Indiana Cuts Vape Tax 40% Before New Tax Rules Start

The governor of Indiana signed a bill last week that included provisions cutting the 25 percent tax that wholesalers were to be charged for closed-system vaping devices to 15 percent.

State lawmakers approved the higher rate last year for Indiana’s first tax on electronic cigarettes to start in July 2022. But the Legislature approved the lower rate with seven lines included in a 118-page bill on mostly technical tax law changes.

Sen. Travis Holdman of Markle, chairman of the Senate’s tax committee chairman, said the vaping device tax change was made to bring it in line with the 15 percent rate set last year for refillable vaping products, according to the Associated Press. Holdman said the intention was to have all vaping devices and products taxed the same.

Bryan Hannon of the American Cancer Society said the vaping device tax should be at least 20 percent to achieve parity with Indiana’s 99.5 cents-per-pack cigarette tax.