Pennsylvania to Vape Shops: Pay 40% Tax or Drop Dead

Republicans and Democrats join hands to pass a crushing tax

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Welcome to Pennsylvania

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Pennsylvania dealt a death blow to many vape shops yesterday, passing a brutal tax that most, if not all, will be unable to afford. The tax was part of the state budget bill that got bipartisan support. It defines e-cigarettes and vapor products as “tobacco products” (but exempts cigars from being considered tobacco).

The tax could destroy many stores. Chris Hughes, owner of FatCat Vapor Shop in Montoursville and president of the state’s SFATA chapter, explained it on the store’s Facebook page.

The state just passed a 40% wholesale cost tax on vapor products. This tax includes a “floor tax” that requires that every vape shop in PA write a check to the state for 40% of the wholesale value of their entire inventory. No shop can pay this tax so all shops will be out of business.

Can we please get serious about this?

Pennsylvania vapers: get mad...and get even!

For anyone interested in blaming one political party or the other, skip it. This one got support from both parties, as moderate Republicans joined Democrats to pass the budget. Vapers in Pennsylvania should look at the votes (here and here), and call their own house members and senators to express how disappointed you are. Then you should vote them out. And don’t forget Gov. Tom Wolf. He signed the bill within minutes of its passage.

In the end, the $13.3 million in tax revenue the bill’s authors promised will never appear, because many of the stores will probably be gone. The state will actually lose money, because a bankrupt business doesn’t pay sales, business or property taxes, and its employees will be out of work and drawing unemployment and other state benefits.

Vapers everywhere: do something now!

If there are vapers who still aren’t registered to vote, who still aren’t CASAA members, who still aren’t aware of what’s going on, please find them and slap them in the face with this vote. It should be a wake up call.

Pennsylvania becomes the sixth and largest state with a tax on vape products, joining Kansas, Louisiana, Minnesota, North Carolina and West Virginia. Bills have been introduced in several other states. Every vaper should be a CASAA member and take action the second legislation pops up.

Even in a state with a very active SFATA group, this can happen. Chris Hughes is like the Tasmanian devil of vaping advocacy, but even he wasn’t able to prevent this, because even with all the work they’ve done, Chris and his group still haven’t been able to get enough vapers organized to scare legislators away from actions like this. Pennsylvania is the fifth largest state in the country. Other states will watch this and take cues from the reaction.

Think it can’t happen where you are? Think again. And do something about it. Make your legislators afraid of us.

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Jim McDonald
I spend most of my time studying the regulatory, legislative and scientific challenges to vaping, advocating for our right to exist, and talking with others who do the same. Consider me a source for information, and feel free to agree or disagree with anything I say. I love good coffee and sweet Michigan cherries. My childhood hero was Gordie Howe.
  • SouthOkanagan

    Hmmm, for a State Government to clearly create a tax just to shut down or cripple a legal, legitimate business has to be some sort of violation of rights. Should everyone just go back to buying their pack of cigarettes & start smoking again? Yeah, that’s gonna be a healthy alternative and cost effective thing to do, no wonder the U.S. health system sucks ass! They do this crap and end up hurting their own health care system!

    There’s room here in Canada, if u all want to come on up here, I’ll understand! 😁

    • Jim McDonald

      It’s an ugly story for sure. I hope vapers in Canada get busy and start a serious consumer organization to engage with Health Canada as they formulate their plan for vaping. Please don’t count solely on a vendor-financed group to handle consultations and negotiations — which, so far, seems to be what’s happening there.

    • Steve

      Will you be sponsoring all the US citizens that want to emigrate? Otherwise, that suggestion is simply unworkable as US citizens are not usually welcome to move to Canada unless they are married to a Canadian citizen or sponsored by a business guaranteeing them a job. Now if I were for instance a muslim from Syria, then the doors would fly open and I would likely receive a cash buyout and guaranteed income and housing from the Canadian government to move there.

  • Alice Kelly

    the problem as i see it is that most vape shops are mom and pop style. small businesses. they need to unionize for better representation and get a descent lawyer for a class action law suit
    the consumer has little if any power. we spend five or 10 bucks on liquid. not millions or billions

    • Jim McDonald

      There is a strong SFATA chapter in PA (businesses don’t exactly have unions per se, but trade associations like SFATA) — but more stores are needed to make it more powerful. They don’t really have grounds for a lawsuit. They need to convince the legislature to change the law.

