California Prop 56 - Hidden Vape Tax

[Endor]

Yeah... But were getting a Shiny New High Speed Rail sometime in 2027.

That is, unless a Dam Collapses and Washes the tracks away. Then we will get it in 2035.

...all while we drive to work on roads that are worse than those in war-torn countries.

Perhaps the new e-cig taxes will pay for some road improvements? I mean, 27.3% wholesale tax is a lot of money, plus the additional cigarette taxes (which is waaay more in total tax income). Nah, we have unicorn trains to build and State employee pensions to pay.

If you want actual roads, then you'll have to pay even more taxes. Taxes are on the table as push for California road funding intensifies

 

[Lessifer]

...all while we drive to work on roads that are worse than those in war-torn countries.

Perhaps the new e-cig taxes will pay for some road improvements? I mean, 27.3% wholesale tax is a lot of money, plus the additional cigarette taxes (which is waaay more in total tax income). Nah, we have unicorn trains to build and State employee pensions to pay.

If you want actual roads, then you'll have to pay even more taxes. Taxes are on the table as push for California road funding intensifies

I'm still confused. I think the 27.3% rate is based on the current $.87 tax on cigarettes, and will be in effect starting in April. Then, I think, in June we get a new rate based on the new $2.87 tax on cigarettes. Or am I thinking of this wrong?

 

[zoiDman]

...all while we drive to work on roads that are worse than those in war-torn countries.

Perhaps the new e-cig taxes will pay for some road improvements? I mean, 27.3% wholesale tax is a lot of money, plus the additional cigarette taxes (which is waaay more in total tax income). Nah, we have unicorn trains to build and State employee pensions to pay.

If you want actual roads, then you'll have to pay even more taxes. Taxes are on the table as push for California road funding intensifies

You have to give California Leadership one thing. They are Consistent.

Because whenever they Talk about doing something, the conversation Always Involves a New Tax. And words "Speeding Cut" is really even considered.

I think Margret Thatcher said it best.

"Socialism works Great. Until your People run out of Money for the Government to Spend."

 

[oplholik]

I'm confused also as to how much, and on what, and how, and when we are supposed to pay the tax for orders outside of CA., where that tax won't be added in.

 

[Katya]

I'm still confused. I think the 27.3% rate is based on the current $.87 tax on cigarettes, and will be in effect starting in April. Then, I think, in June we get a new rate based on the new $2.87 tax on cigarettes. Or am I thinking of this wrong?

I'm confused also as to how much, and on what, and how, and when we are supposed to pay the tax for orders outside of CA., where that tax won't be added in.

Add me to the list of confused taxpayers.

I think our brave legislators are confused also.

 

[Katya]

...all while we drive to work on roads that are worse than those in war-torn countries.

Perhaps the new e-cig taxes will pay for some road improvements? I mean, 27.3% wholesale tax is a lot of money, plus the additional cigarette taxes (which is waaay more in total tax income). Nah, we have unicorn trains to build and State employee pensions to pay.

If you want actual roads, then you'll have to pay even more taxes. Taxes are on the table as push for California road funding intensifies

And I don't even want to think what will happen if we lose a chunk of federal money due to our sanctuary state status.

 

[Lessifer]

And I don't even want to think what will happen if we lose a chunk of federal money due to our sanctuary state status.

Or if our medicaid/medicare expansion becomes unfunded?

 

[DC2]

"Socialism works Great. Until your People run out of Money for the Government to Spend."

When I was in college I actually believed in the concept of socialism.
What college student doesn't?


But it wasn't about running out of money that changed my mind.
It was more about realizing that most people are inherently lazy if they can be.

 

[Rossum]

What college student doesn't?

I'm your huckleberry.

 

[Endor]

When I was in college I actually believed in the concept of socialism.
What college student doesn't?

I was always the oddball. I've been a conservative republican with strong libertarian leanings since I can remember, even throughout college. Of course, the older I get, the stronger those libertarian beliefs become (which I chalk up to becoming a curmudgeon).

Back on topic... reading this: Tax and Fee Guide for Cigarettes and Tobacco Products states:

"Distributions of all products containing any tobacco, nicotine, e-cigarettes (i.e. nicotine delivery devices) sold in combination with nicotine or items classified as little cigars will be subject to the tobacco products tax, which is currently 27.30 percent of the wholesale cost. Please note, the tax rate on tobacco products is determined annually by the BOE and is equivalent to the tax on cigarettes. The rate is determined at the April Board meeting and is in effect the next fiscal year (beginning July 1)."

