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New Nicotine and Vape Taxes

by Shijin Vapor |

E-cigarettes have witnessed a sharp rise in tax by several states in the United States. This increase in Nicotine tax is attributed to the rise in the number of E-cigarette smokers in the country. Although they may not contain tobacco, they contain nicotine, which is derived from tobacco. The FDA, therefore, classifies E-cigarettes as tobacco products.

We shall look at the implication of this vape tax increase in the number of smokers in America. We shall also highlight the effect of the increase in Nicotine tax on people planning to quit smoking.

Oregon, Colorado, Baltimore, and Kentucky have led other states to impose an increase in Vape tax. The new Vape tax is expected to increase the prices of e-cigarettes per pod by about $1.50. Refillable e-cigarette containers are also expected to increase by 15% when sold at wholesale prices.

Aside from the increase in Vape tax, the FDA has also placed a partial ban on these flavored e-cigarettes products. This ban deters people from taking them.

Companies that have introduced the manufacture and sale of disposable e-cigarettes may also have to pay higher Vape tax, which may affect the products' overall price and demand. 

Oregon Measure 108, Tobacco and E-Cigarette Tax Passed

On Tuesday, the 3rd of November 2020, Measure 108 was passed in Oregon to increase Nicotine tax by about $2 for each pack. One of the strong advocates for an increase in Vape tax in Oregon is the American Cancer Society and Cancer Action Network. Society led other healthcare organizations to demand the passing of Measure 108 and believes that such an action will reduce tobacco use's negative effect in most families.

It also believed that Measure 108 would help save the lives of thousands of Oregonians because tobacco is seen as the primary cause of preventable death in the state.

Lawmakers in the state believe that increasing Vape tax in Oregon can help protect young people from a life of tobacco addiction. Studies show that youths who smoke e-cigarettes are more likely to migrate to smoking cigarettes.

Colorado Proposition EE, Tobacco and E-Cigarette Tax Increase Passed

Proposition EE is aimed at increasing the Nicotine tax to reduce the number of people taking these products. The Proposition EE measure was also proposed to set a minimum price for cigarettes.  Tobaccos or cigars are taxed at a 20% statutory rate of the MLP (Manufacturer's List Price). There is also a 20% constitutional rate of the MLP and a 40% total rate of the MLP. Before Proposition EE, no taxes were placed on nicotine products. Nicotine tax is expected to increase by 30% in 2021, while a 62% rate increase is projected in 2027.

Revenues from this vape tax increase are devoted to education and health programs, including the state general fund, rural schools cash, state educational fund, housing development fund, state education fund, etc.

Kentucky's Vaping "Sin" Tax Kicks Into Effect

Last February, Kentucky State Rep R- Louisville and Jerry Miller presented a tax amendment on the House Bill 32. The bill proposes an increase in Nicotine tax to reduce revenue it generates for the state. Ben Chandler, Healthy Kentucky foundation president, believes increasing Vape tax will discourage teens from purchasing these products. He believes that the tax increase will also reduce the general consumption of the products. 

But what effect does the Vape tax increase have on smokers in general? A recent study in Minnesota reports that increasing Vape tax would also increase the rate of smoking. It also reports that cessation smoking has reduced while adult smoking has increased tremendously.

Baltimore, Maryland Considers A Vape Tax

Brandon Scott, president of Baltimore City Council, has proposed a tax increase in electronic cigarettes. He believes this action was necessary to discourage e-cigarette smoking and increase revenue, mostly as the coronavirus's effect, is still felt. However, the council has set no specific tax rate as the finance and taxation committee has been saddled with the responsibility of considering the bill.

Anchorage, Alaska Passes Ordinance On Vaping Tax

Just last week the Anchorage Assembly passed an ordinance to including vape e-liquids and electronic vaping devices under the city's existing tobacco tax. This means that e-liquids and vape cartridges that are used in devices will be tax at 55 percent of the wholesale price. However, for some reason this ordinance will not include vaping devices sold by marijuana retailers.