So, has anyone seen any PA "Floor Tax" forms yet? I'm concerned!

[Verb]

Will the tax apply pure vg or pg?

If a shop mixes their own juice, they pay the tax on ingredients. No guidance has been given for eliquid mixed for personal use or free distribution.

If you vape zero nic unflavored, the tax, as written, should apply to VG and PG. The trouble they are going to have is that they are both available in state and untaxed. And they are sold by retailers that do not possess an OTP retailer's license. They are already exempting products that are clearly included by the language. Vaporizers sold at plant medicine dispensaries and pharmacutical devices and substances that meet the definition in the statute will NOT be taxed. Can they change the meaning of "produces a vapor of nicotine or any other substance" to be any other substance expect some as we see fit.

 

[grandmato5]

Is there a link to the actual legislation?

 

[sofarsogood]

If a shop mixes their own juice, they pay the tax on ingredients. No guidance has been given for eliquid mixed for personal use or free distribution.

If you vape zero nic unflavored, the tax, as written, should apply to VG and PG. The trouble they are going to have is that they are both available in state and untaxed. And they are sold by retailers that do not possess an OTP retailer's license. They are already exempting products that are clearly included by the language. Vaporizers sold at plant medicine dispensaries and pharmacutical devices and substances that meet the definition in the statute will NOT be taxed. Can they change the meaning of "produces a vapor of nicotine or any other substance" to be any other substance expect some as we see fit.

My costs of DIY ingredients works out to 1.2 cents per ml. If you are right and vape shops have similar costs a 40% tax on ingredients would be irrelevent. Vaping technology is supremely elegant because so much of the bits and peices are generic, widely available and dirt cheap, the electronic features are proven in other applications, and hardware fabrication is low tech. Vaping is doing to smoking what the internet has done to copper phone lines. They can spin rules endlessly but the economics are compelling.

 

[Verb]

Is there a link to the actual legislation?

http://www.legis.state.pa.us/CFDOCS...B&billNbr=1198&pn=3731&mobile_choice=suppress

OTP (other tobacco product) tax starts on page 51.

 

[smokin95]

So if I bought something from an online out of state vape shop, would whatever I buy need to be taxed (for example a T-shirt) or it would be dependent on what I'm buying?

 

[Verb]

So if I bought something from an online out of state vape shop, would whatever I buy need to be taxed (for example a T-shirt) or it would be dependent on what I'm buying?

It depends on what you purchase whether it's from a vape shop or not. If it meets the tax's defenition of an "electronic cigarette" you are to pay 48.4% of the purchase price including shipping. 40% is due by the 20th of the following month and 6% of the total price including shipping and the excise tax is due on your yearly income tax.

A couple of areas need clarification from the state: ingredients for mixing personal use liquids, materials for RBAs and DIY mods, parts, resale of used equipment, and purchases from an in-state retail buisness where the tax should have been paid by the retailer but was not (they may not know they are now selling an OTP).

 

[grandmato5]

Now that I've read the actual law and digested it for a few hours I understand where the op is coming from. Reading it has bought up some interesting thoughts for me.

They wrote the law to follow cigarette tax laws through the manufacturer-wholesaler-retailer pathway. But our ecigs don't always follow that path. Many vape shops are both manufacturers and retailers and some are also wholesalers. As the law is written manufacturers don't pay tax on raw materials. The tax is only paid when the retailer purchases finished products from the manufacturer. So, as manufacturers, vape shops would not pay tax on VG, PG, flavorings or nicotine when they purchase them because they are manufacturers at that point, they would only pay the tax when its a finished product and the vape shop changes to being retailers. BUT there is no provision in the law for retailers selling directly to customers and them paying the tax at that point. That might fall under that "spirit of the law" Kodiak mentioned so I would expect the retailer to need to pay the tax when selling to individuals. Same principle should apply to individuals or "unclassified importers" to use their term . No tax due for purchasing PV, PG, Flavorings or nicotine to mix your own juice. And since as an individual you aren't selling to anyone else or receiving any other "consideration" your DIY remains untaxed.

Using that same theory things like cotton, wire, heat sinks, 510 connectors, switches, and many other parts that "manufacturers" use to make our ecigs would NOT require the 40% flour tax OR be taxed when purchased by individuals. Individuals never pay since they never receive any "consideration" and a person that assembles and then resales to a retailer would have the retailers paying the tax at that point.

