Is taxing vaping impractical?

[ronnbert]

North Carolina has a Tax on E juice 5 cent per mil
http://www.reuters.com/article/2014/05/29/us-usa-cigarettes-north-carolina-idUSKBN0E92C020140529

Joe Barnet of the vaping Militia has Stated the 2015 will the the Year of States Passing Taxes on Electronic Cigarettes

States push to regulate, tax booming e-cigarette industry | Fox News

While I am late to replying to this, there is currently no tax in NC on e-liquids. It has been approved, but has yet to be put into effect.

I work in a B&M and we are prepping for the tax (since all liquid we currently have is grandfathered in), but we have yet to see any info on extra tax.

 

[Lisa Belle]

Since the 1960's projections of boomer's demises surmised by cold calculating money grubbbers counting their rotten golden eggs before they were hatched.

 

[sofarsogood]

While I am late to replying to this, there is currently no tax in NC on e-liquids. It has been approved, but has yet to be put into effect.

I work in a B&M and we are prepping for the tax (since all liquid we currently have is grandfathered in), but we have yet to see any info on extra tax.

Have they given you a firm date for the new tax? How much will it be? Does the wholesaler pay it or the shop at point of sale? Can unsellable product be returned for a refund? Does the tax apply to devices? Have they restricted private purchase of nic for DIY? Sorry for all the questions.

 

[ronnbert]

Have they given you a firm date for the new tax? How much will it be? Does the wholesaler pay it or the shop at point of sale? Can unsellable product be returned for a refund? Does the tax apply to devices? Have they restricted private purchase of nic for DIY? Sorry for all the questions.

While I am not the manager, I have stayed as informed as possible.

No firm date yet as far as I am aware. I have heard from multiple sources 5 cents per mililiter of liquid (nicotine or not). If I am not mistaken the shop incurs the tax when inventory is received and all inventory sheets will have total taxable liquid number on top. Also, I have heard any liquid we currently have when tax takes effect is grandfathered in and will be taxed. Not sure if wholesaler would be taxed unless based in NC.

Highly doubt any unusable product can be returned for credit tax-wise, gubbermint doesn't act like that. Devices are devices, not liquid, so probably won't be taxed (for now, til they can find a way). Highly doubt any restriction on private purchase of nicotine, just taxes.

All in all, I do think this tax will affect the end user, because if shops have to pay more for stuff with the tax, I feel like this will be passed down to the user. While I feel like this tax is much better than others (95% wholesale price??? Really??), I feel like 5 cents is still a bit much unless there is a cap. It is going to kill businesses that cannot compete with others and still make profit with this added cost.

 

[sofarsogood]

No firm date yet as far as I am aware. I have heard from multiple sources 5 cents per mililiter of liquid (nicotine or not). If I am not mistaken the shop incurs the tax when inventory is received and all inventory sheets will have total taxable liquid number on top. Also, I have heard any liquid we currently have when tax takes effect is grandfathered in and will be taxed. Not sure if wholesaler would be taxed unless based in NC.

Highly doubt any unusable product can be returned for credit tax-wise, gubbermint doesn't act like that. Devices are devices, not liquid, so probably won't be taxed (for now, til they can find a way). Highly doubt any restriction on private purchase of nicotine, just taxes.

All in all, I do think this tax will affect the end user, because if shops have to pay more for stuff with the tax, I feel like this will be passed down to the user. While I feel like this tax is much better than others (95% wholesale price??? Really??), I feel like 5 cents is still a bit much unless there is a cap. It is going to kill businesses that cannot compete with others and still make profit with this added cost.

That amount of tax isn't devestating but if the shop is reponsible for the record keeping and payments it's a hastle and increases the cost of doing business. I suppose the shop needs to deal with the paperwork because otherwise you couldn't sell liquid made out of state. If there is no interference with consumer mail order it just pushs people there sooner which isn't good for local jobs.

Taxing zero nic is questionable. They don't have the argument of derived from tobacco. They might as well have a special tax on cell phones and baby food.

Thanks for the feed back. It would be interesting to hear more once your shop is paying the tax.

 

[ronnbert]

That amount of tax isn't devestating but if the shop is reponsible for the record keeping and payments it's a hastle and increases the cost of doing business. I suppose the shop needs to deal with the paperwork because otherwise you couldn't sell liquid made out of state. If there is no interference with consumer mail order it just pushs people there sooner which isn't good for local jobs.

