E-Cig Industry Fights Vape Tax That Killed One-Third Of State Vendors In 2016

Steve Birr | Vice Reporter

The vaping industry is fighting off a crippling 40 percent tax on their shops that is responsible for eliminating one-third of electronic cigarette businesses in Pennsylvania.

The Pennsylvania Vape Association organized an opposition rally Monday morning in the state capitol building in demonstration against the onerous tax and to petition lawmakers to lower it to a more financially reasonable figure. Close to one hundred e-cigarette shops have closed since the tax took effect Oct. 1 after securing passage in the summer. The tax applies retroactively to all vape businesses in the state, which is proving fatal for many, reports Pocono Record.

The protesters want to draw attention to the havoc the tax is wreaking on their industry. Business owners continue to be forced into bankruptcy and many are now collecting unemployment.

“An estimated 100 vapor businesses in 2016 were closed, which is approximately one-third of them,” John Dietz, the vice president of the Pennsylvania Vape Association, told Pocono Record. “It’s an alarming reduction in the Pennsylvania workforce, many square footage of retail space lay vacant, and it’s all due to the tax. Many owners and employees have filed bankruptcy and for unemployment benefits and our organization has been in contact with numerous owners who plan to close their doors in 2017.”

Dietz says there are plans to work with lawmakers in the legislature this year to amend the tax, possibly reducing the financial burden to five cents per milliliter of liquid nicotine. The Pennsylvania Vape Association will also push to have e-cigarettes removed from the state’s definition of a tobacco product, but it is unclear how much traction these policy goals will gain in the state legislature.

E-cigarette manufacturers and vendors faced a brutal year of new rules and regulations from the federal government and localities throughout many states. Health officials are pushing lawmakers to amend the laws governing traditional cigarettes to all vaping devices, despite evidence e-cigarettes eliminate 95 percent of the dangers associated with smoking.

Proponents of vaping argue critics are ignoring the positive impact the devices are having on current smokers.

“Our industry is one born out of innovation,” Jan Verleur, CEO of VMR and co-founder of V2, told The Daily Caller News Foundation. “You would not have seen an industry go from nothing to in excess of $5 billion domestically in the flash of an eye if we were not solving some problem.”

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