Tanks, RBA's, Mods alone is where I see the most room for disagreement. As written, I kind of agree with the op, assembled ecigs are the only taxable hardware for retailers to pay tax on (besides bottled e-liquid ready for sale) but unfortunately the law is so badly written for our ecigs that clarification is required before anyone knows for sure.

 

[KODIAK (TM)]

...you are to pay 48.4% of the purchase price including shipping. 40% is due by the 20th of the following month...

Freaking hilarious! So ludicrous it's downright funny.

But also quite sad at the same time. If this is what budget shortfalls have done to our friends in PA I'd recommend all residents start hoarding food, medical supplies and fresh drinking water. Your State is obviously on the verge of collapse.

Hang in there till November. Vote early (and often). Be safe.

 

[swampergene]

I spoke to one shop over the weekend, their answer to what they are considering as taxable items for the floor tax was all juice and all hardware, to be safe. TO BE SAFE! We do not pay taxes on "ideas" or "intent", this is a joke and amounts to consumer fraud perpetrated by the state!

 

[Verb]

Now that I've read the actual law and digested it for a few hours I understand where the op is coming from. Reading it has bought up some interesting thoughts for me.

They wrote the law to follow cigarette tax laws through the manufacturer-wholesaler-retailer pathway. But our ecigs don't always follow that path. Many vape shops are both manufacturers and retailers and some are also wholesalers. As the law is written manufacturers don't pay tax on raw materials. The tax is only paid when the retailer purchases finished products from the manufacturer. So, as manufacturers, vape shops would not pay tax on VG, PG, flavorings or nicotine when they purchase them because they are manufacturers at that point, they would only pay the tax when its a finished product and the vape shop changes to being retailers. BUT there is no provision in the law for retailers selling directly to customers and them paying the tax at that point. That might fall under that "spirit of the law" Kodiak mentioned so I would expect the retailer to need to pay the tax when selling to individuals. Same principle should apply to individuals or "unclassified importers" to use their term . No tax due for purchasing PV, PG, Flavorings or nicotine to mix your own juice. And since as an individual you aren't selling to anyone else or receiving any other "consideration" your DIY remains untaxed.

Using that same theory things like cotton, wire, heat sinks, 510 connectors, switches, and many other parts that "manufacturers" use to make our ecigs would NOT require the 40% flour tax OR be taxed when purchased by individuals. Individuals never pay since they never receive any "consideration" and a person that assembles and then resales to a retailer would have the retailers paying the tax at that point.

Tanks, RBA's, Mods alone is where I see the most room for disagreement. As written, I kind of agree with the op, assembled ecigs are the only taxable hardware for retailers to pay tax on (besides bottled e-liquid ready for sale) but unfortunately the law is so badly written for our ecigs that clarification is required before anyone knows for sure.

This document posted on the first page of this thread gives some insight to how they are interpreting the statute. B&M's who make their own liquids are to pay the tax on ingredients. No where near the language passed. No guidance for consumers. It's a felony to possess an OTP where the proper tax was not paid. And it officially begins in two and a half weeks.

I found this: http://www.revenue.pa.gov/GeneralTaxInformation/Tax Types and Information/Documents/tobacco_products_tax_qa.pdf

Bottom left of page 1:
What vapor products are covered by the tax? E-cigarettes and their components commonly referred to as “mods” and any liquid or substance that is put in e-cigarettes or that is sold for use in e-cigarettes.

(But no form. Looks like you have to; as an individual; figure it up and send them a check all by yourself. Dunno about business forms.)

 

[smokin95]

If I were to purchase something today from fasttech and it doesn't come until October would I owe tax on it? (I'm PA obv.)

 

[grandmato5]

If I were to purchase something today from fasttech and it doesn't come until October would I owe tax on it? (I'm PA obv.)

Invoice date should be the date that matters.

 

[Verb]

I just talked on the phone with PA dept of Revenue. Home

I used the Misc. Tax phone number. Beware, you need to enter your social to talk to a human. They were very helpful, though most every question I asked required holding and getting the assistance of the supervisor. She did a better job of hiding her smugness than I did at hiding my condescension, but I tried really hard.

