Change in the Taxation of Vapor Products
February 3, 2017 09:55 AM to All Senate Members
Circulated By
Senator Camera Bartolotta
R Senate District 46
Memo
In our effort to enact a balanced budget for FY 2016-17, the General Assembly approved a 40 percent wholesale tax on e-cigarettes (also known as vapor products). Unfortunately, this tax has had a devastating impact on the vapor products’ industry and many hard-working Pennsylvanians. To date, over 100 small-business, bricks and mortar vapor shops have closed their doors and many more will likely follow suit. Consequently, several hundred individuals have lost good-paying jobs, and the consumers of these products have seen prices increase and availability decline.
Due to this industry impact, it is highly unlikely that the Commonwealth will collect anywhere near the projected amount of revenues from the 40 percent wholesale tax in the current fiscal year ($13.3 million). The Commonwealth will also lose additional revenues from the collection of the sales tax on these products as well as income tax from industry employees. Unless a legislative fix is made, this industry will continue to shrink and the result will be an actual net loss of revenues to the Commonwealth.
Evidence supports the claim that vapor products are a reduced-harm alternative to smoking combustible cigarettes. In 2015, Public Health England issued a report which concluded that e-cigarettes are as much as 95 percent safer than smoking cigarettes. Just last year, the Royal College of Physicians, one of the world's leading medical associations, released a historic report that, among other things, found e-cigarettes to be effective when used by smokers as an aid to quitting smoking.
For these reasons, I am introducing legislation that will eliminate the 40 percent wholesale tax and replace it with a 5-cents per milliliter retail tax on e-liquid. Similar to levies imposed on these products in other states, this change in taxation will help protect the remaining small business, bricks and mortar vapor shops still in existence, generate predictable and sustainable revenue for the Commonwealth, and continue to make these reduced harm products available to all Pennsylvanians at affordable prices.
Please join me in co-sponsoring this legislation.
Due to this industry impact, it is highly unlikely that the Commonwealth will collect anywhere near the projected amount of revenues from the 40 percent wholesale tax in the current fiscal year ($13.3 million). The Commonwealth will also lose additional revenues from the collection of the sales tax on these products as well as income tax from industry employees. Unless a legislative fix is made, this industry will continue to shrink and the result will be an actual net loss of revenues to the Commonwealth.
Evidence supports the claim that vapor products are a reduced-harm alternative to smoking combustible cigarettes. In 2015, Public Health England issued a report which concluded that e-cigarettes are as much as 95 percent safer than smoking cigarettes. Just last year, the Royal College of Physicians, one of the world's leading medical associations, released a historic report that, among other things, found e-cigarettes to be effective when used by smokers as an aid to quitting smoking.
For these reasons, I am introducing legislation that will eliminate the 40 percent wholesale tax and replace it with a 5-cents per milliliter retail tax on e-liquid. Similar to levies imposed on these products in other states, this change in taxation will help protect the remaining small business, bricks and mortar vapor shops still in existence, generate predictable and sustainable revenue for the Commonwealth, and continue to make these reduced harm products available to all Pennsylvanians at affordable prices.
Please join me in co-sponsoring this legislation.
Legislation
Document - Introduced as SB 508
Last updated on February 3, 2017 09:57 AM
Change in the Taxation of Vapor Products
February 3, 2017 09:55 AM to All Senate Members
Circulated By
BARTOLOTTA
Memo
In our effort to enact a balanced budget for FY 2016-17, the General Assembly approved a 40 percent wholesale tax on e-cigarettes (also known as vapor products). Unfortunately, this tax has had a devastating impact on the vapor products’ industry and many hard-working Pennsylvanians. To date, over 100 small-business, bricks and mortar vapor shops have closed their doors and many more will likely follow suit. Consequently, several hundred individuals have lost good-paying jobs, and the consumers of these products have seen prices increase and availability decline.
Due to this industry impact, it is highly unlikely that the Commonwealth will collect anywhere near the projected amount of revenues from the 40 percent wholesale tax in the current fiscal year ($13.3 million). The Commonwealth will also lose additional revenues from the collection of the sales tax on these products as well as income tax from industry employees. Unless a legislative fix is made, this industry will continue to shrink and the result will be an actual net loss of revenues to the Commonwealth.
Evidence supports the claim that vapor products are a reduced-harm alternative to smoking combustible cigarettes. In 2015, Public Health England issued a report which concluded that e-cigarettes are as much as 95 percent safer than smoking cigarettes. Just last year, the Royal College of Physicians, one of the world's leading medical associations, released a historic report that, among other things, found e-cigarettes to be effective when used by smokers as an aid to quitting smoking.
For these reasons, I am introducing legislation that will eliminate the 40 percent wholesale tax and replace it with a 5-cents per milliliter retail tax on e-liquid. Similar to levies imposed on these products in other states, this change in taxation will help protect the remaining small business, bricks and mortar vapor shops still in existence, generate predictable and sustainable revenue for the Commonwealth, and continue to make these reduced harm products available to all Pennsylvanians at affordable prices.
Please join me in co-sponsoring this legislation.
Due to this industry impact, it is highly unlikely that the Commonwealth will collect anywhere near the projected amount of revenues from the 40 percent wholesale tax in the current fiscal year ($13.3 million). The Commonwealth will also lose additional revenues from the collection of the sales tax on these products as well as income tax from industry employees. Unless a legislative fix is made, this industry will continue to shrink and the result will be an actual net loss of revenues to the Commonwealth.
Evidence supports the claim that vapor products are a reduced-harm alternative to smoking combustible cigarettes. In 2015, Public Health England issued a report which concluded that e-cigarettes are as much as 95 percent safer than smoking cigarettes. Just last year, the Royal College of Physicians, one of the world's leading medical associations, released a historic report that, among other things, found e-cigarettes to be effective when used by smokers as an aid to quitting smoking.
For these reasons, I am introducing legislation that will eliminate the 40 percent wholesale tax and replace it with a 5-cents per milliliter retail tax on e-liquid. Similar to levies imposed on these products in other states, this change in taxation will help protect the remaining small business, bricks and mortar vapor shops still in existence, generate predictable and sustainable revenue for the Commonwealth, and continue to make these reduced harm products available to all Pennsylvanians at affordable prices.
Please join me in co-sponsoring this legislation.
Document
Introduced as SB 508
Last Updated
February 3, 2017 09:57 AM
Generated 03/22/2025 10:32 PM