There have been a number of proposals over the past few months calling for regulation in the eCigarette industry. Utah however, is currently the only state in the nation that is planning to actually tax the eCigarette like traditional cigarettes are taxed.
Electronic cigarettes are battery powered nicotine inhaling devices that produce water vapor which gives the sensation of smoking, without the drawbacks of traditional smoking. The popularity of the eCigarette has grown substantially over the past few years. They first became available in the United States around 2006 and since that time, the industry has grown to include millions of consumer customers each year. Experts predict that the industry will more than double its growth in the next year alone, which has caused many to wonder about how these devices can be regulated.
Many companies that produce eCigarettes have begun mass advertising campaigns. The Super Bowl aired an eCig advertisement just this year, showing a man who was enjoying his vaping and the Food and Drug Administration has been working diligently on regulations to better govern the industry. The FDA wants to develop their own regulations for the industry and many states are growing a bit impatient waiting for the results from their latest studies. Utah finally decided to go out on its own and begin their own taxation of the eCig industry in their state.
Republican State Representative Paul Ray believes that eCigarettes should be treated the same as traditional tobacco cigarettes. He feels that they should carry the same tax regulations as traditional cigarettes and that retailers who offer these products should not be selling them as a replacement or alternative to traditional smoking. Utah laws prohibit the sale of eCigarettes to anyone who is younger than 19 and most states have similar laws in place. In general, eCigarettes are not permitted to be sold to minors younger than 18. Because of a loophole in Utah law however, many city and county agencies cannot legally impose a fine on retailers that do sell to minors and state legislators are working to resolve this issue.
If the tax regulation on eCigarettes carries, they will be taxed at the same rate as cigars, pipe tobacco and loose tobacco products, which is 86 percent. The Utah state tax for regular cigarettes is currently $1.70 for a 20 cigarette pack. On average, the cost for 30 milliliters of e-liquid is around $20 so the tax on that would be around $17.20, making it a bit more expensive for consumers to vape although this would still be much less expensive than traditional smoking. Those currently purchasing eCigarettes and their accessories in Utah pay only the regular sales tax and not a tobacco tax but Ray hopes that this will change once the law is passed. If the law does pass, Utah could see an extra $1.6 million every year from the taxes on eCigarettes alone which is certainly an eye-opener for other states who may be considering placing a tax on eCigs themselves.