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vaping taxes
June 10, 2024
17 min to read

Vaping Taxes in the United States and Around the World

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Jim McDonald

As vaping grows in popularity, it becomes a natural target for governments in need of tax revenue. Because vapor products are usually bought by smokers and ex-smokers, tax authorities correctly assume that money spent on e-cigarettes is money not being spent on traditional tobacco products. Governments have depended upon cigarettes and other tobacco products as an income source for decades.

Whether vaping devices and e-liquid deserve to be taxed like tobacco is almost beside the point. Governments see them pushing smokers away from tobacco, and they understand that the lost revenue must be made up. Since vaping looks like smoking, and there is substantial public health opposition to vaping, it becomes an attractive target for politicians, especially because they can justify the tax with a variety of questionable health claims.

Vape taxes are now being proposed and passed regularly in the United States and elsewhere. Taxes are usually opposed by advocates for tobacco harm reduction, representatives of vaping industry trade groups, and vaping consumers, and they’re supported by tobacco control organizations, doctors, and the lung, heart and cancer associations.

Why do governments tax vaping products?

Taxes on specific products—usually called excise taxes—are applied for various reasons: to raise money for the taxing authority, to change the behavior of those being taxed, and to offset environmental, medical, and infrastructure costs created by the use of products. Examples include taxing alcohol to dissuade excessive drinking, and taxing gasoline to pay for road maintenance.

Tobacco products have long been a target for excise taxes. Because the harms of smoking impose costs on the whole society (medical care for smokers), proponents of tobacco taxes say that tobacco consumers should foot the bill. Sometimes excise taxes on alcohol or tobacco are called sin taxes, because they also punish the behavior of drinkers and smokers—and in theory help convince the sinners to quit their wicked ways.

But because the government becomes dependent on the tax revenue, a decline in the smoking rate creates a financial shortfall that must be made up with some other source of income, or else the government must reduce spending. For most governments, the cigarette tax is a significant revenue source, and the excise is charged in addition to the standard sales tax assessed on most consumer products.

How do vape taxes work?

Most U.S. consumers pay a state (and sometimes also local) sales tax on the vaping products they purchase, so governments already benefit from vape sales even before excise taxes are added. Sales taxes are usually assessed as a percentage of the retail price of the products being purchased. In many other countries, consumers pay a “value added tax” (VAT) that works the same way as a sales tax. As for excise taxes, they come in a couple of basic varieties.

One of the most common forms of vape tax is assessed at retail. Some taxes cover all vaping products (like New York State’s 20% tax), and others target e-liquid only. Sometimes the tax is only charged on sales of nicotine-containing e-liquid.

Wholesale taxes are ostensibly charged to the wholesaler (usually a distributor) selling products to a business that will resell them at retail sites in the state. The tax is usually a percentage of the wholesale price (cost). It may be assessed on all vaping products or just nicotine-containing ones. Although wholesale taxes are not collected from the end user of the product, the cost of the tax is usually factored into the retail price of the product.

Vaping taxes in the United States

There is no federal tax on vaping products in the U.S. Bills have been introduced in Congress to tax vapes, but none has so far gained enough support to pass.

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Vape taxes in U.S. states, territories and municipalities

Before 2019, nine states and the District of Columbia taxed vaping products. That number more than doubled in the first seven months of 2019, when the moral panic over JUUL and teenage vaping pushed legislators to do something to "stop the epidemic."

 

As of early 2024, 31 U.S. states have a tax on vapor products, along with some cities and counties, and the District of Columbia and Puerto Rico.

Alaska

Alaska doesn’t have a state tax, but some municipalities have their own vape taxes:

  • Juneau Borough, NW Arctic Borough and Petersburg Borough have identical 45% wholesale taxes on nicotine-containing products
  • Anchorage Borough has a 55% wholesale tax
  • Matanuska-Susitna Borough has a 55% wholesale tax

California

The California wholesale tax on “other tobacco products” is set yearly by the state Board of Equalization. It mirrors the percentage of all taxes assessed on cigarettes. Originally this amounted to 27% of the wholesale cost, but after Proposition 56 increased the tax on cigarettes from $0.87 to $2.87 a pack, the vape tax increased drastically. For the year beginning July 1, 2023, the tax is 56.32% of the wholesale cost for all nicotine-containing products.

