Updated!! Pennsylvania: 40% tax = game over for vape

[Alexander Mundy]

This is a steaming pile of legislation at its best. Totally dumbfounded here concerning a retroactive tax, but quick googling points out it is upheld by the courts the majority of the time to my dismay. This is assuming it is a property tax, not a sales tax since that was already paid. However this appears to be a wholly new tax about which I found this.

Retroactive Taxes | Chadbourne & Parke LLP

"The Court in later cases has clearly distinguished the two cases on the basis that they dealt with the “creation of a wholly new tax” and therefore “their authority is of limited value in assessing the constitutionality of subsequent amendments that bring about certain changes in operation of the tax laws.”24 Thus, while lack of notice is not dispositive, the Court has suggested that lack of notice may violate due process if the retroactive law creates a “wholly new tax.” "

I'm not versed in the subject and didn't stay at a Holiday Inn last night but there might be hope in the courts if anyone can survive long enough.

 

[ST Dog]

there might be hope in the courts if anyone can survive long enough.

Need to act and get a stay. That would delay implementation if the tax until the courts rule on it.

If the tax is upheld it would probably be applied retroactively to the initial date, but maybe not.

But this could spend years in the courts before it actually gets implemented.

 

[bacc.vap]

They're nuts if they think I'll ever pay a retroactive tax on something I've bought years ago. They can put me in jail and pay for my room, board, and meals. How do they think this is going to be a net positive for revenue I don't know.

 

[Newtothevapelyf3]

Honestly this is starting to worry me. It drives me crazy how it is possible that the whole vaping industry could dissapear. The shops everything. As a successful vaper, who quit smoking and hasn't looked back, we all need to come together and put this to an end . In honestly scared to see what Ohio is going to do..... ( that's where I'm from )

 

[Steamix]

buy a bottle.
Get a receipt.
Use same receipt for all subsequent bottles.
'Hmm, this receipt is rather old'
'Well, officer, me's a kinda slow vaper...'

They begging for it.

Kinda perverse anyway. John and Jane Doe held accountable for every penny while at the same time :

 

[MyfriendKaren]

I have posted a lot about this over the months. I fought a lot to keep it from happening. So disappointed about it. Small businesses especially are really going to feel it. Ones I support too. Ugh! My diy skills are lacking but I'm learning because of here. Not cool at all PA!

 

[Vandal]

If every vape shop in PA were to close over this, do you think the government might rethink? I mean, if the point is to get taxes, they just defeated the whole purpose of the tax bill. If there is some other point, well, then I guess they might have accomplished that.

 

[Oliver]

If every vape shop in PA were to close over this, do you think the government might rethink? I mean, if the point is to get taxes, they just defeated the whole purpose of the tax bill. If there is some other point, well, then I guess they might have accomplished that.

It's hard to work out what they're trying to achieve. A number of outcomes are possible, of course, and some of them do bring net revenues to the state ($13m? It's possible).

But, clearly, this puts a significant number of shops out of business. I suspect larger stores will be able to absorb this on products with higher margin, but that's contingent on being able to pay the initial lump sum. Expect fire-sales in PA as soon as the date is known.

I'm wondering what happens to c-store cigalikes and such like. I imagine 40% of wholesale is pretty much the entire retailer margin - so the prices go up in PA or they just get ditched?

But, realistically, if it's $13m the state is after, there must be a tax regime they could institute that brings this in and is actually fair.

This looks punitive to me but, as they say, never attribute to malice that which can be reasonably attributed to stupidity.

 

[retired1]

13 million is peanuts compared to the shortfalls the state is expected to see over the course of the next few years.

Pennsylvania's budget mess is going from bad to worse - Watchdog.org

This was nothing more than an attempt at appeasement to the voters. The actual tax increases the bill provides for will do nothing to close the shortfall gap. But it might get a few of those state congresscritters re-elected since they didn't touch income tax.

 

[Verb]

I went to my local shop yesterday. As written, the tax goes into effect the moment the bill is signed. There is an expectation of an October 1 start date though. They plan on trying to weather the storm.

Consumer possession of gear and liquids that were purchased before the tax was implemented are not contraband. The proper tax was paid at the time of purchase.

I have no idea how this impacts the selling of used gear. Durable tobacco products, vape gear and pipes (pipes are not in the PA legislation but in the FDA deeming) are being totally swept under the rug. After a couple of reads, it appears to me, you would have to sell your used gear to someone out of state to avoid possible issues.

