Anchorage Passes a 55% Tax on Vaping Products

With little fanfare, the Municipality of Anchorage, Alaska, has passed an ordinance taxing vaping products. The tax, which was unanimously passed by the Anchorage Assembly, will take effect Jan. 1, 2021.

The ordinance adds vaping products (including devices and e-liquid) to the municipality’s existing “other tobacco products” tax, which is currently set at 55 percent of wholesale cost. The Assembly amended the law to exclude devices used for cannabis vaping, according to Alaska Public Media. (Recreational cannabis is legal in Alaska.)

Representatives of the usual anti-tobacco (and anti-vaping) groups spoke in favor of the tax. The American Lung Association's Marge Stoneking said that smoking has been declining for decades, but that vaping could reverse that (a claim disproven by actual youth smoking trends).

“Now e-cigarettes are addicting a new generation of youth, threatening all of that progress,” she said. “Significantly increasing taxes on tobacco products results in fewer kids starting to smoke and more adults quitting while at the same time providing revenue to the municipality.”

Anchorage vape shop owner Shaun D’Sylva, who also owns vaping businesses in Washington State, disagreed.

“Imposing this tax on something that is actually helping people get away from combustible cigarettes and actually costing the state and local resources less money seems a little problematic,” D’Sylva told the Assembly members.

In the end, all ten Assembly members present, both Republicans and Democrats, supported the tax after an amendment was introduced to exempt cannabis vaping products. The stated reason by most was to protect children.

The Municipality of Anchorage is a unified city-borough government (boroughs in Alaska are essentially counties) with a population of about 290,000. Anchorage is Alaska’s largest city (and borough), and makes up almost 40 percent of the state’s population.

Several other cities and boroughs in Alaska have vaping taxes. Neighboring Matanuska-Susitna Borough has a virtually identical 55 percent wholesale tax. And Juneau, NW Arctic, and Petersburg Boroughs all have 45 percent wholesale taxes on nicotine-containing products.

Alaska has no statewide tax on vapor products, although the state taxes smokeless tobacco at 75 percent of wholesale. Cigarettes are taxed at $2 a pack.