Pennsylvania Vape shops see partial win in tobacco tax court case

[WorksForMe]

"According to the tobacco Products Tax Act, also known as TPTA, an electronic cigarette is defined as an electronic oral device, such as one composed of a heating element and battery or electronic circuit, which provides a vapor of nicotine.

Sanders says only five percent of his store’s inventory meets this definition, and that’s when he filed a suit with the Commonwealth Court."

Vape shops see partial win in tobacco tax court case

Here is the actual ruling:

 

[r77r7r]

Ty for sharing this! If the shops re open maybe they'll get the taxes they need.

 

[mcclintock]

That still means that a person starting out, making the investment in equipment and risking they won't like it, is highly affected. Not that taxing ejuice instead would be better if the total tax is much more, but maybe it would be more sensible to tax it lightly than tax equipment heavily... if they can anyway justify a tax at all. No New Taxes!!

Re: comments in that article like '“Why should people that are smoking a pack of cigarettes and somebody smoking something else not pay the tax?” said another.' -- that's not the justification for the tax. It is supposed to deter smoking, which vaping is not. It is supposed to help pay health costs, which vaping should reduce, although some research could be funded.

One often cited advantage of vaping is reduced cost. This is far more true where tobacco taxes are high.

Preaching the choir here, but needed saying.

 

[r77r7r]

@Bill Godshall

 

[WorksForMe]

Big tobacco is not going to like this. If I'm reading it right, their cigalikes and maybe their HnB devices will be taxed, but most things sold in vape shops won't.

 

[stols001]

That is so cool.

LOL I love the whiny smokers quotes at the end. If it's so "unfair" maybe they should switch to vaping.

Not that I think EITHER should be taxed as much they do, but if it's "Unfair that they're ONLY vaping to get nic, why should it be cheaper?" etc., quote was my personal fave.

If you are ONLY smoking for the nic, perhaps you should pick up this useful strategy called vaping. LOL.

Although, I also acknowledge it is HARD to quit smoking and etc.

Anna

 

[r77r7r]

Big tobacco is not going to like this. If I'm reading it right, their cigalikes and maybe their HnB devices will be taxed, but most things sold in vape shops won't.

Yeah I guess it's been about a year since most of our Pa shops closed but iirc it was mostly wick, wire, and atties along with an entire wall of juice. Very little mtl or starting kits.

 

[Bill Godshall]

On Friday, the PA Court also made the same ruling in a similar case filed by Kingdom Vapor
The Commonwealth Court has made their decision: Kingdom Vapor Emerges Victorious

That court ruling is at
Commonwealth Court Decision 697MD 2016_6-22-18 (2).pdf

Even more good news for vape shops in PA on Friday as Gov. Wolf signed next year's budget into law
Governor Wolf Signs Multiple Bills as Budget is Passed

During the past month (as we awaited the court rulings on these cases), I was concerned that if a court victory for the vapor companies was announced prior to the PA budget being signed, the Gov might lobby to change the definition of "e-cigarette" and insert it in the budget bill (so it would tax all vapor product components, and over-ride the court ruling).

 

[zoiDman]

"According to the Tobacco Products Tax Act, also known as TPTA, an electronic cigarette is defined as an electronic oral device, such as one composed of a heating element and battery or electronic circuit, which provides a vapor of nicotine.

Sanders says only five percent of his store’s inventory meets this definition, and that’s when he filed a suit with the Commonwealth Court."

Vape shops see partial win in tobacco tax court case

Here is the actual ruling:

From the Ruling...

"The Court hereby DECLARES that such "integral" component parts of an e-cigarette are not taxable under the TPTA."

I would call that a Big Win!

 

[r77r7r]

In laymen's terms?....

 

[zoiDman]

In laymen's terms?....

So it sounds like the Authority under which Pennsylvania collects their Tobacco Taxes wanted to collect Tax on just about Everything in this Guy's Vape shop. Because they said that it was All a "Tobacco Products".

But the Judge agreed with the Vape Shop. And ruled that things like "Component Parts" (ie: Replacement Coil Heads, Bare Coils, Drip Tips, etc) were Not a Tobacco Product under the PA Definition of what a Tobacco Product is in the PA Tax Law.

So they Were Not to be Taxed.

Like I said, I would call this a Big Win. It is just Sad that it takes going to Court to have a Judge make a Common Sense type Ruling. But I guess it Is what it Is.

 

[WorksForMe]

It's really sad how many vapor businesses were driven out of business because PA Department of Revenue misinterpreted the law.

 

[zoiDman]

It's really sad how many vapor businesses were driven out of business because PA Department of Revenue misinterpreted the law.

And to Add Insult to Injury, didn't a Bunch of PA Congressmen come forward and say that the Law was a Screw Up? And that they were going to Fix It?

 

[stols001]

Whether it's a shame or not (and it is) that it took to this point, it's still a win. Period. And I'm glad one judge saw sense. Etc.

Anna

 

[Bill Godshall]

Please note that many/most vape shops in PA never paid the 40% excise tax on vapor product components, and that components account for <10% of vape shop revenue.

And although the 40% tax reduced vapor sales in PA during the first year it was imposed, many/most vape shops in PA are now selling as much or more vapor products than they did before the 40% tax was imposed.

 

[WorksForMe]

Please note that many/most vape shops in PA never paid the 40% excise tax on vapor product components, and that components account for <10% of vape shop revenue.

Could you explain this? A lot of people here(myself included) believe that many vape shops in PA closed, because they couldn't afford to pay the tax.

 

[Bill Godshall]

While perhaps 20% of vapor manufacturers and vape shops in PA closed after the 40% tax was imposed in 2016
(just after FDA imposed the Deeming Rule that banned all vapor sales in the US on 8/8/2018, which Gottlieb subsequently delayed until 8/8/2022), many/most of the vapor manufacturers and vape shops in PA that stayed in business are now selling more vapor products (in $$$) than they did before the tax was imposed.

Daily vapers who buy vapor products from brick and mortar vape shops in PA (with the 40% tax) still spend far less money than daily smokers spend on cigarettes.

Please note that PA's 40% vapor tax imposes a low tax on PA vape shop customers than does WV's $.075/ml tax on e-liquid.

Unfortunately, RJ Reynolds and Altria have given lots of money to VTA (the Vapor Technology Association) to lobby for per ml taxes on e-liquid by falsely claiming a per ml tax on e-liquid is fairer than a % of price tax (i.e. ad valorem) for vapers.

 

[Rossum]

So what exactly is a "component"? If I order a mod (but no liquid) from out-of-state, do I owe the tax?