Court Gives Vape Vendors Hope Against Massive Tax Crushing Businesses
A court rejected an effort by officials in Pennsylvania to toss out a lawsuit challenging a massive state tax on electronic cigarettes that is forcing hundreds of vape shops to close.
U.S. District Judge John Jones III ruled Thursday in favor of East Coast Vapor LLC, a vape shop in Harrisburg, allowing the suit to move forward in the state’s courts. East Coast Vapor launched the lawsuit to challenge a 40 percent tax on vape products that went into effect in October. The tax is blamed for the closure of more than 150 vape shops in Pennsylvania and more are expected to follow, reports Law 360.
Recently, the tax forced Halfmoon Vapes in Milford and Electric Smoke Lounge in Dingmans Ferry to close their doors. Some owners said they “knew immediately we would have to close” when the tax passed last August.
“We’ve already seen too many people lose their businesses and livelihoods because of the way this tax was enacted, and many more vapor businesses are teetering on the brink of failure due to the new tax burden,” GOP Sen. Camera Bartolotta, the sponsor of a bill replacing the tax, said in an April statement. “The state won’t see any benefit at all from this tax if shops continue to fail.”
Overall, the number of vape shops in Pennsylvania has declined roughly 30 percent since officials implemented the tax, according to the Commonwealth Foundation, a policy institute in the state. Legislation is currently being reviewed by lawmakers that repeals the 40 percent tax and replaces it with a 5-cents-per-milliliter tax on nicotine liquid.
The tax is pushing consumers out of state to buy their vaping products. Nicotine liquid that now costs nearly $10 in Pennsylvania is available in New Jersey for $4.99. In addition to pushing for a repeal of the tax, the Pennsylvania Vape Association is also attempting to have e-cigarettes removed from the state’s definition of a tobacco product, but it is unclear how much traction these policy goals will gain in the state legislature this year.
Proponents of vaping argue critics are ignoring the positive impact the devices are having on current smokers. Vaping eliminates up to 95 percent of the risk associated with cigarettes because the majority of cancer-causing chemicals are inhaled through smoke. Public health experts also note vaping devices offer smokers a viable way to reduce health risks to those around them.
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