I'll be honest that I've never really understood how tobacco taxes work in the background, but I'm guessing the tax is on the wholesale cost and not the sales cost? For example, if a shop is buying a bottle of liquid for $10 and reselling it for $15, then the tax would be on the $10 (tax of $2.73) and not the $15?

It is also worth nothing that it appears that raw nicotine solution is also included in this tax.

Regarding out-of-state purchases:

"If you purchase cigarettes or tobacco products for your own use from outside the state without paying California excise taxes and use tax, you are required to report and pay the excise and use taxes directly to the BOE. This includes products purchased through the mail, by telephone, or via the Internet that are shipped into California, but will still owe the use tax. You will not owe the excise taxes if you personally bring less than 400 cigarettes (two cartons) into California."

A few interesting and confusing things here. First off, they only reference the use tax being owed for Internet purchases (which I believe is just sales tax). Or is that both? Jeez.

Secondly, what's the equivalent of 400 cigarettes in terms of milliliters of eliquid?

 

[oplholik]

Jeez, and on it goes. How the hell are we supposed to know just what to do??

 

[zoiDman]

Jeez, and on it goes. How the hell are we supposed to know just what to do??

No Clue.

Not sure if California even wants you to Know what to do right now. Else the would have Released some Consumer Guidance like this...

https://www.boe.ca.gov/pdf/l488.pdf

As it stands, if the Out of State Retailer is Not including the Tax into the final price of your order, I guess what CA wants Consumers to do is to Somehow calculate a Tax based on the Wholesale Price of what the e-Liquid cost?

And then send that amount Directly to some CA Agency that 99.99% of California have never dealt with or possible even heard of.

 

[Ca Ike]

Jeez, and on it goes. How the hell are we supposed to know just what to do??

Your not, plain and simple. They intentionally make it confusing and obtuse, then obfuscate when answering questions so you have to accept what they say as truth.

As far as taxes go, the use tax is sales tax only and that's what you claim on your state tax form which no one really does. The excise tax is the tobacco tax.

 

[Rossum]

No Clue.

Not sure if California even wants you to Know what to do right now. Else the would have Released some Consumer Guidance like this...

https://www.boe.ca.gov/pdf/l488.pdf

Well, at least they're not taxing hardware that's sold independently/separately from the e-liquid.

 

[zoiDman]

Well, at least they're not taxing hardware that's sold independently/separately from the e-liquid.

Yeah... That was one area where CA showed some Legal Common Sense.

Because I don't see how "Intended Use" for Taxation can Fly. Especially in a State where the Intended Use could be for the "something we Don't Talk about here" Market.

 

[oplholik]

How bout tobacco flavorings for diy. That's w/o any nic, so should be ok?

 

[Ca Ike]

Well, at least they're not taxing hardware that's sold independently/separately from the e-liquid.

Here's where closed systems will lose a bit. Since they can't be separated from the liquid, the hardware will be subject to the tax initially. Replacement parts like batteries will not once the starter kit is purchased. Open system hardware should not be subject to it because you have to buy it separately from the liquid. That's my understanding.

Of course I object to excise(sin) taxes period as they are illegal under both the constitution and the tax code. By voting for them we give permission to bypass the law which also makes them harder to fight once implemented.

 

[zoiDman]

How bout tobacco flavorings for diy. That's w/o any nic, so should be ok?

The way I read it (if what I am Reading is Current or Hasn't been Changed) if a Flavoring is "made, derived, or containing any amount of tobacco", then it would be Taxable.

 

[oplholik]

Thanks guys, a little clearer now. I guess I will be making an order for more flavorings before the 1st. I already have quite a bit, but want more. Don't need anymore nic, so hopefully, no worries.

 

[Ca Ike]

Thanks guys, a little clearer now. I guess I will be making an order for more flavorings before the 1st. I already have quite a bit, but want more. Don't need anymore nic, so hopefully, no worries.

Everything we're saying right now is what we "think" based on the wording of the bill. I've been talking to a couple lawyers that a local B&M uses and even they aren't exactly sure what's going on, but are reasonably sure we're on the right track.