Maryland Governor Vetoes Vapor Tax

The US state of Maryland’s Governor vetoed vapor tax legislation in House Bill 732. The vapor industry initially faced an 86 percent wholesale tax on all vapor products, which included devices and liquids.

The Maryland General Assembly spent a majority of the legislative session in search of new revenues to fill budget gaps and eventually turned its attention to vapor products, according to Tony Abboud, executive director for the Vapor Technology Association (VTA).

The VTA and the Maryland Vapor Alliance (MVA) engaged key committee members, participated in hearings, and worked behind the scenes to offer alternatives to the 86 percent tax, according to a press note. “After much debate, the General Assembly decided to move forward with a 12 percent point of sale tax on devices and liquids with an exception on containers under 5 milliliters, which would have a 60 percent wholesale tax,” the note states. “After the tax passed, VTA and MVA worked to educate the Governor’s Office on the adverse impact such a tax would have on Maryland small businesses.”

Governor Larry Hogan then vetoed the legislation. “These misguided bills would raise taxes and fees on Marylanders at a time when many are already out of work and financially struggling. With our state in the midst of a global pandemic and economic crash, and just beginning on our road to recovery, it would be unconscionable to raise taxes and fees now,” Hogan said.  
 
In Maryland, a three-fifths vote of the elected members of both chambers is necessary to override the Governor’s veto. Because there were several tax increases vetoed, there could be efforts in the General Assembly to override the veto, according to the VTA.