Vape Vendors Brace For Profit Hits From New E-Cigarette Tax

Steve Birr | Vice Reporter

Vaping vendors across California are bracing for a first-time state tax on electronic cigarettes following the passage of a ballot hiking tobacco taxes.

The initiative could hit the vaping industry with a 67 percent penalty on the purchase of liquid nicotine. The tax is part of Proposition 56, which passed with 63 percent support and will raise the tax on tobacco products in the state from 87 cents to $2.87, along with bringing e-cigarettes under the umbrella.

Critics of the ballot and many health experts argue taxes on e-cigarettes undermine their utility in helping smokers quit. Vape vendors in California are fearful higher prices will curb e-cigarette use and make it more difficult for smokers to quit, reports The Orange County Register.

E-cigarette distributors in California say the tax will lift the price of one standard 30 milliliter bottle of liquid nicotine from roughly $20 to $30.

“I guess now leaders from the e-cig industry and liquid manufacturers will have to sit down with the BOE (Board of Equalization) and try to find a fair taxation that won’t put shops out of business,” Alea Jasso, a vape store owner, told The O.C. Register. “If they look to vaping as their source to try to quit, we hope it’s affordable enough for them to be able to do that.”

There is concern among e-cigarette vendors that their small businesses will eventually be crushed by the potential 67 percent tax hike. Supporters of Proposition 56 do not deny the impact, but do not appear bothered by the effect on businesses. Many who campaigned for the ballot view vaping as a public menace helping to prolong the tobacco epidemic.

“There’s a huge bulk of evidence on tobacco taxes that shows taxation is one of the most effective ways to reduce smoking across the board, and also in adolescents,” Georgiana Bostean, a sociology teacher at Chapman University, told The O.C. Register. “There’s no reason to believe that would be different for e-cigarettes.”

Supporters of the tax are fearful that vaping is re-normalizing smoking as socially acceptable and will eventually lead to higher smoking rates among America’s youth. Evidence that e-cigarette use is turning another generation of children into cigarette smokers is thin. The United Kingdom actually promotes the sale of e-cigarettes as a health conscious alternative to smoking.

Evidence suggests e-cigarettes are 95 percent safer than traditional cigarettes, because the majority of cancer causing chemicals are inhaled through smoke. A study found that nearly all of the 2.6 million e-cigarette users in the U.K. are former or current smokers, many using the device to quit.

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Steve Birr

Vice Reporter

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