On July 1, 2022, California added a retail tax to the existing wholesale tax—12.5% on all nicotine-containing vaping products, including those bought online from retailers in other states

Colorado

The current tax in Colorado is 56% of manufacturer’s list price on all nicotine-containing vapor products (including bottled e-liquid). The tax, approved by Colorado voters in 2020, launched in 2021 at 30%, escalated to 35% in 2022, then to 50% in 2023. It rose to 56% in 2024, and will increase to 62% in 2027. The tax is 50% lower for products given a Modified Risk (MRTP) designation by the FDA (but no manufacturer of a liquid-based vaping product has even applied for an MRTP authorization)

Connecticut

The state has a two-tiered tax on nicotine-containing vape products: $0.40 per milliliter on e-liquid in closed-system products (pods, cartridges, disposables), and 10% wholesale on open-system products, including bottled e-liquid and devices

Delaware

A tax of $0.05 per milliliter on nicotine-containing e-liquid

District of Columbia

The nation’s capital classifies vapes as “other tobacco products,” and assesses a tax on the wholesale price based on a rate that is indexed to the wholesale price of cigarettes. The tax is currently set at 91% of wholesale cost for devices and nicotine-containing e-liquid

Georgia

A tax of $0.05 per milliliter on e-liquid in closed-system products (pods, cartridges, disposables), and a 7% wholesale tax on open-system devices and bottled e-liquid. The taxes apply to products with and without nicotine

Hawaii

A 70% wholesale tax on all vaping products

Illinois

A 15% wholesale tax on all vaping products. The tax applies to products with and without nicotine. In addition to the statewide tax, both Cook County and the city of Chicago (which is in Cook County) have their own vape taxes:

  • Chicago assesses a $1.50 per unit tax on any vaping product containing nicotine (bottled e-liquid or prefilled devices) and a separate $1.20 per milliliter tax on the liquid itself. (Chicago vapers also must pay the $0.20 per mL Cook County tax)
  • Cook County taxes products containing nicotine at a rate of $0.20 per milliliter

Indiana

A 15% tax on the retail gross on all vaping product sales, with or without nicotine; and a 15% wholesale tax on closed-system products like prefilled pod vapes (and refill pods and cartridges) and disposables

Kansas

A tax of $0.05 per milliliter on all e-liquid. The tax applies to products with and without nicotine

Kentucky

A 15% wholesale tax on bottled e-liquid and open-system devices, and a $1.50 per unit tax on prefilled pods and cartridges. The taxes apply to products with and without nicotine

Louisiana

A tax of $0.15 per milliliter on nicotine-containing e-liquid

Maine

A 43% wholesale tax on all vaping products. The tax applies to products with and without nicotine

Maryland

A 12% retail tax on open-system vaping products and bottled e-liquid (rising to 20% on July 1, 2024), and a 60% tax on nicotine-containing e-liquid in containers with a capacity under 5 milliliters (pods, cartridges, disposables). In addition to the state tax:

  • Montgomery County imposes a 30% wholesale tax on all vaping products, including devices sold without liquid

Massachusetts

A 75% wholesale tax on all vaping products. The tax applies to products with and without nicotine. The law requires consumers to produce proof that their vaping products have been taxed, or they are subject to seizure and a fine of $5,000 for the first offense, and $25,000 for additional offenses

Minnesota

In 2011 Minnesota became the first state to impose a tax on e-cigarettes. The tax was originally 70% of wholesale cost, but was increased in 2013 to 95% of wholesale on finished products that contain nicotine (cigalikes, pod vapes, bottled e-liquid) and are transported from out of state. However, for bottled e-liquid produced in Minnesota, only the nicotine itself is taxed

