Electronic Cigarettes are sitting ducks for the taxman. And the taxman does cometh.
By the end of this week or next, perhaps today or tomorrow, the Utah State Legislature may destroy the vital, economically important electronic cigarette industry by having eCigarettes officially labeled as “tobacco products” and taxing them at the same rate as analog cigarettes. This reclassification would impose an 86% tax rate on eLiquids. Originally the Bill, (HB372) would tax all eCigarettes at 86%, but after some lawmakers expressed concern on taxing all the components of said eCigs they settled on the very heart of the electronic cigarette, the eJuice that makes it successful.
Representative Paul Ray (Republican) who represents the 13th District in Utah, which covers North West Davis County, is the author behind Bill HB372. He serves on several committees, including the Judiciary, HHS (where he is chairman), Executive Offices and Criminal Justice Appropriations, and the Veterans Reintegration Taskforce. He is, without a doubt, a “progressive” Republican, someone that claims to stand for conservative ideals but when you look at the record you see a whole bunch of progressive issues that this jerk guy supports. And his knowledge of electronic cigarettes and the industry it is building displays an enormous amount of ignorance. It saddens me that people like him are in positions of power that allow them to do the things they say they want to do.
Because the sales of electronic cigarettes have more than doubled in the past year and will more than likely double each year for the next decade (my numbers) the ‘politician’ is incapable of leaving the industry alone when it is such a delicious target for “revenue”. It disgusts me, but since this is not my personal blog there is only so much outrage I can responsibly express here.
Last week it was New Mexico, which would have levied a 53% tax on eCigarettes and also reclassify them as tobacco products. Next week it will be another state, and on and on it goes. The industry is going to be raked over the coals, it’s just a matter how badly it will be and how often it will happen.
The hypocrisy of government has never been clearer than it is when it tries to deal with electronic cigarettes. Tobacco cigarettes have been bitch slapped for years, and the anti-smoking attitude is now firmly ensconced as part of the American mindset. No one believes tobacco is harmless. Not even smokers. And every time some local, state, or federal government raises taxes on tobacco most people don’t care. Most people don’t smoke.
It’s just sickening to think that one side of the government has had a massive push to get people off cigarettes for more than 30 years and the other side of the government is now frantically looking to make up that lost revenue caused by people that have quit or switched to a safer alternative.
The New Mexico Bill of last week, HB428, was essentially beaten back because the citizens, or at least the proactive Vapers in New Mexico, stood up and made their voices heard. But how long will that last? How many more attempts will be made before a Bill does pass and instead of visiting your favorite eLiquid vendor and spending $16 for a 30ML bottle of your favorite juice you wind up paying $30 or more?
So far the vaping community has been able to fend off most of the dumbass tax hikes that dumbass politicians are trying to pass, here in the US anyway. Can we continue the winning streak indefinitely? Are we willing to do whatever it takes to keep our industry free of over-regulation and heavy taxation? I’m not so sure.
When I was a smoker I would bitch and complain whenever the price of Winston Lights had gone up by 25 cents a pack. But I still bought them. I paid the taxman, grudgingly, but I paid him. That is until one fateful day I walked in to my local Hess gas station and I saw that cigarettes had gone up by 50 cents a pack. Right then and there I quit smoking for good. But not over any health issue, instead it was to strike back at the New Hampshire government. “Screw them,” I said. And then I went around for months trying desperately to get my fellow smokers to quit as well, for the same reason I did. Take the revenue away from the politicians. They claim to despise tobacco yet depend on its revenue for its survival. “Let them starve”…
I was tired of being beat up by the government, a government that believed smokers would continue to smoke no matter how much we were taxed. I suppose to a point that might be true for many people, but it wasn’t to me, and not to a whole lot of people who decided not to feed the government anymore through these exorbitant tax rates.
What ARE They Thinking?
Why would any government official that claims to care about citizen’s health want to kill off electronic cigarettes? Why do some politicians call for an outright ban while others want to tax the hell out of them? Why are they ignoring the incredibly positive effects of eCigarettes? Why are they not embracing the industry that has the only real chance to finally kill off smoking? Wouldn’t you like some straight answers? I mean, I know the answer, it’s taxes, but it would be ‘original’ to hear a politician admit it.
Changing The Game
Today the most important factor concerning the electronic cigarette industry is taxes, and how much are we willing to pay. An outright ban, while certainly possible, doesn’t worry me so much. I don’t even believe that the FDA will restrict eLiquid flavoring. I believe the struggle over eCigarettes will be the amount of taxes the state and local governments will be able to get away with. Hell, the FDA might just encourage people to switch to eCigarettes in order for the IRS to collect more money.
What Will You Do?
The FDA waited to long, in my opinion, to do much of anything with eCigarette regulations. They probably will propose a bunch of dumbass regulations anyway, but they do so at a point in time where many people in this country have made positive changes in their lives by ditching tobacco and switching to eCigs. Thousands of small businesses have popped up to serve the needs of Vapers; tens of millions of dollars are being invested in growing this industry. Thousands upon thousands of jobs have been created because of electronic cigarettes. Why kill it off with over regulation and heavy taxation? Because they need the money.
The only way greedy politicians will continue trying to tax eCigarettes is if the FDA maintains, once and for all, that eCigarettes are indeed a tobacco product. This would allow city and state governments to impose whatever taxes it wants, permanently. Do you honestly think the FDA will declassify eCigarettes as tobacco products? Can you imagine what the current administration would do if the FDA did something that prevented eCigarettes from being taxed like tobacco?
As long as the regulations aren’t severe enough to kill of the industry there will continue to be a long drawn out fight over taxation because taxation is vital to a government that spends money so foolishly and borrows more than 34 cents of every dollar it spends. So get ready to either fight each and every battle as they come up, or get comfortable with forking over more than twice what you’re paying now. Remember, taxes could be levied by the federal government, the state, and the local governments, not just one of them.
Rather than waste time fretting over whether or not eCigarettes will remain legal I think we should turn our attention to stopping each and every attempt, no matter where it is, to tax electronic cigarettes and eLiquid at the same rate as tobacco. That’s where the real is, and where it will remain, until such time that local, state, and federal governments no longer need the money. You know, when hell freezes over.