Taxing zero nic is questionable. They don't have the argument of derived from tobacco. They might as well have a special tax on cell phones and baby food.

Thanks for the feed back. It would be interesting to hear more once your shop is paying the tax.

IIRC the law states that 0mg nic liquid is still applicable. It can be quite a hassle.

I will probably update here if/when we start paying the tax if it isn't months from now.

 

[bobwho77]

That amount of tax isn't devestating but if the shop is reponsible for the record keeping and payments it's a hastle and increases the cost of doing business. I suppose the shop needs to deal with the paperwork because otherwise you couldn't sell liquid made out of state. If there is no interference with consumer mail order it just pushs people there sooner which isn't good for local jobs.

Taxing zero nic is questionable. They don't have the argument of derived from tobacco. They might as well have a special tax on cell phones and baby food.

Thanks for the feed back. It would be interesting to hear more once your shop is paying the tax.

I think some kind of excise tax on ejuice, and vaping gear probably IS inevitable (If the FDA doesn't regulate vaping as we currently have it out of existence)
They don't really need an argument derived from tobacco. Zero nic ejuice is STILL ejuice.
The political realities are these; BT/BP are going to start feeling the bite, from people switching to vaping. They are going to push these taxes on the state, and federal level, to slow down their competitors, and they have the political muscle ($$$$$) to do so.
States looking to fill holes in their revenue stream from lost tobacco sales/settlement funds are looking for an easy out, and (encouraged by BT/BP) they're going to take it.
If you think the FDA deeming vaping as a tobacco product, and denying it's usefulness in smoking cessation is a mistake, you're BADLY mistaken.
It puts us right where they want us, as a taxable product with a "Proven" list of harm. (Thanks to BT/BP) The REAL powers pushing for taxing/regulating the vaping industry don't even care if what they're saying is true, or not, (What's wrong with a little "Misinformation", if it gains you a market advantage?) If they can't eliminate the market, at the very least they'll be in a position to control it.

 

[sofarsogood]

The REAL powers pushing for taxing/regulating the vaping industry don't even care if what they're saying is true, or not, (What's wrong with a little "Misinformation", if it gains you a market advantage?) If they can't eliminate the market, at the very least they'll be in a position to control it.

There is lying and everybody knows its lying and everybody knows everybody knows. They get away with it because the public agress with the goals of the liars. I don't see anything that's going to change the situation except may be in the courts.

There is a hopeful sign that seems to be getting ignored. Several days ago in Nevada a judge ruled on a dispute between a 7-Eleven and the landlord. The 7-Eleven complained the landlord violated an agreement in the lease by allowing a vape shop to open in the strip because it sold a competing tobacco product. The judge ruled thet the lease was not violated because vape stuff is not tobacco. I've written the defendant's attorney and asked if she might send me the decision.

Several days have passed and only one news source on the entire planet has reported it. That would be because it's an inconvenient development. I think it is a legal cross roads. Would the courts agree if a 7-Eleven said a CVS pharmacy can't sell patches and gum because they are tobacco products? Local governments are scrambling to limiting vape shops while doing nothing to limit places that sell tobacco.

 

[Bunnykiller]

if states begin to tax juice, stores ( B&Ms) will just hike up the price..... and keep selling it... doesnt seem to have damaged the sales of ciggies that much, there are plenty of stores that sell ciggies ( but higher taxation of ciggies did steer me towards vaping)

 

[ronnbert]

There is lying and everybody knows its lying and everybody knows everybody knows. They get away with it because the public agress with the goals of the liars. I don't see anything that's going to change the situation except may be in the courts.

There is a hopeful sign that seems to be getting ignored. Several days ago in Nevada a judge ruled on a dispute between a 7-Eleven and the landlord. The 7-Eleven complained the landlord violated an agreement in the lease by allowing a vape shop to open in the strip because it sold a competing tobacco product. The judge ruled thet the lease was not violated because vape stuff is not tobacco. I've written the defendant's attorney and asked if she might send me the decision.

Several days have passed and only one news source on the entire planet has reported it. That would be because it's an inconvenient development. I think it is a legal cross roads. Would the courts agree if a 7-Eleven said a CVS pharmacy can't sell patches and gum because they are tobacco products? Local governments are scrambling to limiting vape shops while doing nothing to limit places that sell tobacco.

