25% Wholesale Vapor Tax Clears Indiana Senate Hurdle

A bill in Indiana that will bring new taxes on vaping as well as a broad framework for disbursing future opioid litigation settlement cash is expected to be signed into law by Governor Eric Holcomb, today. It’s Indiana’s first-ever tax on e-cigarettes.

The tax, which will take effect July 1, 2022, is split between wholesale and retail, with closed-system products like prefilled pods assessed 25 percent of the wholesale cost, and open-system products like bottled e-liquid being taxed at 15 percent of the retail price (a sales tax).

A previous version proposed a 10 cent-per-milliliter tax on vaping fluid and an additional 10 percent percent excise tax on e-cigarettes and vaping products.

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.