The budget deal awaiting a final vote in Indiana today includes the state’s first-ever tax on e-cigarettes. Both the House and Senate had floated an extra 10 percent sales tax on e-liquids, but the final bill jacks that up to 15 percent. Prepackaged closed-pod cartridges like Juul will be taxed at 25 percent at the wholesale level.
Health advocates say the plan meets their goal of a tax rate comparable to the rate on traditional
cigarettes, according to WIBC.com. Indiana State Medical Association president Roberto Darroca says doctors are
particularly concerned about discouraging teenagers from taking up vaping so they don’t get a
taste for nicotine and move on to traditional cigarettes.
The Senate had flirted with the idea of taxing closed-pod cartridges based on the amount of liquid
they contained. Darroca says that would have been a mistake, and says negotiators did the right
thing in basing the taxes on price. Because pod cartridges contain a fraction of the liquid sold for
open systems, Darroca says a volume tax would have blown up the goal of making the vaping tax
comparable to taxes on traditional tobacco products.
The Indiana Chamber had gone farther, blasting the volume-based tax as worse than doing
nothing. President Kevin Brinegar says the Chamber supports the final version as a “big step” for
public health, though he and Darroca both say they’re disappointed the Senate blocked a
proposed cigarette tax hike.