PA 40% Tax Increase!!!!!
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The original 40% tax is being applied to zero nicotine eliquid by the PA DoR. It's a matter of debate, whether or not the passed legislation actually covers zero nicotine.
The proposed replacement $.05/ml tax does not apply to zero nicotine eliquid.
Since Pa. started this BS Tax I would love to see some real statistics on how much sales tax revenue was lost and how much of the proposed Tax they never collected a dime of. Must be one serious Black Market in that state.
They know addicts will pay whatever is required to get their "fix". The OP said it... "...I calmed down over the sticker shock, I realized I just cant give up what I really love and I love to vape!" Personally, I don't crave nicotine laced liquids. I use them, but it doesn't bother me to use zero nicotine liquid. If I want a harder hit, I go heavier on the PG. If they're also taxing PG/VG with the same 40% tax, you may as well buy the nic liquid.
- Apr 2, 2009
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The PA Vape Association, the Vapor Technology Association and PVA's lobbying firm Kinser & Associates (and probably lobbyists for RJ Reynolds and Altria) are now lobbying PA legislators to replace PA's 40% wholesale tax on all vapor products with a $.075/ml tax on e-liquid (to be paid when product is sold to consumer).
While that change would slash the tax on cigalike e-cigs by >95% (as the 40% tax on a $5 wholesale cigalike is now $2, and would decline to < $.075 since cigalikes contain <1ml of e-liquid), the change would increase the tax on most e-liquid (as the 40% tax on a $8 wholesale 60ml bottle of e-liquid is now $3.20, and would increase to $4.50 for 60ml bottles of e-liquid.
The tax change would be a wash for most PA vape shops (i.e. they'd still pay a similar tax) because
the 40% tax on hardware would disappear, because hardware comprises 20%-25% of vape shop sales, and because the new tax would be paid when sold to consumers (instead of when vape shops buy their products at wholesale price) .
Not sure why VTA and PVA's lobbyist urged PVA to endorse a vapor tax change that will greatly benefit Reynolds, Altria and other cigalike e-cig manufacturers, but that will provide little or no tax relief for PA vape shops, while increasing the tax on most e-liquid.
But I wouldn't be surprised if RJ Reynolds and/or Altria lobbyists and/or $$$ was involved.
The PA Constitution requires PA's budget to be approved by June 30 each year, but it often drags on into the first week of July.
While that change would slash the tax on cigalike e-cigs by >95% (as the 40% tax on a $5 wholesale cigalike is now $2, and would decline to < $.075 since cigalikes contain <1ml of e-liquid), the change would increase the tax on most e-liquid (as the 40% tax on a $8 wholesale 60ml bottle of e-liquid is now $3.20, and would increase to $4.50 for 60ml bottles of e-liquid.
The tax change would be a wash for most PA vape shops (i.e. they'd still pay a similar tax) because
the 40% tax on hardware would disappear, because hardware comprises 20%-25% of vape shop sales, and because the new tax would be paid when sold to consumers (instead of when vape shops buy their products at wholesale price) .
Not sure why VTA and PVA's lobbyist urged PVA to endorse a vapor tax change that will greatly benefit Reynolds, Altria and other cigalike e-cig manufacturers, but that will provide little or no tax relief for PA vape shops, while increasing the tax on most e-liquid.
But I wouldn't be surprised if RJ Reynolds and/or Altria lobbyists and/or $$$ was involved.
The PA Constitution requires PA's budget to be approved by June 30 each year, but it often drags on into the first week of July.
Is zero nicotine eliquid covered by the $.075/ml proposed tax? It wasn't in the $.05/ml proposed last year.
- Apr 2, 2009
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Today, the PA House Finance Cmte approved the House bill (HB 1477) to tax nicotine containing e-liquid at $.05/ml on a largely partly line vote (R's Yea, D's Nea).
House Committee Roll Call Votes - 2017 RCS# 806
after the Dems tried to amend the bill to delay its passage
House Committee Roll Call Votes - 2017 RCS# 804
The bill is at
House Committee Roll Call Votes - 2017 RCS# 804
Yesterday, VTA's Jake Bucher and PVA Board Member Amelia Rivera testified to the House Finance Committee endorsing increasing the bill's $.05/ml tax to $.075/ml.
Amazingly, Jake Bucher's testimony included the following false statement: "the per milliliter tax at the point of sale a fairer method of taxation than a wholesale tax".