Nebraska

Nebraska has a two-tiered tax, depending on the size of the e-liquid container (or prefilled vape). For products containing less than 3 milliliters of e-liquid, the tax is $0.05/mL. For products containing 3 mL or more, there is a 10% wholesale tax. The tax applies only to products that contain nicotine. In addition to the state tax:

  • Omaha includes vaping products in the city’s 3% tobacco tax

Nevada

A 30% wholesale tax on all vapor products. The tax applies to products with and without nicotine

New Hampshire

An 8% wholesale tax on open-system vaping products (including nicotine-containing e-liquid), and $0.30 per milliliter on closed-system products (pods, cartridges, disposables) 

New Jersey

New Jersey taxes nicotine-containing e-liquid at $0.10 per milliliter in pod- and cartridge-based products, 10% of the retail price for bottled e-liquid, and 30% wholesale for devices

New Mexico

New Mexico has a two-tiered e-liquid tax: 12.5% wholesale on bottled e-liquid, and $0.50 on each pod, cartridge, or cigalike with a capacity under 5 milliliters. The taxes apply to products with and without nicotine

New York

A 20% retail tax on all vapor products. The tax applies to products with and without nicotine

North Carolina

A tax of $0.05 per milliliter on nicotine-containing e-liquid

Ohio

A tax of $0.10 per milliliter on nicotine-containing e-liquid

Oregon

A 65% wholesale tax on all non-cannabis "inhalant delivery systems,", including hardware and "components" (which includes e-liquid). The tax also includes heated tobacco products (HTPs) like IQOS, but exempts all vaping products sold in licensed cannabis dispensaries. The tax applies to products with and without nicotine

Pennsylvania

A 40% wholesale tax on e-liquid and devices that are sold with e-liquid included. The tax applies to products with and without nicotine

Puerto Rico

A tax of $0.05 per milliliter on e-liquid, and a $3.00 per unit tax on e-cigarettes

Utah

A 56% wholesale tax on e-liquid and prefilled devices. The tax applies to products with and without nicotine

Vermont

A 92% wholesale tax on e-liquid and devices. The tax applies to products with and without nicotine

Virginia

A tax of $0.066 per milliliter on nicotine-containing e-liquid. (The tax will increase to $0.11/mL on July 1, 2024)

Washington State

Washington has a two-tiered tax: $0.27 per milliliter on e-juice in pods and cartridges smaller than 5 mL in size, and $0.09 per milliliter on liquid in containers larger than 5 mL. The taxes apply to products with and without nicotine

West Virginia

A tax of $0.075 per milliliter on all e-liquid. The tax applies to products with and without nicotine

Wisconsin

A tax of $0.05 per milliliter on e-liquid in closed-system products (pods, cartridges, disposables) only. The tax applies to products with and without nicotine

Wyoming

A 15% wholesale tax on all vaping devices and nicotine-containing e-liquid

Vape taxes around the world

As in the United States, legislators around the world don’t really understand vapor products. The new products seem to lawmakers like a threat to cigarette tax revenue (which they truly are), so their impulse is often to impose high taxes and hope for the best.

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International vape taxes

Conversions to U.S. currency are estimates. No conversion is done for the European Union euro (€), which closely mirrors the U.S. dollar in value.

Albania

A tax of 10 leke ($0.091 US) per milliliter on nicotine-containing e-liquid

Azerbaijan

A tax of 20 manats ($11.60 US) per liter (about $0.01 per milliliter) on all e-liquid

Bahrain

The tax is 100% of the pre-tax price on nicotine-containing e-liquid. That supposedly equates to 50% of the retail price. The purpose of the tax is unclear, since vapes are supposedly banned in the country

Belgium

A tax of €0.15 per milliliter on all e-liquid

Canada

A federal tax of 1 Canadian dollar (about $0.75 US) per 2 milliliters (or fraction thereof) on the first 10 mL in any bottle, pod, or cartridge, then $1 per additional 10 mL (or fraction thereof). The tax applies to all vaping products, with or without nicotine. Individual provinces may have additional taxes of their own

