Deeming Regulations have been released!!!!

[Mazinny]

If a State has an Existing Law that say states... "All tobacco Products are Banned from use inside State Buildings."

Does the State need to go back and Amend this Law to include e-Cigarette Use? Or would the Statutory Federal Definition of an e-Cigarette being a "tobacco Product" be enough for Enforcement?

That's a good question. If the statute is worded exactly as you have stated it " all tobacco products ", perhaps no amendment will be needed. It probably depends on how they define " tobacco products " in that particular statute. But the provision of " no cigarette sales over the internet " for example, that some states have, must be affirmatively amended, i believe.

 

[zoiDman]

This will be the day the entire industry dies...

“(i) Other Tobacco Products.—Any product not otherwise described under this section that has been determined to be a tobacco product by the Food and Drug Administration through its authorities under the Family Smoking Prevention and Tobacco Control Act shall be taxed at a level of tax equivalent to the tax rate for cigarettes on an estimated per use basis as determined by the Secretary.”.

section 5701(i) of the Internal Revenue Code of 1986, not later than 12 months after the date that a product has been determined to be a tobacco product by the Food and Drug Administration, the Secretary of the Treasury (or the Secretary of the Treasury's delegate) shall issue final regulations establishing the level of tax for such product that is equivalent to the tax rate for cigarettes on an estimated per use basis.


After reading that I placed one last order to extend my nicotine stash even further.
And I don't even use nicotine at the present time.

So to what Equivalent Amount do you think they will assess e-Liquids to?

 

[WharfRat1976]

The FDA is turning all vapors into Tootle Puffers[emoji22]

 

[Alexander Mundy]

So what is the bottom line here?

• Aug 8th: no new products, existing products now are "tobacco products" and new labeling requirements go into effect? Confirmed ID/Age goes into effect?
• Many states tobacco laws will now (Aug 8th) apply to vaping stuff.
  
• Current products have 2yrs to file for FDA approval or pull their product off the market at the end of 2yrs. (I've heard it said: why file early?)
• Some producers might wait 2yrs before filing and then may get to stay in the market while their products fate is being decided.

Lets not forget this one:

"Among the requirements going into effect on August 8, 2016, all manufacturers of any tobacco product will be required to:

• Register and list every product (domestic manufacturers only). Foreign manufacturers will be required to register and list too, but this will require a separate regulation with its own effective date."

Anyone who mixes eliquid, makes or modifies in anyway a "tobacco product" is a manufacturer. This makes almost all vape shops manufacturers. I believe this is why Zeller said they would be ready with boots on the ground after August 8th. I don't know what the cost is for the registration but how many vape shops do you think will register?

 

[VNeil]

So to what Equivalent Amount do you think they will assess e-Liquids to?

My guess: since cigs are not currently taxed by the nic content it will be based on puff count. But really they can make up any number they want to; my guess is it will be higher than most people paid to smoke.

Some states seem to be trying to get about 1 pack per 2 ml, which is very excessive to say the least.

 

[zoiDman]

That's a good question. If the statute is worded exactly as you have stated it " all tobacco products ", perhaps no amendment will be needed. It probably depends on how they define " tobacco products " in that particular statute. But the provision of " no cigarette sales over the internet " for example, that some states have, must be affirmatively amended, i believe.

I've had this conversation with a Few People who are reasonably knowledgeable in this area. And the Consensus is if a the law was written for "Tobacco Products", that e-Cigarettes would Now be included.

Where things got Blurring is when I asked what would happen if someone was using 0mg in an e-Cigarette. And Most believed that the Courts will strike down the FSA pursued authority over 0mg. But that might be far down the Road.

 

[Mazinny]

Lets not forget this one:

"Among the requirements going into effect on August 8, 2016, all manufacturers of any tobacco product will be required to:

• Register and list every product (domestic manufacturers only). Foreign manufacturers will be required to register and list too, but this will require a separate regulation with its own effective date."

This doesn't go into effect on Aug8, 2016. Dec 31, 2016 is the effective date for 'Registration' and 'Product Listing'

 

[zoiDman]

My guess: since cigs are not currently taxed by the nic content it will be based on puff count. But really they can make up any number they wants do my guess is it will be higher than most people paid to smoke.

Some states seem to be trying to get about 1 pack per 2 ml, which is very excessive to say the least.

It's really a Very Dynamic Question.

