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Smokefree Pennsylvania sent the following letter to all PA House and Senate leaders.
July 19, 2017
The Honorable
PA Senate
Harrisburg, PA 17120
RE: Attempt to change PA vapor taxes via PA Budget legislation
Dear Senator
Please reject efforts by the Kinser Group to change PA’s 40% tax on vapor products to a $.075/ml tax on e-liquid because doing so would:
- nearly double taxes on e-liquid that is bought and sold by vape shops in PA,
- nearly triple taxes on e-liquid manufactured and sold by vape shops in PA, and
- slash by 97% taxes paid by tobacco companies Reynolds, Altria, Imperial, JTI on their cigalike e-cigarettes that are sold at convenience stores in PA.
The US vapor industry is comprised of two vastly different market segments: Premium Vaporizers and E-liquid sold at vape shops and online (comprising two thirds of the industry) versus cigalike e-cigs primarily manufactured by tobacco companies and sold at convenience stores (comprising one third of the industry). Pages 6-9 on the attached report by Wells Fargo’s Bonnie Herzog detail US vapor market segments and sales data.
The vast majority of PV and E-liquid vapers have significantly improved their health by quitting smoking or sharply reducing their cigarette consumption. In contrast, most cigalike e-cig users are cigarette smokers who use e-cigs as temporary substitutes.
A 100ml bottle of e-liquid with a wholesale price of $10 is now taxed at $4 in PA. But a $.075/ml e-liquid tax would increase that excise tax to $7.50, with an additional 7% sales tax of $.52, almost doubling its current tax. Even worse, a $.075/ml tax would triple the e-liquid taxes now paid by vape shops in PA that manufacture their own e-liquid.
In sharp contrast, large tobacco companies Reynolds (Vuse), Altria (Mark Ten & Green Smoke), Imperial (Blu), JTI (Logic) now pay a $2.40 tax for their e-cig products that wholesale for $6, but would see their PA vapor tax slashed by 97% to <$.075 under a $.075/ml e-liquid tax scheme (as their cigalike e-cigs contain <1ml of e-liquid).
Since October, tobacco companies and other cigalike e-cig manufacturers have paid 35%-50% of all vapor tax revenue collected by the PA Dept of Revenue. If PA’s 40% vapor tax is changed to a $.075/ml tax on e-liquid, tobacco companies and other cigalike e-cig manufacturers will pay just 1%-2% of PA’s vapor tax revenue in the future.
While Smokefree Pennsylvania (since 2009) helped convince tobacco companies to develop and market e-cigarettes, and has always opposed taxing any vapor product (since they are >95% less harmful than cigarettes, and have helped 100,000 Pennsylvanians quit smoking), we staunchly oppose forcing PV and E-liquid vapers to pay 98%-99% of PA’s vapor taxes, while the worlds largest tobacco companies pay just 1%-2%.
Since 2014, Reynolds has lobbied many different state legislatures to tax e-liquid by the ml (because it imposes a very tiny tax on Reynolds’ e-cigs, while imposing far greater taxes on e-liquid sold by vape shops). Reynolds lobbied for ALL of the state laws that now tax e-liquid by the ml (i.e. NC, LA, KS, WV and DE).
Many vape shops in PA (and Smokefree Pennsylvania) support changing the 40% PA vapor tax to $.05/ml tax on e-liquid as proposed by Rep. Jeffrey Wheeland (HB 1477) and by Sen. Camera Bartolotta (SB 508) because those bills would slightly reduce overall taxes on vapor products sold at vape shops. In contrast, a $.075/ml tax would significantly increase the e-liquid tax and overall taxes on PA vape shop products.
At the June 27 PA House Finance Committee hearing on HB 1477, Jake Butcher of the year-old Vaper Technology Association falsely claimed that changing PA’s 40% vapor tax to a $.075/ml tax would “save the 300 remaining small businesses and the thousands of workers that they employ from being driven from the market,” but failed to disclose that VTA has received funding from Reynolds, Altria and other tobacco companies.
At that same hearing, Amelia Rivera falsely claimed that the PA Vape Association’s board voted to support the $.075/ml tax on e-liquid. In fact, PVA’s board never voted on and were/are deeply split over that proposal (that was/is aggressively being pushed by PVA’s recently hired lobbyists at the Kinser Group and by VTA’s Butcher), and a majority of PVA’s board members have resigned in the past two months, including me.
Since 1990, Smokefree Pennsylvania has advocated smokefree workplace policies (including PA’s 2008 Clean Indoor Air Act), halting cigarette marketing to youth, increasing cigarette taxes, and urging PA’s AG to sue cigarette companies. Since 2009, we’ve opposed attempts by Obama’s DHHS and Big Pharma funded anti vaping groups to ban the sale of all vapor products, ban vaping in workplaces, and tax vapor products. For disclosure, neither Smokefree Pennsylvania nor I have ever received funding from any tobacco, drug or vapor company.
Once again, please reject efforts to tax e-liquid at $.075/ml because it would increase taxes on e-liquid and vape shops, and slash vapor taxes by 97% on tobacco companies.
