Effective August 1, 2010 a new law stating that E-cigarettes must be taxed as an OTP item in the state of Minnesota.

[skinny]

WTF !?! Effective August 1, 2010 a new law stating that E-cigarettes must be taxed as an OTP item in the state of Minnesota.
I ran across this tonight ,and was shocked. Did I miss something--I have not heard about this--if this is true--we could be in a world of hurt.
Anybody know about this???
Please leave your input and information.

 

[yvilla]

The tax rate - 70% of the wholesale price - is decidedly too high, as fully half of it is due to the "health impact fee" instituted against all tobacco products to "recover for the state health costs related to or caused by tobacco use", something wholly inappropriate for a harm reduction product that is orders of magnitude safer than smoking! (https://www.revisor.mn.gov/st2005/256/9658.html)

However, were it not for the excessive amount, this would actually be good news, as categorizing ecigs as "tobacco products" saves them from any statewide ban on sales to adults in Minnesota, such as our enemies have been trying to get passed in several other states.

So it's a truly a mixed bag of news.

 

[karmatized]

This may help for anyone who is wondering what he is talking about.

i would need to read the actual act to really decipher it.
And if this does effect nicotine as a whole then it would not make ecigs illegal but it would set them to the same standards as cigarettes.

1 you would need to sell local only, suppliers would have to setup a real shop or close up shop.

2 you need to have license to sell tobacco products.


Governor Signs Act to Protect Youth From New Tobacco Products
Joint statement from the American Cancer Society, American Heart Association, American Lung Association in Minnesota, Association for Nonsmokers - MN, Blue Cross and Blue Shield of Minnesota, ClearWay MinnesotaSM, Local Public Health Association and HealthPartners


MINNEAPOLIS, Minn., May 11, 2010 – Today Minnesota’s leading health groups applauded Governor Tim Pawlenty for taking another step to protect youth from harmful tobacco products. This afternoon, the Governor signed into law the Tobacco Modernization and Compliance Act of 2010, which updates Minnesota laws to address new generations of tobacco products.

Effective August 1, 2010, these changes apply existing state tobacco taxes and regulations to new smokeless tobacco products, which attract young customers because they are low-cost, come in candy flavors and sometimes resemble mints and breath strips. Specifically, the Tobacco Modernization and Compliance Act of 2010:
• Expands the definition of tobacco products to include any product that contains tobacco and is intended for human consumption
• Requires all tobacco products to be sold behind the counter so they are not easily accessible to youth
• Prevents the sale of new tobacco products and e-cigarettes to youth

“Broad bipartisan support of this law ensures Minnesota will keep pace with the tobacco industry’s aggressive marketing and ability to take advantage of legal loopholes,” said David Willoughby, Chief Executive Officer of ClearWay Minnesota. “The Governor’s signature is an important first step in protecting our kids from new and addictive smokeless tobacco products.

“But our work is far from done,” Willoughby continued. “Tobacco products remain accessible, affordable and attractive to young people and the consequences are costly. We need to continue to advocate policy solutions that will reduce the harm of tobacco in Minnesota.”

 

[keveck]

I dunno if this is true or not. From the one article I found:
...the Tobacco Modernization and Compliance Act of 2010:
Expands the definition of tobacco products to include any product that contains tobacco and is intended for human consumption

* Prevents the sale of new tobacco products and e-cigarettes to youth

Did they classify it as a tobacco product or not? It doesn't necessarily contain tobacco. And the kits can be sold without any cartridges. So batteries and metal are tobacco products? I'm confused.

 

[skinny]

"• Prevents the sale of new tobacco products and e-cigarettes to youth"

karmatized,
Thanks for the info, I will try to get copy of this law on OTP and e-cigs Monday.
The line above is what we all read about earlier this year, and I thought that was it--MN was going to pass law to prevent minors from buying te-cigs (a good thing!), but never heard they were going to add OTP tax!!
Did MN do a round end on us all--did anyone hear about this OTP tax to e-cigs?
Anyway thanks for the info

 

[karmatized]

well the worst case scenario with this is the suppliers who operate from that state will need to make a decision if they want to really be in this business. If they do then they will have to only sell local products to people face to face and ID check. Also they will have to face the hurdle of charging the tobacco tax on everything.

