Senator proposes changing taxes on e-cigarette products

A Pennsylvania senator has proposed changing the tax on e-cigarette products from the current 40% wholesale tax to 5 cents per milliliter.

  In order to implement a balanced budget for the 2016-2017 fiscal year, the legislature approved a 40% wholesale tax on e-cigarettes (also known as vaping products). Unfortunately, this tax has had a devastating impact on the vaping industry and many hardworking Pennsylvanians.   So far, over 100 small businesses and brick-and-mortar vape shops have closed, and more are expected to follow. This has resulted in hundreds of people losing high-paying jobs, and consumers of these products have already seen prices for e-cigarette products begin to rise and purchase rates start to decline.   Due to the impact on the industry, the Commonwealth is unlikely to collect any revenue close to the expected 40% wholesale tax ($13.3 million) in this fiscal year. The Commonwealth will also gain additional revenue from sales tax collected on these products and income tax from industry employees. Unless legislative solutions are found, the industry will continue to shrink, resulting in a loss of actual net revenue for the Commonwealth.   Currently, there is a lot of evidence showing that vaping products are a harm-reduction alternative to smoking combustible cigarettes.