 

[Bob Chill]

13 million is peanuts compared to the shortfalls the state is expected to see over the course of the next few years.

Pennsylvania's budget mess is going from bad to worse - Watchdog.org

This was nothing more than an attempt at appeasement to the voters. The actual tax increases the bill provides for will do nothing to close the shortfall gap. But it might get a few of those state congresscritters re-elected since they didn't touch income tax.

Yea, forcing a bunch of small business to close and adding to the unemployment lines should help close the gap pretty good. They won't even get the standard sales tax from vape products anymore let alone the 40% extortion tax. Sounds like a solid plan if you're a complete idiot.

 

[Verb]

I think PA is the only state to tax legal child tobacco users (by their definition of tobacco product). Still no age restriction for vapor products in PA.

 

[swampergene]

At the very bottom of the bill it explains that with a couple exceptions regarding roll your own, the effective date for Article XIIA is October 1st, 2016.

 

[GBalkam]

So.. I haven't seen how this tax will benefit vapers or e-cig users, or how the revenue will be used to give vapers any kind of say in future policies, or if the tax is to be used exclusively to study vaping and quality control and safety testing. So what I am now asking myself, is... in what way does this tax NOT amount to "Taxation without representation"? Maybe a Pennsylvania Tea Party is due, to show your elected officials what WE THE PEOPLE means? I'm Canadian, but even I know that crap is wrong. At least with tobacco tax, the funds are used to promote non smoking and smoking cessation programs, and education of smokers and potential smokers to the deadly effects of tobacco smoke. But since it has been established that vaping poses none of the risks involved with tobacco smoking.. how exactly is this tax beneficial to vapers? I would suggest a mass protest on December 16. To remind your elected officials what happens when Gov't turns its back on the people it represents and acts contrary to their best interest.

In Nova Scotia, Vape Liquid is SPECIFICALLY named to be tobacco tax exempt. As it is in most of Canada. (and I daresay, most of the United States) Slap them idiots back down into their place. We know what happened during prohibition, isn't this just the same, except with vape juice, which imo is far less dangerous than alcohol. LOL Maybe next your local police can be given the task of random checks on blood nicotine levels?? To make sure you aren't driving stoned on nicotine. How many cigarettes would that require exactly? OH wait.. you don't get "impaired" on cigarettes or vaping.. just sick if you use to much. (this is blatant sarcasm here)..

Point is.. if you don't like what your gov't is doing, forums are a good start, but if politicians count votes, not likes.

 

[GBalkam]

I think PA is the only state to tax legal child tobacco users (by their definition of tobacco product). Still no age restriction for vapor products in PA.

So they are deeming it ok for kids... but putting a tax penalty on vape products. Am I the only one that this sounds a tad hypocritical to?

 

[CMD-Ky]

First they came for the Socialists, and I did not speak out—
Because I was not a Socialist.
Then they came for the Trade Unionists, and I did not speak out—
Because I was not a Trade Unionist.Then they came for the Jews, and I did not speak out—
Because I was not a Jew.
Then they came for me—and there was no one left to speak for me.

Too many have remained silent as the government intruded on our liberty for too long. Now they have come for you and you are stunned.

 

[bnrkwest]

When I lived in PA years ago they grew quite a bit of tobacco there, it was pretty friendly toward all tobacco products, geez has it changed ! I am surprised PA doesn't have a right to breath tax, they tax everything!

 

[mattiem]

Well, I have slept on it and I have come to the conclusion that someone has been paid a boat load of money to pass this garbage but then I already suspected that to be the case. The bottom line is that all government from the lowest to the highest seats have been corrupted by greed. The sad part is, the majority of Americans don't or can't see it because it hasn't touched them personally.

You are so right @CMD-Ky , I woke up thinking the exact same thing this morning

 

[classwife]

This is just mind boggling !

Here's my 2 cents...
If I lived within a state line, I would make it clear that I would be making no more purchases of any item in the state.
Groceries, gasoline...nada.
I would make it clear that they lost all of my purchases.

 

[Str8vision]

Consumer possession of gear and liquids that were purchased before the tax was implemented are not contraband. The proper tax was paid at the time of purchase.

.

Absolutely correct, so long as you keep the receipts or invoices showing that you paid the "proper" and legal taxes at the time of purchase (even if that was zero $) you're good to go.