Sincerely,
Bill Godshall
Founder and Executive Director
July 19, 2017
The Honorable
PA Senate
Harrisburg, PA 17120
RE: Attempt to change PA vapor taxes via PA Budget legislation
Dear Senator
Please reject efforts by the Kinser Group to change PA’s 40% tax on vapor products to a $.075/ml tax on e-liquid because doing so would:
- nearly double taxes on e-liquid that is bought and sold by vape shops in PA,
- nearly triple taxes on e-liquid manufactured and sold by vape shops in PA, and
- slash by 97% taxes paid by tobacco companies Reynolds, Altria, Imperial, JTI on their cigalike e-cigarettes that are sold at convenience stores in PA.
The US vapor industry is comprised of two vastly different market segments: Premium Vaporizers and E-liquid sold at vape shops and online (comprising two thirds of the industry) versus cigalike e-cigs primarily manufactured by tobacco companies and sold at convenience stores (comprising one third of the industry). Pages 6-9 on the attached report by Wells Fargo’s Bonnie Herzog detail US vapor market segments and sales data.
The vast majority of PV and E-liquid vapers have significantly improved their health by quitting smoking or sharply reducing their cigarette consumption. In contrast, most cigalike e-cig users are cigarette smokers who use e-cigs as temporary substitutes.
A 100ml bottle of e-liquid with a wholesale price of $10 is now taxed at $4 in PA. But a $.075/ml e-liquid tax would increase that excise tax to $7.50, with an additional 7% sales tax of $.52, almost doubling its current tax. Even worse, a $.075/ml tax would triple the e-liquid taxes now paid by vape shops in PA that manufacture their own e-liquid.
In sharp contrast, large tobacco companies Reynolds (Vuse), Altria (Mark Ten & Green Smoke), Imperial (Blu), JTI (Logic) now pay a $2.40 tax for their e-cig products that wholesale for $6, but would see their PA vapor tax slashed by 97% to <$.075 under a $.075/ml e-liquid tax scheme (as their cigalike e-cigs contain <1ml of e-liquid).
Since October, tobacco companies and other cigalike e-cig manufacturers have paid 35%-50% of all vapor tax revenue collected by the PA Dept of Revenue. If PA’s 40% vapor tax is changed to a $.075/ml tax on e-liquid, tobacco companies and other cigalike e-cig manufacturers will pay just 1%-2% of PA’s vapor tax revenue in the future.
While Smokefree Pennsylvania (since 2009) helped convince tobacco companies to develop and market e-cigarettes, and has always opposed taxing any vapor product (since they are >95% less harmful than cigarettes, and have helped 100,000 Pennsylvanians quit smoking), we staunchly oppose forcing PV and E-liquid vapers to pay 98%-99% of PA’s vapor taxes, while the worlds largest tobacco companies pay just 1%-2%.
Since 2014, Reynolds has lobbied many different state legislatures to tax e-liquid by the ml (because it imposes a very tiny tax on Reynolds’ e-cigs, while imposing far greater taxes on e-liquid sold by vape shops). Reynolds lobbied for ALL of the state laws that now tax e-liquid by the ml (i.e. NC, LA, KS, WV and DE).
Many vape shops in PA (and Smokefree Pennsylvania) support changing the 40% PA vapor tax to $.05/ml tax on e-liquid as proposed by Rep. Jeffrey Wheeland (HB 1477) and by Sen. Camera Bartolotta (SB 508) because those bills would slightly reduce overall taxes on vapor products sold at vape shops. In contrast, a $.075/ml tax would significantly increase the e-liquid tax and overall taxes on PA vape shop products.
At the June 27 PA House Finance Committee hearing on HB 1477, Jake Butcher of the year-old Vaper Technology Association falsely claimed that changing PA’s 40% vapor tax to a $.075/ml tax would “save the 300 remaining small businesses and the thousands of workers that they employ from being driven from the market,” but failed to disclose that VTA has received funding from Reynolds, Altria and other tobacco companies.
At that same hearing, Amelia Rivera falsely claimed that the PA Vape Association’s board voted to support the $.075/ml tax on e-liquid. In fact, PVA’s board never voted on and were/are deeply split over that proposal (that was/is aggressively being pushed by PVA’s recently hired lobbyists at the Kinser Group and by VTA’s Butcher), and a majority of PVA’s board members have resigned in the past two months, including me.
Since 1990, Smokefree Pennsylvania has advocated smokefree workplace policies (including PA’s 2008 Clean Indoor Air Act), halting cigarette marketing to youth, increasing cigarette taxes, and urging PA’s AG to sue cigarette companies. Since 2009, we’ve opposed attempts by Obama’s DHHS and Big Pharma funded anti vaping groups to ban the sale of all vapor products, ban vaping in workplaces, and tax vapor products. For disclosure, neither Smokefree Pennsylvania nor I have ever received funding from any tobacco, drug or vapor company.
Once again, please reject efforts to tax e-liquid at $.075/ml because it would increase taxes on e-liquid and vape shops, and slash vapor taxes by 97% on tobacco companies.
Sincerely,
Bill Godshall
Founder and Executive Director