If Washington Gov. Jay Inslee’s newly proposed two-year budget passes, e-cigarette users could see their products taxed at a rate of 95 percent, KFOR reports.
Seeing a significant gap in funding, Inslee looked around to find additional revenue and discovered a burgeoning industry: the e-cigarette market. Under current Washington tax law, snuff and some cigars are already taxed at a 95 percent rate, but first, the tax does not apply to all traditional tobacco products, second, tobacco products carry more nicotine, and third, studies indicate that tobacco is vastly more addictive and not as healthy in comparison to vapor products.
Based on best estimates, the tax would raise $18.1 million dollars by 2017, and just two years later, it would likely bring in an additional $78.4 million dollars of revenue. “This is clearly intended to prevent smokers from switching to vaping in an effort to protect the state’s monopoly on cigarette tax revenue,” analysts at Americans for Tax Reform wrote, expressing skepticism as to Inslee’s stated motivation for the tax.
Local e-cigarette business owner Kim Thompson is extremely upset at the attempt to treat e-cigarettes like traditional tobacco products.
“A 95% tax would do a few different things,” Kim Thompson told a local NBC Affiliate. Thompson owns an e-cigarette store called The Vaporium. “One, it would demonize a product, make it look as though it was as bad as smoking. The other thing is that it would make vaping and traditional cigarettes more similar in pricing. It would give us less incentive to the smoke to say, hey, give this a try.”
“I would be no longer able to afford to pay my employees to continue to help people to quit smoking,” Thompson added. According to Thompson, a tax as high as 95 percent would cause many users to relapse and switch back to traditional tobacco.
A D.C.-based e-cigarette organization called the American Vaping Association immediately released a press release upon hearing the news from the governor’s office: “Gov. Inslee’s message to smokers is clear: please, don’t quit. The government needs your money, ”Gregory Conley, President of the American Vaping Association, said.
“His budget plan would tax most vapor stores out of business, while seizing half of the revenue from the few businesses that remain…The net effect could actually be a decline in tax revenue due to the devastating loss of Washington-based small businesses and jobs.”
So far, only North Carolina and Minnesota currently tax e-cigarettes, but Inslee’s new budget represents the first break from precedent by attempting to tax nicotine-free vapor products.
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