China (People's Republic of China)

China has a two-pronged wholesale tax, assessing a 36% rate on the production or import of e-cigarettes, and a separate 11% tax on wholesale domestic distribution 

Costa Rica

A 20% wholesale tax on all vaping products and accessories

Croatia

Although Croatia has an e-liquid tax on the books, it is currently set at zero

Cyprus

A tax of €0.12 per milliliter on all e-liquid

Denmark

A tax of DKK 2.00 ($0.30 US) per milliliter on all e-liquid

Ecuador

A 150% wholesale tax on "other tobacco products" includes vaping products

Estonia

In 2018, Estonia imposed a €0.20 per milliliter excise duty on all e-liquid. In December 2020, the Riigikogu (parliament) suspended the tax—effective from April 1, 2021 and lasting until Dec. 31, 2022—with the goal of ending the large black market that has grown in the wake of the excessive tax (and a flavor ban). According to consumer nicotine group NNA Smoke Free Estonia, "self-mixed, cross-border and smuggled e-liquids account for 62-80% of the entire Estonian e-liquids market"

Finland

A tax of €0.30 per milliliter on all e-liquid

Georgia

A tax of 0.2 Georgian Lari ($0.066 US) per milliliter on all e-liquid

Germany

A tax of €0.20 per milliliter on all e-liquid. The tax took effect in 2022 at €0.16/mL, and increased Jan. 1, 2024 to its current level. It will rise again on Jan. 1, 2025 to €0.26/mL, and then again on Jan. 1, 2026 to €0.32/mL

Greece

A tax of €0.10 per milliliter on all e-liquid

Hungary

A tax of HUF 20 ($0.07 US) per milliliter on all e-liquid

Indonesia

The Indonesian excise tax is 57%, and seems to only be meant for nicotine-containing e-liquid (“extracts and essences of tobacco” is the wording). In 2024, Indonesia has added an additional tax on vaping products, set at 10% of the excise tax

Israel

On March 3, 2024, the Israeli Tax Authority increased the e-liquid tax to “not less than” 10.04 NIS (New Israeli Shekels) per milliliter (equivalent to $2.76US per mL—nearly $83 for a 30 mL bottle). The authority also announced that the tax will increase in July to not less than 18.60 NIS/mL. The tax applies to e-liquid with or without nicotine, and includes e-liquid contained in bottles, pods, and disposable vapes

Italy

As of 2023, tax rates were €0.14 per milliliter for nicotine-containing e-liquid, and €0.09 for zero-nicotine products 

Jordan

Devices and nicotine-containing e-liquid are taxed at a rate of 200% of the CIF (cost, insurance and freight) value

Kazakhstan

Although Kazakhstan has an e-liquid tax on the books, it is currently set at zero

Kenya

Kenya updated its excise duty rate on vaping products in 2022. The current rates are 40% for devices, and 70 Kenyan shillings ($0.57 US) per milliliter on e-liquid

Kyrgyzstan

A tax of 1 Kyrgyzstani Som ($0.014 US) per milliliter on nicotine-containing e-liquid

Latvia

Latvia updated its excise tax rates in October 2023, simplifying and increasing vaping and tobacco taxes. From March 1 to Dec. 31, 2024, e-liquid will be taxed at a rate of €0.24 per milliliter. From Jan. 1 to Dec. 31, 2025, the rate will increase to €0.29/mL. Beginning Jan. 1, 2026, the rate will go up to €0.35/mL

Lithuania

A tax of €0.12 per milliliter on all e-liquid

Malaysia

A 10% tax on vaping devices and a 40 sen ($0.10 US) per milliliter tax on e-liquid. However, the government announced Oct. 29, 2021 that it would begin taxing nicotine-containing liquid, which will require a change in the law that prohibits sales of nicotine-containing products except by pharmacies. (In early 2022, this tax was postponed)

Maldives

Nicotine-containing e-liquid is taxed at a rate of 200% of the CIF (cost, insurance and freight) value

