Detailed Breakdown of the U.S. E-Cigarette Nicotine Tax Bill: 2.78 Cents per Milligram

On October 26, news from the foreign e-cigarette media Vaping360 commented on the U.S. House of Representatives passing a tax on e-cigarettes, calling it an outrageous bill.
 
A tax bill that will make e-liquid more expensive passed the House on Wednesday without a single public hearing. If ultimately passed by both the House and Senate and signed into law, the bill would add $20 for every 60ml bottle of e-liquid with a nicotine content of 12mg/ml.

Vaping360 commented that the law is too new; despite the vote occurring two days ago, the full text has not yet been published on the congressional website. The bill passed with a vote of 25 to 14, with two Democrats and two Republicans opposing it.

Representative Suozzi expressed his fear over the number of teenagers addicted to nicotine due to vaping, stating that increasing the cost of e-cigarettes will directly correlate with a reduction in the use of e-cigarette products.

Proponents of the bill argue that the outbreak of lung diseases associated with black market cannabis oil is the reason for taxing e-cigarette products equivalent to cigarettes.

This has created a divide between Suozzi and tobacco policy experts, who suggest using a differential tax system (making lower-risk products cheaper than higher-risk ones) to encourage smokers to switch to safer e-cigarette products. However, this is not a fair assessment, as the tax rate on e-cigarettes is actually higher than that on cigarettes.

The bill is based on nicotine content rather than the volume of e-liquid, proposing a tax of $50.33 for every 1810mg of nicotine, which translates to 2.78 cents per milligram. The tax rate for cigarettes is $50.33 per 1000 cigarettes (retail price of $1 per pack), or about half a cent per milligram (each cigarette contains about 10mg, totaling 200mg per pack).

Suozzi and King did not consider the content of cigarettes, but for e-vapor, they measure the content rather than the amount absorbed by the vaporizer.

Using apples and oranges for comparison, the price of a 30ml bottle of 50mg/ml e-liquid will increase by $41.70, even though that bottle contains the equivalent of smoking 7.5 packs of cigarettes, which would only cost $7.50.

If DIY nicotine is taxed (which seems likely), the cost increase will be even more severe. The tax on 1 liter of 100mg/ml DIY nicotine (the most commonly used level by mixers) will increase costs by nearly $2,800!

The Joint Committee on Taxation's chief told House members that the bill will raise $10 billion over 10 years. He also stated that the tax will reduce e-product sales by 22% annually. These estimates seem to overlook the black market that such a law will create.

If the bill passes, it will immediately create the most dangerous black market. It will encourage the illegal importation of very high-strength nicotine, which can easily be obtained from Chinese sellers. Dangerous incidents will inevitably occur with mixers handling pure nicotine (1,000 mg/ml).

Media reports that Representative Suozzi claims e-vapor is killing people, but he does not realize what his bill may lead to. They seem unconcerned that many former smokers will return to smoking.

Ironically, the bill intends to reduce the appeal of products to teenagers, such as pre-filled pods like JUUL, which will be minimally affected by the tax. The tax structure will encourage people to use lower-nicotine e-liquids, meaning inhaling more flavoring and mixing bases. This may also mean that smokers will switch to open-system e-cigarettes, as new e-cigarettes are likely to benefit from lower costs and higher nicotine content.

The current bill is not final. It can change between now and the House vote, and then change again before passing in the Senate.

The bill should shock every e-cigarette manufacturer, e-liquid manufacturer, and harm reduction supporter.