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December 10, 2021

Nicotine Tax Is Dead (For Now Anyway)

The nicotine tax that passed the House of Representatives as part of the Build Back Better Act has now been dropped from the version of the bill being considered in the Senate. But until the bill actually passes without the tax, it could be added again.

The Wall Street Journal reported Thursday evening that Nevada Senator Catherine Cortez Masto, a Finance Committee member, pushed for the tax to be deleted from the almost $2 trillion legislation. The nicotine tax would have provided about $9 billion in revenue over 10 years—essentially a drop in the bucket of revenue needed to fund the huge spending bill.

“I have been clear from the start of this process that I would not raise taxes on anyone making less than $400,000, and I would not support measures that hurt Nevada’s small businesses, farmers and ranchers, or the more than 30,000 men and women whose jobs are supported by the mining industry,” Sen. Cortez Masto said in a statement.

Senate Finance Chairman Ron Wyden confirmed Thursday that the tax had been dropped from discussions, according to Bloomberg Tax.

There is no federal tax on vaping products, although many states have vape taxes. The tax just dropped from the BBB bill is one of several “tobacco tax equity (or parity)” bills that have been proposed in recent years, supposedly intended to equalize tax rates on all consumer nicotine products.

During the BBB bill’s journey through congressional committees, members of Congress removed and then added back the nicotine tax. It is not beyond the realm of possibility that it could reappear still before the bill received a Senate vote. That’s why CASAA is urging vapers to continue educating lawmakers by participating in the group’s call to action.

Read our previous coverage of this and other “tobacco tax equity” legislation

Smokers created vaping without any help from the tobacco industry or anti-smoking crusaders, and vapers have the right to keep 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 recently joined 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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David Priddy
David Priddy
6 months ago

This is great news Jim, I’m so happy! Let’s hope and pray it stays out now.

John Hastings
John Hastings
6 months ago

This is fantastic news for the one company that can legally sell tobacco vape products! (slow clap)

David Priddy
David Priddy
6 months ago

Jim,

Can you explain the following comment? “The tax being discussed now is one of many “tobacco tax equity (or parity)” bills that have been proposed in recent years, supposedly intended to equalize tax rates on all consumer nicotine products.” Is this a bad thing or is it better than having the nicotine tax in the BBB bill? I’m a bit confused on what this means.

Thanks for answering and explaining.

David

David Priddy
David Priddy
6 months ago
Reply to  Jim McDonald

Thank you, appreciate the explanation.

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