Indiana is One Step Closer to Taxing Vapor Products

Indiana is a little closer to placing a tax on vapor products for the first time at $1.56 for a two-pod package. The U.S. state’s legislature also hope to the tax on combustible cigarettes to $2 a pack. A preliminary estimate projects the increase would bring in $278 million.

The committee had put off a vote Monday to draft language specifying 40 percent of the money raised — an estimated $112 million — would go to Medicaid, according to Inside Indiana Business. Crown Point Republican Julie Olthoff, the bill’s author, says smoking-related health problems cost Medicaid more than five times that much.

Indianapolis Democrats Robin Shackleford and Greg Porter still voted no. They want all the money earmarked for a new public health fund. Republicans say there’s a separate bill addressing that. Committee chairman Brad Barrett (R-Richmond) notes both bills are headed for the tax-writing House Ways and Means Committee, which will decide where the money goes in the context of the full budget. He says the health committee vote puts the panel on record as urging that the money be spent on health, not just dumped into the state’s general fund.

Brookston Republican Don Lehe also voted no.

Even if the full House passes it, the bill faces a tougher climb in the Senate. In the last five years, senators have killed three bills to either raise the cigarette tax or tax e-cigarettes.