Anyone local to them is going to have to pay more or order from somewhere else out of state. Remember everyone this is the positive side kind of thing everyone asked for when the FDA started there rampage. This keeps it legal. State makes money and people can still vape.

It sucks but this is not really a bad thing when facing a total outright ban of the product.

 

[yvilla]

Here's the actual law that was passed back in May: https://www.revisor.mn.gov/bin/bldbill.php?bill=S3055.1.html&session=ls86

Section 2 of it is what amends the the defintion of "tobacco products" for purposes of the taxation statute, which is 297F. (https://www.revisor.mn.gov/st2005/297F/)

Section 11 of it amends a different statute, the one that prohibits sales to minors, but similarly by changing the definition of "tobacco products" for purposes of that. (https://www.revisor.mn.gov/statutes/?id=609.685) And section 12 of it also addresses sales to minors.

 

[Bahnzo]

And this is why I say there needs to be a legitimate health study on e-cigs. Otherwise, they are just going to be lumped in with tobacco and treated unfairly.

Also, does this extend to nic patches and gum? If not, e-cigs could find a loophole there.

Edit: From the link..........

Subd. 19. Tobacco products. "Tobacco products" means
cigars; little 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 tobacco; 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; but does not include cigarettes as defined in this
section.

Gotta love how they leave things ambiguous.....

 

[karmatized]

Tobacco products. "Tobacco products" means any products containing,
1.15made, or derived from tobacco that is intended for human consumption, whether chewed,
1.16smoked, absorbed, dissolved, inhaled, snorted, sniffed, or ingested by any other means,
1.17or any component, part, or accessory of a tobacco product

 

[karmatized]

here is the big thing, reading those documents, they never reference a electronic cigarette or the device used to heat the nicotine.

It only references pipes and rolling paper.
Maybe i am wrong but this looks like it only effects the nicotine it self.
If anyone sees where it actually effects the electronic cigarette it self please link it.

 

[yvilla]

Also, does this extend to nic patches and gum? If not, e-cigs could find a loophole there.

No. Just as with the new federal tobacco legislation, that Minnesota took the lead from in making its own new defintion of "tobacco products", the new statute expressly distinguishes between tobacco products sold for recreational use, and pharmaceutical products that would otherwise fall under the defintion of tobacco products because equally derived from tobacco, but that have a "medical purpose" or intended use. This is also found in Section 2.

 

[yvilla]

If anyone sees where it actually effects the electronic cigarette it self please link it.

Bahnzo's post did not contain the new defintion. I did link to it:
https://www.revisor.mn.gov/bin/bldbill.php?bill=S3055.1.html&session=ls86

Here is the relevant part, in red (the underlined parts are new):

Sec. 2. Minnesota Statutes 2008, section 297F.01, subdivision 19, is amended to read:
Subd. 19. Tobacco products. "Tobacco products" means any products containing, made, or derived from tobacco that is intended for human consumption, whether chewed, smoked, absorbed, dissolved, inhaled, snorted, sniffed, or ingested by any other means, or any component, part, or accessory of a tobacco product, including, but not limited to, cigars; little 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 tobacco; shorts; refuse scraps, clippings, cuttings and sweepings of tobacco, and other kinds and forms of tobacco, but does not include cigarettes as defined in this section. Tobacco products excludes any tobacco product that has been approved by the United States Food and Drug Administration for sale as a tobacco cessation product, as a tobacco dependence product, or for other medical purposes, and is being marketed and sold solely for such an approved purpose.

 

[mpetva]

Dumb question here: What does OTP stand for? I for the life of me can't think of anything, LOL. It is probably a very simple answer, but I am drawing a complete blank.....I need to get some sleep!