      • Chainvapor

        They do not have grounds for a lawsuit?? Taxation of a product above and beyond sales tax requires that product have some extra risk involved. Since their is no real risk to vaping (that they can prove) the taxation is unlawful. Next they will put a 40% tax on gas, or toys. Why, because they are proving they can. I am really surprised that the vape shops don’t just stay open and ignore the law. We as United States citizens are obligated to ignore unjustified laws. There is absolutely NO reason to tax ecigs any higher than other consumer products. I know nobody wants to get fined or arrested, but if ALL the vape shops ignored this stupid tax, what would they do? Arrest all vape shop employees? I think all Vape shops in a state need to get together on Facebook or some other social media and converse with one another. If ALL of you ignore the law, I would be shocked if you did not get a TON of media attention which you could turn into a positive for vaping. I would also be shocked if the government tried to enforce the law on every vape shop if ALL of them stood their ground.

        In Conclusion I know this all sounds nuts and I do not own a vape shop so I really have no room to talk here. But if you are going to go out of business anyway because of a stupid tax, why not hold your ground until you are FORCED to go out of business.

        • Jim McDonald

          While I agree with everything you say about the relative risk of vaping, they certainly can tax products that aren’t harmful. Every state I know of *does* tax gas, for example.

        • ManInBlack

          As Jim says, gas is taxed at varying rates by state. I hate to pick apart a very lovely sentiment, but governments can and do levy excise taxes. Excise taxes are taxes paid when purchases are made on a specific good, such as gasoline. Excise taxes are often included in the price of the product. There are also excise taxes on activities, such as on wagering or on highway usage by trucks.

  • Jim Davis

    This is such an insult. Big Tobacco has lined the pockets of EVERY politician involved in pushing this through, this isn’t about making more money on taxation. It’s clearly in no uncertain terms an action taken to wipe out their competition, close down all the local vape shops and try to force those of us who managed to finally break free from Tobacco products to come back to smoking. That day WILL NEVER HAPPEN! Especially now that I know they have been taking extreme measures to limit my options to choose a healthier lifestyle.

    Financing politicians to destroy our health, that is who we have elected. Replacing them is the highest priority and the first step in sending a message, but everyone has a price and big tobacco has plenty of money. So will the next guy be bought off, sadly that is a high probability.
    I really feel for all of the vape shops in my state, this is an extremely raw deal they are getting. While I may have other options online, how long will it be before they disappear one by one as this continues across the country?

    • Jim McDonald

      The issue is that will disappear one by one. Vapers and vendors need to ALL be involved — with time and money — right NOW. People should stop purchasing from businesses that aren’t actively fighting through associations. And customers should not leave a store without being educated. As long as a majority of people leave the work for someone else to handle, we’ll spin our wheels.

  • ManInBlack

    For what it’s worth, North Carolina taxes vapor products in two ways. There’s the normal sales tax and a modest $0.05/ml excise tax on retail juice sales. That means $1.50 per 30ml or $6.00 per 120ml. Comparing this reasonable tax to draconian taxes in other states is grossly unfair.

    North Carolina has a strong shop-supported vape advocacy group the, NC Vaping Council, as well as a PAC, the Right2Vape Political Action Committee. Both can be found on Facebook, and Right2Vape has a website and is actively seeking donations nationwide. NCVC acts locally and at the state level, Right2Vape aims at national-level elections. For further information, look ’em up. I don’t know if the terms of my right to comment here allow me to post links, but there’s always Google and Facebook.

    To not lobby our legislators would have been foolish.

    MIB
    Raleigh, NC

    • Jim McDonald

      I think you can post links. I thought the orgs in NC formed after the tax was passed. While that may be a “reasonable” tax, bear in mind that excise taxes never go down. They always increase.

  • Matt Reynoso

    I too was under the impression that big tobacco was the primary force in all of this, but recently found out that RJ Reynolds has its own line of vape products. Philip Morris is also releasing a product called the IQOS, which is somewhere between real cigarettes and e-cigs.

    I’m not saying big tobacco had nothing at all to do with this, just that I don’t think they were the driving force behind the tax.

    All the same though, this is atrocious and I’ll be damned if I let this happen in California without a fight.

  • Joe

    This really bums me out. I love going to my local vape shop. Awesome people and great products. I bring my stuff in every couple weeks for a check up. I went there today and was told they can’t even touch my mod or even fill it up for me… wtf. They also said they can’t even recommend nicotine levels to people anymore. Aren’t we adults who can make our own decisions? I’m disgusted.

    • Jim McDonald

      The shops are being careful not to do things that would force them to be classified (by the federal deeming regulations) as “tobacco manufacturers.” I hope you’ll continue to go there anyway. They’ll need loyal customers if they’re to have any chance of surviving all this.

  • Paul Anthony

    Should start a class action lawsuit against Tom Wolf and his ilk. The taxes are unconstitutional especially on e-liquids and mods from out of state as they do not own or run a store front here. Any vape shop that sees this should consider it and sue them. I would definitely love to be in on it too as I don’t want to pay the higher taxes on something that is 95% better for you than smoking.

    https://www.quora.com/How-are-state-use-taxes-considered-constitutional