Bewildering regulation? 45% excise tax and minimum age 19 proposed in Washington (state)

in the press

Mt

stateside one worldThe State House may have agreed on a plan to tax vapour products and liquid nicotine, and part of it involves raising the smoking age for traditional cigarettes to 19. House leaders say their goal is to keep high school students from getting addicted to nicotine, in all of its forms. Restricting sales of all nicotine products (from vapour pens to tobacco-burning cigarettes) to adults 19 and older will help accomplish that, said state Rep. Reuven Carlyle, D-Seattle.
“The fundamental goal of everybody at the table has been to get e-cigarettes and all tobacco-related products out of the high schools,” Carlyle said. “There’s a general agreement that this is a sensible way to go forward on that.” The House plan would limit sales of both vapor products and combustible tobacco products to those 19 and older. It also would impose a 45 percent excise tax on wholesale sales of e-cigarette cartridges and liquid nicotine bottles.
The House Finance Committee, which Carlyle chairs, plans to vote Monday (June 8) on one of the vapour product regulation billsRep. Paul Harris, R-Vancouver, said several House Republicans support the proposed tax, as well as raising the state’s smoking age. Both measures are part of a larger plan to regulate vapour product sales and packaging, he said. “I don’t look at this as a taxation issue as much as I do a health issue,” said Harris, who has been working to build Republican support for the plan. “All the reports say, is vaping better than smoking cigarettes? It is. Is it still a health hazard? Absolutely,” Harris said.
Tobacco Tax CartoonHarris estimated the proposed 45 percent tax would raise about $20 million during its first two years, after the effects of raising the smoking and vaping age are factored in. In about three or four years, though, the tax revenue would increase to about $120 million every two years, he estimated. Earlier this year, Democratic Gov. Jay Inslee had proposed taxing electronic cigarettes and vapour products at a higher rate of 95 percent, which is the same tax rate imposed on other tobacco products in addition to cigarettes, which are taxed at a per-pack rate. Another proposal from Rep. Gerry Pollet, D-Seattle, had proposed a 60 percent excise tax on vapour products.
Pollet said he thinks a 45 percent tax rate is a compromise that will still help deter young people from buying the products, while generating enough revenue to fund enforcement of stricter rules for vapor shops and manufacturers. He estimated a 45 percent tax on wholesale sales should translate to about a 23 percent increase in the price of e-cigarette liquids and cartridges at retail shops. “E-cigarettes will still be far cheaper than smoking regular cigarettes,” Pollet said, adding, “If you don’t raise the price a little bit, you just can’t reduce that youth market.”
The legislation also would require child-resistant packaging on liquid nicotine bottles and direct the Liquor Control Board to establish labelling rules regarding disclosure of a product’s ingredients and nicotine content, Pollet said. Unlike previous proposals, the plan now under discussion would not ban flavoured nicotine products, which critics said were designed to appeal mainly to children and teenagers. Nor would it tax vapour pens and other vapour smoking devices. Instead, it would only tax the cartridges and liquids used inside them, Pollet said.
The new plan would still prohibit online sales of liquid nicotine and other vapour products. Mt. Baker Vapor, a Bellingham operation that does much of its business online, has announced it plans to move its operations to Mesa, Arizona, due to the proposals now in the Legislature. “These bills are a clear existential threat to our business,” the business announced in a press release Tuesday. “While they have not yet been passed, we cannot continue effective operations with the constant threat they present hanging over our head.”

Screenshot 2015-06-08 at 08.42

Joe Baba, chairman and founder of the Washington Vape Association, said the proposed 45 percent excise tax on e-liquids and e-cigarette cartridges is still excessive and will hurt many businesses in the state. “It’s significant enough that it would put most of the vaping retailers out of business,” said Baba, who co-owns Vaporland, a vapor shop with locations in Everett, Marysville, Lake Stevens and Mount Vernon. Baba said the tax also encourages people to keep smoking cigarettes, which he called a much more dangerous product, instead of using e-cigarettes as a means to help them quit. Read full article

Screenshot 2015-06-08 at 09.03

Melissa Santos (07 June 2015) Vapor product tax, raising smoking age still alive in Legislature [online newspaper]. Retrieved from http://tinyurl.com/q3jzyyq

Advertisements

Drop Dr B' your thoughts

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s