As nineteen states begin the 2015 legislative session this week, a hot topic of debate will be what to do about a new innovative technology that is gaining popularity among smokers looking for a way to quit. Electronic cigarettes (e-cigarettes) and vapor products have grown to a 2.5 billion dollar industry over the past few years, a concern for big government folks who want a piece of the action.
As the Food and Drug Administration (FDA) and Democrats figure out how to regulate and tax the products, states haven’t sat around waiting to see what happens in Washington, D.C.
Countless pieces of legislation in 2014 lumped e-cigarettes and vapor products into a the taxable category of “other tobacco products.” This would have subjected them to taxes as high as 95 percent of wholesale cost, which is how they are taxed in Minnesota. Every single one of the 2014 bills failed with the exception of one signed into law in North Carolina, which imposed a much smaller (but higher than present law) tax of 5 cents per mL of liquid per product (about 2.5 cents per e-cigarette).
E-cigarettes have been found to be far less harmful than traditional tobacco cigarettes. These products don’t contain tobacco. That’s precisely why e-cigarettes should not be subjected to the same level of taxation as cigarettes, cigars, or any other type of smokeless tobacco. Tax increases that raise the price of e-cigarettes for consumers will discourage smokers from switching, an illogical act for anyone concerned about public health. State budget shortfalls fueled by overspending problems should never justify tax increases that will hurt decades of efforts to curb smoking in the United States.
Unfortunately, at least seven states already have bills pre-filed or drafted that would raise taxes on e-cigarettes. The governors of Washington and Utah have included tax hikes on the products in their official budgets to the legislature. The Attorney General of Indiana is pushing the legislature to raise taxes as well. Americans for Tax Reform opposes all tax increases and will work to defeat them as they arise.
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