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Some Politicians See An eCig Tax As A Cash Cow

By Tyler McCanus

Tuesday May 19, 2015
an ecig tax could fill government budgets

While we look at ecig companies and see the products behind them, such as ecig tanks and ecig juice, some politicians look at them and see a cash cow. Or maybe a herd of cash cows would be a more apt description. An ecig tax could create a cash influx for federal and state budgets.

Over the past eight years, we have seen the perception of the electronic cigarette change numerous times, often doing so quickly. First ecigs were basically labeled as fake cigarettes, nothing more and nothing less. Then they become a phenomenon that could help people, and hundreds of ecig brands popped up left and right. The next stage came with them being labeled as dangerous and many politicians taking tough to legislate against them.

As it stands now, it looks like the next turn in this voyage of ecigarettes takes us to where they are looked at as cash creators. It’s almost like a final step in acceptance, but not quite. The move to invoke an ecig tax has been building and many of us have seen it coming, but now it looks like many politicians are going after these dollars with no holding back.

Take for instance Governor John Kasich of Ohio. He has a new budget proposal for his state that includes significantly raising the costs of products such as ecig juice and ecig tanks by installing an ecig tax thereby taxing them like tobacco. This could bring the state an estimated $22.3 million in the next two years, which is certainly no smaller figure.

Although they aren’t trying to frame it that way, this is clearly a method of extracting some tax dollars out of an easy-to-target growing industry. “It really is a matter of uniformity of tax for nicotine-delivery products,” said Gary Gudmundson, the state’s taxation department communication director. But by increasing the price of ecig juice by over 50% with the additional ecig tax, the state would be hurting a lot of people.

Not only would an ecig tax that caused an increase in prices hurt ecig brands and vapers themselves, but they would clamp down on small business owners. Or as president of the American Vaping Association Gregory Conley said, “That’s the ultimate stab in the back to small businesses.”

Ohio isn’t the only state that wants to target an industry that can no longer just be called fake cigarettes, but must be understood as a brand new market for smokers. There has been talk of an ecig tax in Florida recently too.

How Will An eCig Tax Impact Vapers And Small Business?

how much will an ecig tax affect prices and vaping overallSmall business owners like Shannon Ikner see all this ecig tax talk as a way for the government to recoup the lost tax potential of traditional tobacco cigarettes.

“The government is trying to get their hands in it because we’re putting tobacco out of business,” Iknew insists.

With smoking rates at an all-time low, this type of assumption does have some merit.

If tax money from tobacco cigarettes dries up, it is only logical that substituting it with a new revenue source such as, of course, an ecig tax on items such as ecig tanks would be a goal.

If politicians are looking at the industry and seeing it as a potential cash cow, it would mean a few things for consumers. First of all it means we should prepare to pay more for our ecig juice and other items. It may happen gradually, and there will be lots of dragging and screaming along the way, but it would still seem likely to happen.

The injustice of it all won’t change the facts, especially when there is big money at play here. It would just be naïve to assume things will stay the way they are given the stakes. That doesn’t mean we should stop fighting, but we shouldn’t shut our eyes to the likely result.

But what this movement by politicians does say, and we can take this as a sort of silver lining, is how permanent the industry has become. Don’t forget that these “fake cigarettes” were discounted as a passing fad by most. Even when a slew of ecig companies got in the game, it was still seen as just a fly-by-night way to make money. But this clearly isn’t the case anymore, both because of the success of vaping and the subsequent entrance of Big Tobacco into the industry.

No, electronic cigarettes aren’t going anywhere. The market will change and FDA regulations may add some burdens, but the future of vaping is still very bright despite any impending ecig tax. That’s a take away from all of this that we can be excited about, even as we keep a wary eye on the people looking to exact their share of money from electronic cigarette revolution.
Happy Vaping!





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