 

[skinny]

Wow guys, can't believe how fast you come back with info about this. I've been searching about the same time as you, and just now getting to these parts...thanks so much!
I would view this as a good thing because it starts things rolling the way we want (I guess), but I think it is much too soon since the Gov, and or FDA have not set a guideline yet. Besides the wording does not really point out what they plan to tax on this. Is it the juice? The cartridge with juice? do batteries alone get taxed too? AND how much? A pack of smokes is taxed at so much (20 cigs), are they going by cart...I mean really MN... think this through a little!!!!

 

[skinny]

OTP = "Other Tobacco Products"

 

[mpetva]

OTP = "Other Tobacco Products"

Thank you! I knew I should have been able to figure that out, but ........

 

[rothenbj]

Bahnzo's post did not contain the new defintion. I did link to it:
https://www.revisor.mn.gov/bin/bldbill.php?bill=S3055.1.html&session=ls86

Here is the relevant part, in red (the underlined parts are new):

Sec. 2. Minnesota Statutes 2008, section 297F.01, subdivision 19, is amended to read:
Subd. 19. Tobacco products. "Tobacco products" means any products containing, made, or derived from tobacco that is intended for human consumption, whether chewed, smoked, absorbed, dissolved, inhaled, snorted, sniffed, or ingested by any other means, or any component, part, or accessory of a tobacco product, including, but not limited to, cigars; little 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 tobacco; shorts; refuse scraps, clippings, cuttings and sweepings of tobacco, and other kinds and forms of tobacco, but does not include cigarettes as defined in this section. Tobacco products excludes any tobacco product that has been approved by the United States Food and Drug Administration for sale as a tobacco cessation product, as a tobacco dependence product, or for other medical purposes, and is being marketed and sold solely for such an approved purpose.

I don't see how they could include the electronic cigarette in this legislation. The liquid and filled nic carts seem to be covered under the regs, but not the PV itself. If I'm just buying the device, there is no tobacco product and if they're going to argue that its purpose is to use with nicotine so is a pipe or rolling paper for that matter.

 

[PlanetScribbles]

Zero nic users do not use any tobacco product at all in their e-cigs. Just PG/VG and food flavouring. Therefore they are not liable for this abominable sin tax.

 

[JustJulie]

Personally, as painful and draconian as the tax in Minnesota is, I think this is a step in the right direction and makes it clear that Minnesota doesn't view us as drug delivery devices.

The problem isn't in the classification as "OTP," but, rather, Minnesota's failure to fairly and properly tax tobacco products that are inherently less harmful than cigarettes. In my opinion, this is a result of "charities" actively lobbying to raise taxes on smokeless tobacco products to make them really, really expensive. The idea is that they don't want smokers who are looking to save money to switch to smokeless . . . they want to make it all so expensive that smokers simply quit using tobacco period.

Of course, as we know, many, many smokers won't simply quit, and now there's no financial incentive to switch to less harmful tobacco products. While a small number of smokers will indeed quit as tobacco use becomes more and more expensive, the truth is that by discouraging smokers from switching to smokeless tobacco products, the "charities" and states levying these taxes have embarked on a policy course that will have devastating health consequences to millions.

The "health impact fee" of 35% of the wholesale price is especially galling to me considering that it is levied on products that are inherently less dangerous than cigarettes.

But, like I said, the problem isn't in the classification as "OTP"--the problem is an unfair and grossly inappropriate tax structure.

 

[PlanetScribbles]

Personally, as painful and draconian as the tax in Minnesota is, I think this is a step in the right direction and makes it clear that Minnesota doesn't view us as drug delivery devices.

I see it as a state that has conceded that the FDA won't succeed in getting them classified as drug delivery devices, and is therefore pricing the product out of the reach of all but the most avid users.
It is just a different step in the wrong direction to me, and indicates that there is no rhyme or reason to their logic. The only conclusion I draw is that no matter what we do, they will try to find a way to stop us using them. Even if it means pricing us out of the market. It's an utter disgrace and we need to fight it all the way.