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NATIONAL REPORT — Amidst all the chatter surrounding the Food and Drug Administration’s final deeming rule on tobacco regulation, which is in its final steps to release, convenience store retailers must not forget to monitor what their state and local governments are up to.
State taxes on electronic cigarettes and vapor products have heated up in the past year, with the number of states looking at e-cigarette taxation nearly doubling year over year. In 2014, 12 states considered e-cigarette tax bills. This year, 23 state legislatures and the District of Columbia had bills introduced to tax e-cigarettes.
It’s important to note that states are all over the map in their e-cig tax proposals:
- Seven states proposed to tax nicotine liquid by the milliliter;
- Three states wanted to tax the weight of nicotine by milligram;
- 12 states proposed to assess their existing OTP tax rate on the product; and
- Two states sought to impose their cigarette tax rate on e-cigarettes.
In short, there is no uniform method the states are considering for how to tax e-cigarettes.
Currently, only four states and the District of Columbia have enacted e-cigarette taxes. Minnesota has a 95-percent OTP tax rate; Kansas has a 20-cents-per-milliliter tax; both North Carolina and Louisiana have a 5-cents-per-milliliter tax; and the District of Columbia has a 70-percent OTP tax rate.
At the same time, local governments are getting in on the e-vapor regulation action, too — oftentimes attempting harsher restrictions than the states.
For instance, the Riverbank City Council in California is considering an ordinance that would introduce a licensing system for retailers of e-cigs and other vaping products and also formalize penalties for selling these products to minors, with violators facing a fine of $100 for the first offense, $200 for the second and $500 for the third, while they would risk losing their license for a fourth offense. A year ago, the city also imposed a temporary moratorium on new vaping and hookah bars as it prepared rules restricting such businesses to commercial zones.
The Hutchinson City Council in Kansas is another one in the spotlight lately. It is considering an ordinance that would ban the use of e-cigs in public places where smoking is already prohibited under state law. Exemptions would be provided for private clubs, casinos, race tracks, designated areas of adult care facilities, and vape shops. During hearings on the proposal held in early October, the Reno County Health Department expressed support for the measure, while the Kansas Vapers Association and e-cig shop owners, employees and customers argued against restricting the use of a product that they said is helping people quit smoking.
Editor’s note: For more on the future of tobacco regulation, check out the December issue of Convenience Store News, which contains our special Guide to E-Cigarettes & Vapor. A digital edition of the issue can be accessed by clicking here.