Montenegro

A tax of €0.90 per milliliter on all e-liquid

North Macedonia

A tax of 0.2 Macedonian Denar ($0.0036 US) per milliliter on e-liquid. The law allows automatic increases in the tax rate July 1 of each year from 2020 to 2023

Norway

A tax of 4.5 Norwegian Krone ($0.51 US) per milliliter on all e-liquid

Paraguay

The law classifies e-cigarettes as tobacco products, and taxes them at 16% (probably based on wholesale price). However, most sellers don't register the products as tobacco, but import them under other classifications

Philippines

As of 2023, the country imposed a tax of 52 Philippine pesos (PHP) per milliliter for nicotine salt-based e-liquids, and 60 PHP per mL for freebase nicotine e-liquids, according to the Philippine News Agency. From 2024 onward, the tax is scheduled to increase by 5% each year

Poland

A tax of 0.55 Polish Zloty (PLN) ($0.14 US) per milliliter on all e-liquid

Portugal

A tax of  €0.323 per milliliter on nicotine-containing e-liquid

Romania

A tax of 0.52 Romania Leu ($0.12 US) per milliliter on nicotine-containing e-liquid. The tax can be adjusted annually based on consumer price increases

Russia

Disposable products are taxed at 50 rubles ($0.81 US) per unit. Nicotine-containing e-liquid is taxed at 13 rubles per milliliter

Saudi Arabia

The tax is 100% of the pre-tax price on e-liquid and devices. That supposedly equates to 50% of the retail price

Serbia

A tax of 4.32 Serbian Dinar ($0.044 US) per milliliter on all e-liquid

Slovenia

A tax of €0.18 per milliliter on nicotine-containing e-liquid

South Africa

A tax of 2.90 Rand (about $0.15 U.S.) per milliliter on all e-liquid

South Korea (Republic of Korea)

The first country to impose a national vape tax was the Republic of Korea (usually called South Korea in the West)—in 2011, the same year Minnesota began taxing e-liquid. Currently the country has four separate taxes on e-liquid, each earmarked for a specific spending purpose (the National Health Promotion Fund is one). The various South Korean e-liquid taxes add up to a whopping 1,799 won ($1.60 US) per milliliter, and there is also a waste tax on cartridges and pods of 24.2 won ($0.02 US) per 20 cartridges. However, the tax apparently applies only to tobacco-derived nicotine products, leaving e-liquid made with synthetic nicotine untaxed

Sweden

A tax of 2 Swedish krona (SEK) per milliliter ($0.22 US) on nicotine-containing e-liquid up to 15 mg/mL. E-liquid containing 15-20 mg/mL is taxed at 4 SEK/mL

Togo

Taxed up to 45% (believed to be based on the wholesale price)

Ukraine

A tax of 3 Ukrainian hryvnia (UAH) ($0.11 US) per milliliter on all e-liquid

United Arab Emirates (UAE)

The tax is 100% of the pre-tax price on e-liquid and devices. That supposedly equates to 50% of the retail price

Uzbekistan

Global Tobacco Control says an excise tax of 500 Uzbekistani so'm per milliliter ($0.05 US) was introduced on e-liquid in 2020, but we could find no confirmation or additional details

Sources

Vaping360 appreciates any updates or corrections to the posted tax rates. Please comment below, and provide supporting information (newspaper articles, links to government websites, etc.) if it's available.

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Jim McDonald

Vaping since: 12 years

Favorite products:

Favorite flavors: RY4-style tobaccos, fruits

Expertise in: Political and legal challenges, tobacco control haters, moral panics

Jim McDonald

Smokers created vaping without help from the tobacco industry or anti-smoking crusaders, and I believe vapers have the right to continue innovating to help themselves. My goal is to provide clear, honest information about the challenges vaping faces from lawmakers, regulators, and brokers of disinformation. I’m a member of the CASAA board, but my opinions aren’t necessarily CASAA’s, and vice versa. You can find me on Twitter @whycherrywhy

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