Because Taxing per ml does not take into account that use would be Different as per mg/ml. Of course, this is contingent on there being a Wide Margin of mg/ml. Which could Very Likely be small in 2 years. ie, 6mg/ml ~ 24mg/ml.

 

[Mazinny]

I've had this conversation with a Few People who are reasonably knowledgeable in this area. And the Consensus is if a the law was written for "Tobacco Products", that e-Cigarettes would Now be included.

Where things got Blurring is when I asked what would happen if someone was using 0mg in an e-Cigarette. And Most believed that the Courts will strike down the FSA pursued authority over 0mg. But that might be far down the Road.

I think it depends on the state and how they define "tobacco products" in the specific statute.

In Washington state where i currently reside, they define " tobacco products " as such :

"Tobacco products" means cigars, cheroots, stogies, periques, granulated, plug cut, crimp cut, ready rubbed, and other smoking tobacco, snuff, snuff flour, cavendish, plug and twist tobacco, fine-cut and other chewing tobaccos, shorts, refuse scraps, clippings, cuttings and sweepings of tobacco, and other kinds and forms of tobacco, prepared in such manner as to be suitable for chewing or smoking in a pipe or otherwise, or both for chewing and smoking, and any other product, regardless of form, that contains tobacco and is intended for human consumption or placement in the oral or nasal cavity or absorption into the human body by any other means, but does not include cigarettes as defined in RCW 82.24.010.

 

[Lessifer]

Just speculating but I think a tax based on mg/ml will be too complicated to enforce, so it will be a tax per ml or prefilled cartridge.

Now what that tax will be, no idea. If we're unlucky, it'll be, at the federal level, $1 per cartridge, or $1 per ml. More reasonable would be $1 per 10ml, not that any of this is reasonable.

 

[VNeil]

It's really a Very Dynamic Question.

Because Taxing per ml does not take into account that use would be Different as per mg/ml. Of course, this is contingent on there being a Wide Margin of mg/ml. Which could Very Likely be small in 2 years. ie, 6mg/ml ~ 24mg/ml.

It is well known that low tar low mic cigs are smoked at greater rates than regulars. The precident of taxing per quantity has long been established.

That assumes they take the directions in the law seriously but since it is at the discretion of TPTB the discussion is somewhat moot

 

[crxess]

Some states seem to be trying to get about 1 pack per 2 ml, which is very excessive to say the least.

Actually that is Generous if(and they likely are) they are Basing off 2007 cig-a-like @ 6 drops which Claimed Equal to a Pack.

So Ex PAD Smokers now Vaping 30ml/Day are Equal to 50 PAD Smokers

This is all Ridiculous

 

[zoiDman]

I think it depends on the state and how they define "tobacco products" in the specific statute.

In Washington state where i currently reside, they define " tobacco products " as such :

"Tobacco products" means cigars, cheroots, stogies, periques, granulated, plug cut, crimp cut, ready rubbed, and other smoking tobacco, snuff, snuff flour, cavendish, plug and twist tobacco, fine-cut and other chewing tobaccos, shorts, refuse scraps, clippings, cuttings and sweepings of tobacco, and other kinds and forms of tobacco, prepared in such manner as to be suitable for chewing or smoking in a pipe or otherwise, or both for chewing and smoking, and any other product, regardless of form, that contains tobacco and is intended for human consumption or placement in the oral or nasal cavity or absorption into the human body by any other means, but does not include cigarettes as defined in RCW 82.24.010.

... and any other product, regardless of form, that contains tobacco and is intended for human consumption or placement in the oral or nasal cavity or absorption into the human body by any other means, ...

Yeah... And this type of Wording is where thing are Problematic.

Because Nicotine is not Tobacco. Nicotine could be Derived from Tobacco. And Everything we use that has Nicotine in it Is. But Nicotine is Not Tobacco.

Of course, States can Easily Amend existing laws. But that would mean they have to go thru the Legislative Process.

 

[HazyShades]

What's happening is that she said "I'm walking"

 

[zoiDman]

Just speculating but I think a tax based on mg/ml will be too complicated to enforce, so it will be a tax per ml or prefilled cartridge.

...

Unfortunately, this is Yet Another point that BT is pushing. That it is going to be Much Simpler to just Tax Non-Refillable Cartridges.

 

[DC2]

So to what Equivalent Amount do you think they will assess e-Liquids to?

Watching how they have been going about business so far...
I'd say they will wait and see how things progress after August 8th and then decide...

