Federal legislation to tax e-cigs if FDA determines it is a "tobacco product"

[Paulette]

It appears that two bills have been recently submitted which could allow the imposition of federal excise taxes on e-cigs IF the FDA finds that e-cigs are "tobacco products" pursuant to the tobacco Control Act.



For an overview summary, please see this article:

Federal Bills Would Subtantially Increase Tobacco Taxes and Allow New Taxes on Electronic Cigarettes — Troutman Sanders Tobacco Team



Here are the relevant portions of the Senate Bill 39 (see paragraph "i") and 194 (see paragraph "i")


Bill Text - 113th Congress (2013-2014) - THOMAS (Library of Congress):

Bill Text - 113th Congress (2013-2014) - THOMAS (Library of Congress):

 

[2coils]

FDA and Congress getting their ducks in a row....we all saw this one coming

 

[Fiamma]

Yeah we did. Glad now I felt paranoid, they ARE out to get us. By the time April gets here I will have more rba's and a couple more mechanical mods in hand. And more nic in the freezer.

They will have to wait a long time to tax me.

 

[2coils]

Yeah we did. Glad now I felt paranoid, they ARE out to get us. By the time April gets here I will have more RBA's and a couple more mechanical mods in hand. And more nic in the freezer.

They will have to wait a long time to tax me.

LOL!! My wife thinks im nuts!! Filling the freezer with nic...and my kitchen is turned into a lab! I will continue to fight the fight, but just in case I'm prepairing for the worst.

 

[NoFez]

It should probably be noted that Durbin proposes this same bill (or an extremely similar one) every year.

 

[Vocalek]

According to this promotional piece by Blumenthal, we smoke-free users are refusing to pay our "fair share" of taxes by taking advantage of a "loophole" in the laws.

Blumenthal, Durbin, Lautenberg Introduce Legislation To Close Tobacco Tax Loopholes | Press Releases | United States Senator Richard Blumenthal

Wonder whether it has occurred to these three geniuses that another name for this bill would be the "Black Market Full Employment Act."

Once again, the organizations that claim to be anti-smoking are stomping all over products that can reduce smoking prevalence.

In a letter to Durbin, American Cancer Society Cancer Action Network President Christopher Hansen, American Lung Association Senior Vice President Paul Billings, American Heart Association CEO Nancy Brown, and Tobacco-Free Kids President Matthew Myers said, “Creating a more equitable tax system, free of loopholes, will help prevent young people from starting to use tobacco products and help current users to quit.” The Tobacco Tax Equity Act is also supported by American Public Health Association.

 

[IRISH BULL]

When companies create e-cig juice, do they always have to use actual tobacco? And if not, how can the FDA find that e-juice is a tobacco product if it doesn't contain tobacco?

 

[Whodoo]

I have the same question. Is the nicotine all extracted from tobacco leaves or is it synthesized somehow?

 

[TennDave]

My understanding is- it does not matter how the nicotine is provided...it's the intended use that defines it as a "tobacco product."

 

[Insignificance]

If the feds wanted to tax alcohol products, wouldn't it stand to reason that they would tax cakes, breads and all other products that contain yeast since alcohol is derived from yeast?

Just employing their logic.

 

[BuGlen]

When companies create e-cig juice, do they always have to use actual tobacco? And if not, how can the FDA find that e-juice is a tobacco product if it doesn't contain tobacco?

I have the same question. Is the nicotine all extracted from tobacco leaves or is it synthesized somehow?

From what I've been able to gather with a small amount of research, the nicotine used in e-liquid is prominently extracted from tobacco right now. Most e-liquid manufacturers do not do the extraction themselves, but rather purchase the consumer grade concentrated nicotine (not industrial grade) from suppliers to mix in their product. While nicotine can be created synthetically, it's just not cost effect to do so on a large scale (yet).

If anyone with more information on this subject would like to expand or correct me, please do. I've only done a limited amount of research and haven't had the chance to cross-reference my sources thoroughly.

 

[chartreuse]

And if not, how can the FDA find that e-juice is a tobacco product if it doesn't contain tobacco?

They employ a special logic that goes "Because Eff You, that's how!"

 

[zoiDman]

It appears that two bills have been recently submitted which could allow the imposition of federal excise taxes on e-cigs IF the FDA finds that e-cigs are "tobacco products" pursuant to the Tobacco Control Act.

...

You might consider changing the "If" to "When".

 

[zoiDman]

FDA and Congress getting their ducks in a row....we all saw this one coming

Most of us did.

 

[IRISH BULL]

I have the same question. Is the nicotine all extracted from tobacco leaves or is it synthesized somehow?

Nicotine is predominantly found in tobacco, which is where I would guess all the e-juice makers get it from. But it is also found in tomato, potato, eggplant, and green pepper. So it would seem to me that a valid argument could be made that e-cigs are not necessarily a "tobacco" product exclusively.

This blog is great resource on some of the behind the scenes regulation when it comes to e-cigs and tobacco.

http://tobaccoanalysis.blogspot.com/

 

[zoiDman]

...

This blog is great resource on some of the behind the scenes regulation when it comes to e-cigs and tobacco.

http://tobaccoanalysis.blogspot.com/

Great Link.

Lots of Good Reading.

 

[Vocalek]

E-liquid manufacturers purchase pharmaceutical grade nicotine which is extracted from tobacco. Tobacco is the most effective source of nicotine. Other plants produce so little nicotine that it isn't economically feasible to use them. Same thing goes for synthetic nicotine.

The e-liquid manufacturers dilute the full strength pharmaceutical grade nicotine with propylene glycol and/or vegetable glycerin to get the content of nicotine down to the percentages we use -- from 0% to 3.6%. If you are using, for example 18 mg/ml liquid, that represents 1.8% nicotine. The quantity of food-grade flavorings that must be added to achieve the desired taste must be factored into the mix as well.

 

[RVLT]

March is stock up month...

 

[sawalke4]

What do they define as an e-cigarette? A cigalike? Does this define every component in a PV like the battery, drip tips, and atomizers as a tobacco product? Since when is a rechargeable battery a tobacco product? Will there be a tobacco tax on the battery in my cell phone also? I'm thinking they are assuming all "e-cigarettes" are disposables like blucigs or njoys that are one complete non detachable unit. At very worst, the disposable cigalikes will get the tax, and possibly eliquids.

 

[skoot]

If the feds wanted to tax alcohol products, wouldn't it stand to reason that they would tax cakes, breads and all other products that contain yeast since alcohol is derived from yeast?

Just employing their logic.

There is no alcohol in bread, it's baked out. Alcohol requires yeast, fermentable sugar and oxygen, so it's the end product they are taxing. There was a big thing about the Feds and kombucha a while ago too, for the same reasons- kombucha contains trace amounts of alcohol and the Feds drove the manufacturers nuts.

My argument is that the Feds don't tax nicotine patches and gum, so why e-juice?