Seems like the VTA is lobbying for Reynolds and Altria (whose vapor tax burden will decline by >95% if the tax is changed to $.075/ml, while the tax burden on vape shops in PA will remain about the same) while claiming VTA represents small vapor companies and vape shops.
House Committee Roll Call Votes - 2017 RCS# 806
after the Dems tried to amend the bill to delay its passage
House Committee Roll Call Votes - 2017 RCS# 804
The bill is at
House Committee Roll Call Votes - 2017 RCS# 804
Yesterday, VTA's Jake Bucher and PVA Board Member Amelia Rivera testified to the House Finance Committee endorsing increasing the bill's $.05/ml tax to $.075/ml.
Amazingly, Jake Bucher's testimony included the following false statement: "the per milliliter tax at the point of sale a fairer method of taxation than a wholesale tax".
Seems like the VTA is lobbying for Reynolds and Altria (whose vapor tax burden will decline by >95% if the tax is changed to $.075/ml, while the tax burden on vape shops in PA will remain about the same) while claiming VTA represents small vapor companies and vape shops.
I think it does help small shops. The 40% wholesale tax means a shop has 40%more money tied up in inventory, and for a small business, having more tied up in inventory is an extra whammy at income tax time.
The tax on 2 ml of 100mg/ml is $.15. I think the vape shops that survived the past year will figure out how to sell a 30ml bottle without breaking their customers' budgets.
The customers that need 12mg/ml eLiquid might up paying around $.27, maybe half that depending on the concentration.
Not the best, but better than 40% on wholesale, which made it very difficult for shops to carry stock. It was difficult to keep seeing the near empty display cases and want to revisit a shop.
The customers that need 12mg/ml eLiquid might up paying around $.27, maybe half that depending on the concentration.
Not the best, but better than 40% on wholesale, which made it very difficult for shops to carry stock. It was difficult to keep seeing the near empty display cases and want to revisit a shop.
Color me confused. I thought this tax was per ml of finished e-liquid, without regard for nicotine level?
It is for anything except zero.
Zero nicotine eliquid is not included in the proposed taxed. I know my local shop has been selling premeasured prepackaged "boosters" since many eliquids don't come higher than 6mg or 12mg anymore. I forget the brand, but it's not in-house.
At least for the time being, several things are pushing open system eliquid distribution in the direction of zero nic flavored eliquid and nicotine in an unflavored solution sold in a separate package. It's the only way a shop will survive in San Fran, the tax all over Cali going over 60%, uncertainty of zero nicotine eliquids future coverage by the deeming regs, ...
I could be wrong, but I don't think it will be long before it's the way many locations will need to operate.
Ah, I didn't realize that. Makes sense now, thanks.
Yep, I understood it to be a potential loophole for SF's flavor ban.
Unfortunately, I don't see it as a work-around for the Deeming, at least not without a court challenge.
- Apr 2, 2009
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That is correct. A $.075/ml tax is a $4.50 tax on each 60ml bottle, and a $9 tax on each 120ml bottle.
While e-liquid containing 100mg/ml would also be taxed at $.075/ml, very few vape shops and online retailers in PA sell 100mg/ml e-liquid to consumers. Also, the last thing the PA legislature should do is encourage even more vapers to mix their own e-liquids.
I'm curious why you say that, Bill?
The way I see it is: The more who learn how to DIY, the fewer will return to smoking when the FDA's hammer drops next year.
Yeah, I guess it's in the Best Interest of the General Public. For our own wellbeing. To protect us from ourselves...
No DIY for the unruly hoards.
No DIY for the unruly hoards.
- Apr 2, 2009
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As more vapers begin mixing their own e-liquid products, safety will be compromised. The last thing vaping needs is more news headlines like "Child dies after drinking high nicotine e-liquid", "Calls to poison control centers for child nicotine poisonings increase again", etc.
I agree that DIY will sharply increase if FDA's vapor Deeming Ban is implemented next year, but I'm also increasingly confident that it won't be implemented next year.
I think we're all rooting for that, but I think counting on it would be imprudent.
Heads up on a squeeze if the budget shortfall legislation passes today.
$2B gap. $1.3B to be made up by borrowing against future Tobacco Master Settlement payments. The state will definitely step up their efforts to keep folks smoking.
https://www.usnews.com/news/best-st...enate-to-vote-on-plan-to-close-2b-budget-hole
$2B gap. $1.3B to be made up by borrowing against future Tobacco Master Settlement payments. The state will definitely step up their efforts to keep folks smoking.
https://www.usnews.com/news/best-st...enate-to-vote-on-plan-to-close-2b-budget-hole
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