 

[zoiDman]

Just speculating but I think a tax based on mg/ml will be too complicated to enforce, so it will be a tax per ml or prefilled cartridge.

Now what that tax will be, no idea. If we're unlucky, it'll be, at the federal level, $1 per cartridge, or $1 per ml. More reasonable would be $1 per 10ml, not that any of this is reasonable.

BTW - If I, as a Seller, collect and then send in Tax Monies per ml for e-Liquids, what stops me from Cutting the mg/ml level say in half by adding VG and then selling the Results? In that case, only 1/2 of the Total ml's would have been Taxed. And I could Pocket the other 1/2.

Cigarettes were Easy to Control. Cause people would Notice if there were Only 10 Cigarettes in a Pack.

 

[Steamix]

Since, after August, the FDA will have legally deemed e-juice to be a "tobacco product", it will fall under the requirements set forth in s.1129 Tobacco Tax and Enforcement Reform Act. Unless congress acts to specifically exclude it, e-juice "shall be taxed at a level of tax equivalent to the tax rate for cigarettes on an estimated per use basis as determined by the Secretary". For the purpose of estimating potential federal tobacco taxes required by the Tobacco Tax and Enforcement Reform Act, let's assume Europe's currently sought tax equivalency formula of "1ml of juice = 1 pack of cigarettes" was adopted by "the Secretary". The U.S. federal excise tax on a pack of cigarettes is currently $1.006, so the federal excise tax on a 30ml bottle of e-juice would be $30.18. That alone would be devestating, but it doesn't include -state taxes- which for cigarettes are, on average, much higher than the federal excise tax. The median or "average" state tax on cigarettes is currently $1.53 per pack (which doesn't include the hidden $0.45 per pack cost for state MSA payments). We also haven't included the cost of the juice itself which will -no doubt- rise to cover the vendor's expense for FDA application fees that the FDA currently estimates will cost >$400,000 "each". Compared to today's prices, 5 years down the road we could easily see the cost of premium e-juice tripling or quadrupling. We can only hope "the Secretary" chooses a more lenient tax equivalency formula but even then I expect juice prices will, at a minimum, nearly double.

Now let's try to estimate the potential federal excise tax for liquid nicotine based on the same proposed European equivalency formula, 1ml of e-juice = 1 pack of cigarettes. For this exercise let's be optimistic and set 18mg as the baseline nic strength. 1 liter (1000ml) of 100mg nic will make around 5555ml of e-juice at 18mg strength, therefore, for tax purposes, 1 liter of 100mg nic = 5555 packs of cigarettes. The current federal excise tax on a pack of cigarettes is $1.006, so the potential federal excise tax on 1 liter of 100mg nic would be $5588.33. That alone would be devastating but we still haven't addressed -state taxes- or the cost of the nic itself which -no doubt- will rise to cover FDA application fees the FDA currently estimates will cost >$400,000 "each". Could you imagine the cost of a liter exceeding $10K? lol Even if a more lenient tax equivalency formula were used, say 5ml of e-juice = 1 pack of cigarettes, 5 years down the road the cost for that liter of nic could still run in the "thousands". To be honest It wouldn't surprise me if many states eventually ban its sale to the general public. They'll claim it's for children's safety but we'll know the true reason....control/revenue.

No black market , hu, Mr. Zeller ?

If it's anywhere near that, a LOT of farmers in South America will be looking into planting tobacco as the new cash crop ....

 

[Lessifer]

BTW - If I, as a Seller, collect and then send in Tax Monies per ml for e-Liquids, what stops me from Cutting the mg/ml level say in half by adding VG and then selling the Results? In that case, only 1/2 of the Total ml's would have been Taxed. And I could Pocket the other 1/2.

Cigarettes were Easy to Control. Cause people would Notice if there were Only 10 Cigarettes in a Pack.

Sealed packages with a tax stamp? Like cigarettes have. It could still be done, but it would be illegal, and will likely happen a lot.

 

[crxess]

Unfortunately, this is Yet Another point that BT is pushing. That it is going to be Much Simpler to just Tax Non-Refillable Cartridges.

Correct:
PACK Tax on Per Unit Sale
5 x TAX on Refill PACKS(1/2 Carton)

Here is a Scary Thought:

How Many off shore Manufacturers will continue to support a FROZEN Market while Advancing Technology for the rest of the world?