service assets, noting that the mortgage servicing platform remained a core differentiator. The quarter also saw solid progress in asset management, as Sculptor's Real Estate Fund V achieved a record level of commitments. Nierenberg acknowledged the 'market volatility plays well into the strengths and disciplines of our organization,' attributing resilience to the experience of Rithm's investment teams. Looking forward, Rithm Capital's strategy hinges on expanding its asset management platform, growing off-balance-sheet capital, and deepening partnerships with institutional investors. Management expects continued demand for asset-backed finance (ABF) products and sees opportunities in new verticals such as energy and infrastructure. Nierenberg stated, 'Our value prop is the following: Results first, our investment professionals and teams are best-in-class across all of our investment businesses.' The company also indicated that it is actively evaluating structural changes, including a potential public listing of its Newrez mortgage business or other capital actions, with the goal to 'unlock shareholder value' by the end of 2025. Management attributed the quarter's performance to a combination of stable servicing income, active fundraising in asset management, and disciplined loan origination amid competitive pressures. Asset management inflows: The Sculptor business delivered $1.4 billion in gross inflows, with its Real Estate Fund V reaching $3.2 billion in commitments, marking the largest such fund in its history. Management noted that expanding fundraising momentum is crucial for future growth. Mortgage servicing platform scale: Newrez remained a top U.S. mortgage servicer, managing a portfolio of $845 billion, including both owned and third-party servicing. The company added four new third-party clients and maintained a 98% client retention rate since 2015. Disciplined loan origination: Amidst a competitive environment and margin compression, Rithm prioritized profitability over market share growth in its mortgage origination activities. Funded volume increased 9% year-over-year, but management avoided 'chasing market share,' focusing instead on return on equity. Expansion of product offerings: Rithm continued to roll out asset-backed finance (ABF) funds and invested $1.5 billion in non-qualified mortgage (non-QM) loans, residential transitional loans, and other asset-backed securities. The company also highlighted the upcoming launch of mortgage servicing rights (MSR) funds to meet growing investor demand for long-dated, cash-flow-oriented products. Strategic M&A and structural options: Management discussed an active mergers and acquisitions pipeline, particularly in credit and asset management, and is considering structural changes such as a public listing or externalization of certain business units to address what it perceives as a persistent undervaluation in public markets. Management sees growth in asset management, new fund launches, and capital structure optimization as key themes for the remainder of the year. Fundraising and partnership expansion: Rithm aims to grow its asset management platform by increasing fundraising efforts in real estate, credit, and ABF funds, with a focus on building long-term partnerships with institutional investors. Management believes deeper relationships will support more stable capital inflows across market cycles. Potential structural changes: The company is evaluating options such as a public listing or externalization of Newrez, as well as shifting to a C-Corp model. These moves could help close the gap between Rithm's book value and its current market valuation, and management hopes to announce a significant capital action by the end of 2025. Market-driven asset acquisition: Rithm expects continuing market volatility to create opportunities for attractive asset purchases, particularly in non-QM mortgages, residential transitional loans, and energy/infrastructure investments. Management's approach centers on disciplined risk management and capital allocation to maximize long-term returns. In the coming quarters, the StockStory team will monitor (1) the pace and scale of new fundraising in asset management and ABF products, (2) progress toward potential structural changes such as a public listing or business unit externalization, and (3) the impact of market volatility on loan origination, asset purchases, and servicing growth. Execution in these areas will be critical for Rithm's long-term trajectory. Rithm Capital currently trades at $11.22, down from $11.67 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it's free). Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