1) Items that have multiple uses when purchased from a retail store that is not a "Vape Shop" are NOT taxed. Screws, O-rings, wick, wire, loose batteries, VG, ect. are only taxed if sold at a "Vape Shop." To quote the agent, "if it can be used as something else and it's not purchased at a vape shop, it is NOT covered."

2) Consumer to consumer sale of used durable equipment is PERMITTED.

3) My last question, which I thought would be the easiest, hadn't been asked before. When would the form for "Unclassified Importers" be available since the tax is active 10/01 and the first payment is due 11/20? I expressed knowing what information is required for the form would need to be known by 10/1 so I know what specific information about a purchase to save. She came back from placing me on hold and said something along the lines of, well, it shouldn't matter since you shouldn't be ordering from an unlicensed retailer. I was bit thrown. I replied with something like, I read the statute over several times and there is absolutely no indication of that requirement. There was a bit of fumbling on both ends of line, hum, ahh, but, ennnh, well, mmmm. My ability to remain pleasant had waned and figured I'd save further inquiry for another call. She threw out a "maybe mid-October" for when the form would be available. I thank her for her time and for the help.


Questions for a future call:
1) What are the restrictions on and what actions are permitted by "unclassified importers"?

2) When ordering from out-of-state, how would I know if a shop is a vape shop or not? Note: when asking about parts and materials, I asked what if I purchase VG from Amazon? That was not covered.

3) Liquid nicotine is typically sold by retailers that are not vape shops, the material they sell can not be used in a vaporizer as is, and has other uses. If liquid nicotine, in unvapable concentrations, is purchased from an out-of-state retailer, that is not a vape shop, is that purchase covered?

 

[smokin95]

Great info thanks for sharing

 

[swampergene]

I guess our state employees don't really know state law too well. The answer to number one is illegal per the state constitution...taxes must be applied uniformly. They can't tax an entity based on what they call themselves...hell we have an adult toy store called "condoms galore" that has more vape gear and juice than some "vape shops" I've been in and they sell batteries, wire, cotton, all kinds of hardware. By the state's answer...they wouldn't have to pay or collect any tax.

Anyway...first line in PA constitution:

Uniformity of Taxation
Section 1.
All taxes shall be uniform, upon the same class of subjects, within the territorial limits of the authority levying the tax, and shall be levied and collected under general laws.

 

[Verb]

I guess our state employees don't really know state law too well. The answer to number one is illegal per the state constitution...taxes must be applied uniformly. They can't tax an entity based on what they call themselves...hell we have an adult toy store called "condoms galore" that has more vape gear and juice than some "vape shops" I've been in and they sell batteries, wire, cotton, all kinds of hardware. By the state's answer...they wouldn't have to pay or collect any tax.

Anyway...first line in PA constitution:

Uniformity of Taxation
Section 1.
All taxes shall be uniform, upon the same class of subjects, within the territorial limits of the authority levying the tax, and shall be levied and collected under general laws.

Condoms Galore is the perfect mix of products in one shop to throw the wrench in the gears. I sure hope they apply for an OTP retail lisence to continue selling vape gear and eliquid. How will flavored personal lubricant which consists only of VG, PG, and flavoring be treated when it's sold in the same shop as eliquid? I wonder if they carry any toys that use an 18650.

I'm not sure how it would be handled if a vape shop diversified into a vape, crafts, electronics, and hardware store.

C-stores and Drugs Stores, that will certainly have an OTP lisence, sell many things that are used in a vaporizer.

 

[Verb]

I went back and read the bill again. It's explicitly clear.

"Unclassified importer." A consumer who purchases tobacco products using the Internet or mail order catalogs for personal possession or use in this Commonwealth from persons that are not licensed.

 

[smokin95]

Do you guys know if I were to order a provari from provape.com in October, would I be taxed on it?

 

[Verb]

Do you guys know if I were to order a provari from provape.com in October, would I be taxed on it?

That would be up to you. When ordering from out-of-state, you pay the tax by self reporting. You could put a flashlight head or an atomizer on a provari. It has another use; so, ...

 

[smokin95]

That would be up to you. When ordering from out-of-state, you pay the tax by self reporting. You could put a flashlight head or an atomizer on a provari. It has another use; so, ...

So if I don't pay it I should be fine?