UPDATE: Pennsylvania Vapor Tax Is Worse Than We Thought

The state is also going after vapers, and penalties could include prison

Hands Behind Bars

Five years in prison?

It sounds like a bad joke, but it’s all too real. Pennsylvania vapers could go to prison for buying vapor products online and not paying a 40 percent tax on them. “The penalties for evading the tax include up to a $5,000 fine, or prison time not to exceed five years,” Alex Clark of CASAA told me in an e-mail. You read that right: you could go to jail for buying e-liquid online and not sending a check to the state of Pennsylvania.

It’s even illegal to merely possess products bought in another state. Section 1207-A(a) of the law criminalizes the ownership of any vape device or e-liquid that wasn’t bought from a licensed Pennsylvania seller. So if you buy a mod on a trip to New Jersey or Ohio, merely having it in your possession will make you a criminal after October 1. As bad as the law seemed in our original article, it keeps getting worse.

You thought you found a way to quit smoking? Sorry, pay up or possibly go to prison.

Vapers who buy online are now importers

“The bill defines consumers as “unclassified importers’,” says Clark, who has taken a thorough look at the 257-page budget bill. That means that individuals who purchase any vapor product, including e-liquid, from a vendor that hasn’t already paid the tax would be responsible to pay the state, based on retail price.

In other words, anyone purchasing online or out of state would be responsible for paying 40 percent of the amount spent to the state of Pennsylvania.

Buyers will be required to file reports and make payments monthly — just like vape shops will have to do. So not only will shops be punished with a 40 percent tax on the cost of their merchandise, so will consumers.

Online sellers outside of Pennsylvania may choose to avoid complications and refuse to sell to Pennsylvania residents. And many PA businesses may opt to relocate — or close their operations altogether.

The floor tax clarified

Pennsylvania State Capitol

One of the most alarming aspects of this law is the “floor tax” it requires vendors to pay on existing stock. Not only will they have to pay 40 percent of wholesale cost on products purchased from distributors and manufacturers after the law goes into effect, they will have to pay the same amount on all existing inventory. The common understanding was that the tax would be due immediately.

The effective date of the tax, according to CASAA, is October 1, 2016. The floor tax is assessed on retailers’ onhand stock on that day. However, stores will then have 90 days to make the payment. The three-month grace period may allow some shop owners to find a way to afford it — although many may be unable to. However the tax is collected, the fact is that small businesses will be forced to hand the state cash amounting to 40 percent of the value of all merchandise in their stores, or shut their doors.

Additionally, manufacturers, distributors, and retailers must obtain licenses from the state in order to sell products in Pennsylvania. And retailers must purchase products from licensed distributors or wholesalers.

What can we do now?

Get Involved

It’s hard to imagine a law that directly attacks vapers more brutally than this one. If you’re reading this, you should be telling everyone you know. If you live in Pennsylvania, you should be writing your state legislator, senator and governor. CASAA has just issued a call to action, and their site will automatically direct residents’ messages to the correct legislators.

Tell them what vaping has done for you, and for the other vapers you know. Tell them you’re bitterly disappointed that your state did this, punishing people who have done nothing but find a way to quit smoking.

If you aren’t a CASAA member, please join right now. It’s free to join (though everyone should consider donating too), and every additional member makes the organization more impressive in the eyes of legislators and regulators.

If you’re not from Pennsylvania, explain to the vapers in your area that this can happen where they live too. Pennsylvania is the fifth largest state in the country. Other states will watch this and take cues from the public reaction. If vapers don’t get serious, get active, and fight back, they’ll assume we don’t care. We have to make it clear that we care.

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.