Category: Taxation

Boulder, Colorado: 40% Vapor Tax Begins Today
Credit: Alexander Mills
All vaping products sold in the U.S. city of Boulder, Colorado will be subject to an additional city sales and use tax of 40 percent. City leaders say its part of an effort to curb use among young people.
Nearly 80 percent of voters approved the additional tax last November. It applies to any refill, cartridge and component of an electronic smoking device, according to a story by CBS4 in Denver.
Additional measures to curb youth tobacco use were passed by City Council in 2019, including:
Raising the age to purchase to 21 for vaping and tobacco products
Limiting any one retailer from selling more than two electronic cigarettes or four associated products including refills to any one person in any 24-hour period
Banning the sale of flavored vaping products (with a temporary exception for menthol-flavored products)
Restricting the ability to sell menthol-flavored vaping products only to businesses that have 21 and over age restrictions for entry until Dec. 31, 2019. After Jan. 1, 2020, the sale of menthol flavored electronic cigarettes in the city of Boulder is completely prohibited.
July 1, 2020
Vapers in Georgia to pay 7% Excise Tax

Credit: Dawid Cedler
Georgia’s General Assembly passed a measure Friday to authorize the taxation of vapor products. The bill also contained language that raises the U.S. state’s minimum age to vape or smoke cigarettes from 18 to 21.
The measure slaps a 7% excise tax on vaping products sold in Georgia like e-cigarettes, vape pens, refillable cartridges and electric hookahs, according to an article in the Athens Banner-Herald.
The vaping tax was added to a separate bill that raises the minimum age to use tobacco and vape products to 21. The bill passed by a 45-8 vote in the Senate Friday after the state House passed it by a 123-33 vote on Thursday. It now heads to Gov. Brian Kemp for his signature.
Vaping manufacturers and store owners had opposed the excise tax and new licensing rules in Rich’s proposal, arguing higher prices on vaping could drive smokers back to cigarettes after using the tobacco-less products to kick the habit.
June 29, 2020
Michigan Adds Vapor Tax, Allows Flavored E-Liquids

Credit: Pasja 1000
The Michigan Senate approved a six-bill package Wednesday that would impose an 18 percent tax on e-liquids. If signed into law, it specifically would allow individuals to sell flavored vaping products.
Gov. Gretchen Whitmer attempted last year to make Michigan the first state in the nation with a ban on flavored vaping products out of concern for youth usage. But the courts eventually paused the ban after businesses filed a legal challenge, according to an article on detroitnews.com.
The new legislative package, which gained the backing of the Republican-controlled Senate, would set up an enforcement and licensing system for shops that sell vaping products.
It would also change the age requirement for buying tobacco and vaping products from 18 years old to 21 in state law. President Donald Trump previously instituted a federal change to increase the age to 21 across the country.
“It’s regulated. It’s enforced,” Senate Minority Leader Jim Ananich, D-Flint, said about the bills, which he said would give adults the “choice one way or another” whether to use the products.
Ananich was one of the sponsors of bills in the package. He said it aimed to resolve a lack of clarity surrounding federal and state policy on vaping in Michigan. The legislation, which doesn’t affect marijuana vaping products, originally aimed to set the tax rate at 24 percent but lawmakers dropped the proposed rate to 18 percent before Wednesday’s vote.
June 19, 2020
Estonia Mulls End to E-Liquid Taxes

Photo: Skypixel | Dreamstime.com
Lawmakers have submitted a bill to Estonia’s Parliament that would stop the collection of excise duty on tobacco e-liquids for two years.
The legislators hope the measure will help to control the border trade and black market.
In the draft explanation, the bill’s authors note that stopping the collection of excise duty will give entrepreneurs an opportunity to cut the price of e-liquids and encourage the sale of legal products.
If passed, the legislation will enter into force on Dec. 1, 2020.
June 8, 2020
Opinion: Vapor Tax May Push Vapers Back to Cigarettes

Credit: Drei Kubik
A vapor tax increase will be included in the revised budget Gov. Gavin Newsom plans to submit Thursday. The tax would take effect January 1, 2021, and is projected to raise $32 million in revenue for fiscal 2021.
The new money would go toward administration, enforcement, youth prevention, and health care workforce programs, according to an article on thecentersquare.com.
The current tax on vapor products is 59.27 percent of the wholesale value. The new tax increases the rate to $2 for each 40 milligrams of nicotine per product. The governor’s budget summary also supports a statewide ban on all flavored nicotine products, including menthol cigarettes, which the Tax Foundation says would create unintended consequences.
Lung injury hospitalization cases linked to vaping in California totaled 199 as of Feb. 25, 2020, according to the Centers for Disease Control and Prevention. Among the 150 to 199 cases reported in California, four deaths were reported, according to the CDC.
According to a 2019 survey of high school students nationwide, 27.5 percent of students said they had vaped at least once 30 days prior to taking the survey; 10 percent said they considered themselves regular vapers.
A new analysis by Tax Foundation economist Ulrik Boesen points to unintended consequence if Newsom’s proposal is enacted. The price of the most popular vapor product, a JUUL 4-pack, would go up to $8.25, excluding the existing wholesale tax, more than quadruple the tax of $2.87 on a pack of cigarettes.
The tax increase could prompt users to switch from vaping to smoking, Boesen argues. The American Cancer Society Cancer Action Network Inc. is urging state legislators nationwide to increase tobacco taxes. Even if California did increase cigarette taxes, the hike would be less than that imposed on e-cigarettes.
“This inconsistency goes against the concept of harm reduction, which is the approach that it is more practical to reduce harm associated with use of certain goods than avoiding it completely through bans or punitive level taxation,” Boesen says. “In the context of vapor products and cigarettes, it is important because the risk profiles for the two products are wildly different. Public Health England, an agency of the English Ministry for Health, concludes that vapor products are 95 percent less harmful than cigarettes.”
May 14, 2020