Vapers in Pennsylvania won a small, but important victory last week at the Pennsylvania Commonwealth Court. Since 2016, Pennsylvania has levied a 40% tax on electronic cigarettes and vapor products. East Coast Vapor, a Pennsylvanian vape shop, brought the tax to trial on the grounds that most vaping products lack tobacco, the defined product subject to the excise tax.
Judge Renee Cohn Jubelirer, who wrote the opinion, found that while nicotine and vaping liquids are subject to the tax, the component parts such as devices should not be. For consumers and businesses, this distinction is important. According to the court, this distinction adds up to a lot of over-collected tax revenue. For East Coast Vapor, the plaintiff, it was $28,000 in over-collected taxes on products consumers are using to quit smoking traditional cigarettes. Moreover, the decision allows users to buy parts separately and assemble the product themselves to avoid paying the onerous and unnecessary tax. Vapor products can be assembled by consumers and sold in many parts, including a cartridge for the liquid, batteries, etc.
Unfortunately for vapers, the presiding panel of judges decided that the tax still continues apply to many vape products. Judge Jubelirer concluded that the nicotine found in vaping products generally comes from tobacco. In a misguided assessment about vaping, she found that the tax intends to discourage addictive smoking habits for public health benefits and noted that the state has a legitimate authority to tax vaping products for causing addiction similar to smoking. Perhaps ignored was the fact that while nicotine may be addictive, vapor products deliver it without 95% of the risk of cigarettes.
Jubelirer noted that if self-assemblage becomes a measure to avoid the tax, the Pennsylvania Revenue Department could lobby Pennsylvanian lawmakers to pass a law that taxes individual parts as well. Until then, however, vapers should enjoy this partial, but significant win.