I am sure many people here on the forum would love to see the judges' official ruling on this case as it would provide precident for other cases (not that I am a lawyer or even play one on TV, but it couldn't hurt).

if states begin to tax juice, stores ( B&Ms) will just hike up the price..... and keep selling it... doesnt seem to have damaged the sales of ciggies that much, there are plenty of stores that sell ciggies ( but higher taxation of ciggies did steer me towards vaping)

Extra cost may affect people making the switch though. The lower price point of vaping is a big selling point for many people. Not that it will stop people from mking the switch, just make it a bit less appealing. If taxes appease the trolls and keep vaping legal, I am sure many people wouldn't mind paying a biy extra though. I knew tax was inevitable, maybe it will give me the kick in the pants I need to DIY.

 

[Alawot]

Well there is a 'bit extra' and then there is 'Outragous' Ohio is considering a bill that would add the following taxes:
10 ml bottle -- $11.25 (tax equivalent of 5 packs of cigarettes)
15 ml bottle -- $16.87 (tax equivalent of 7 ½ packs of cigarettes)
30 ml bottle -- $33.75 (tax equivalent of 15 packs of cigarettes)

 

[sofarsogood]

Well there is a 'bit extra' and then there is 'Outragous' Ohio is considering a bill that would add the following taxes:
10 ml bottle -- $11.25 (tax equivalent of 5 packs of cigarettes)
15 ml bottle -- $16.87 (tax equivalent of 7 ½ packs of cigarettes)
30 ml bottle -- $33.75 (tax equivalent of 15 packs of cigarettes)

But what what is the effect of doing that. If they try to tax the devices and 0 nic with tobacco authority I would expect it to be challenged in court and I bet the government would lose. If they don't do those things all they've done is reduce the number of shops and the number of people switching . Another thing that would do is create a rather robust black market since the liquids are so easy to make.

 

[kkay59]

I am sorry but that is freaking I N S A N E. Those people who come up with this stuff are just flat out CRAZY.

Well there is a 'bit extra' and then there is 'Outragous' Ohio is considering a bill that would add the following taxes:
10 ml bottle -- $11.25 (tax equivalent of 5 packs of cigarettes)
15 ml bottle -- $16.87 (tax equivalent of 7 ½ packs of cigarettes)
30 ml bottle -- $33.75 (tax equivalent of 15 packs of cigarettes)

 

[Rossum]

I am sorry but that is freaking I N S A N E. Those people who come up with this stuff are just flat out CRAZY.

Yes they are. At $33.75 for a 30ml bottle, the tax avoidance potential for each 1 liter bottle of 100 mg base is $6000 or more, and you can get that bottle right now for around $60...

 

[NorthOfAtlanta]

Yes they are. At $33.75 for a 30ml bottle, the tax avoidance potential for each 1 liter bottle of 100 mg base is $6000 or more, and you can get that bottle right now for around $60...

And they think this won't cause a black market.



Just for grins, I vape at 8 mg/ml that works out to ~11000 ml of mix or $12,380.00 tax, no reason for me to try the black market.

 

[e-pipeman]

The Eu appears to be thinking very hard about taxing e-cigs right now, according to Breitbart.

 

[Rossum]

And they think this won't cause a black market.



Just for grins, I vape at 8 mg/ml that works out to ~11000 ml of mix or $12,380.00 tax, no reason for me to try the black market.

Yep, I'm at 15 mg/ml, which is why my number came out to only about half yours, but the point remains.

Of course some tax-friendly people will reply, "Well when all the states or the federal government have such taxes, there won't be any 'tax avoidance' possible."

Oh really? Calculate the tax avoidance potential of a single 55 gallon drum of PURE nic smuggled into the country.

You say it's too hard to get a 55-gallon drum in? OK, bring it in one liter at a time, disguised as a bottle of booze.

Now personally, I'm not big on trying to smuggle stuff across borders, but numbers like this make me think about building a walk-in freezer.

 

[zoiDman]

What I think Needs to be asked of any Policy Makers is "Why does e-Liquid use Need to be Taxed at a Rate that is Higher than Conventional Cigarettes Taxes?".

And then one should Ask what are these e-Liquid Tax Revenues are going to for?

 

[Rossum]

And then one should Ask what are these e-Liquid Tax Revenues are going to for?

Same as any other taxes; to buy votes and keep them in power.

 

[stevegmu]

Most of the tax money will get wasted; like it usually does. I imagine NJOY, BLU and BT will successfully fight the tax. They have the most to lose... Either way, I buy online...