DC Considers Taxing E-Cig Stores Out of Business

Matthew Bandyk Contributor
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WASHINGTON — Sean Robinson, owner of the District Vape electronic cigarette store in Washington, D.C., chuckles as he talks about his “cigarette graveyard”: a shelf near the front of the store holding a small mountain of Newports, Camels and other old cigarette packs discarded by customers who quit smoking after buying vaping gear.

The shelf is a promotion — customers who publicly give up their cigarettes get $5 off a store purchase. But Robinson said it’s also meant to convey a personal message. He and his five employees at District Vape are all ex-smokers who turned to e-cigarettes to help them quit.

Those employees also might be soon out of their jobs due to a new tax being contemplated by the DC city council. The tax could treat e-cigarettes like tobacco-burning cigarettes, despite the fact that vaping products contain no actual tobacco — just a nicotine-infused “juice” that is turned into water vapor instead of smoke.

While a debate still burns in the public health community about just how much e-cigarettes help smokers kick the habit, the DC city council is poised to end the argument early. On June 30, the council is set to vote on a budget amendment that would slap a 70 percent excise tax on e-cigarettes and related vaping products, a move that will likely drive District Vape and several other small independent stores in the city out of business.

Customer tries different e-cigarette flavors at the Henley Vaporium in New York

A customer tries different e-cigarette flavors at the Henley Vaporium in New York, June 23, 2015. (REUTERS/Lucas Jackson)

The DC bill is an example of many attempts around the country, some already successful, to tax e-cigarettes like tobacco cigarettes. States like Utah and Virginia have been considering new vaping taxes. Minnesota already considers e-cigarettes to be tobacco products for the purpose of taxation.

DC Mayor Muriel Bowser proposed the amendment to try to fill revenue holes in the city’s 2016 budget. The tax would raise $400,000, the DC Fiscal Policy Institute has estimated. But Robinson insists that the city will get none of that revenue from stores like his because they will just have to close their doors.

A salesman displays electronic cigarettes during the first international fair of electronic cigarette and vapology "Vapexpo" in Bordeaux

A salesman displays electronic cigarettes during the first international fair of electronic cigarette and vapology “Vapexpo” in Bordeaux, southwestern France, March 13, 2014. (REUTERS/Regis Duvignau)

The tax change, the Vapor Product Amendment Act, would classify e-cigarettes and associated vaporized nicotine delivery devices as “other tobacco products” and subject them to the same 70 percent wholesale tax used for normal cigarettes.

The policy would effectively cut off supplies for independent vaping shops. A vendor of a $100 e-cigarette device, for example, would have to pay an extra $70 to the city in order to sell to District Vape.

“No vendor would want to sell me anything” if the council approves the tax change, Robinson told The Daily Caller. Similar stores in the city like DC Vape Joint already often sometimes have to partner up with him to buy supplies in amounts large enough to meet the minimum quantity for vendor orders that one store could not afford alone, he said.

Bottles of flavor packets for e-cigarettes stand displayed in a tobacco shop in New York

Bottles of flavor packets for e-cigarettes stand displayed in a tobacco shop in New York, June 23, 2015. (REUTERS/Lucas Jackson)

The tax would also end a dream that started just one year and three months ago, when Robinson, now 48, tried e-cigarettes for the first time. He had been smoking since 16 and had been trying to quit for years, and he says he has not touched cigarettes since he started vaping.

Upon opening in December of last year, the store became part of an ongoing commercial revitalization of the H Street NE business corridor where District Vape is located. H Street was a big shopping hub before falling into decline following the 1968 riots, but in just the past few years it has reasserted itself as one of the city’s most vibrant areas with quirky new bars, restaurants and retail.

Robinson’s own father was a manager at a men’s wear store on H Street decades ago. “When I told him I wanted to put a store on H Street, he thought I was crazy,” Robinson said of his father.

No one needs to go to a specialty store to buy e-cigarettes. Any 7-Eleven stocks e-cigarette brands started by big tobacco companies, such as Vuse from R.J. Reynolds. But stores like District Vape attract a clientele that wants a more personalized product that provides distinctive tastes that some find makes vaping more appealing — and smoking less appealing. Vuse comes in flavors like tobacco and menthol.

District Vape’s shelves are full of vials of nicotine juice with homemade stickers and colorful names like “Grape Ape,” “Cereal Killer” or names based on local celebrities like go-go legend Chuck Brown. The store sells boutique devices with more sophistication than big brands, like the ability to adjust air flow to get a more custom vaping experience.

File picture shows an attendee adding vape juice to his electronic cigarette at the Vape Summit III in Las Vegas, Nevada

An attendee adds vape juice to his electronic cigarette at the Vape Summit III in Las Vegas, Nevada, in this May 2, 2015 file photo. (REUTERS/David Becker/Files)

The uniqueness of the store’s product also makes the budget amendment much more potentially damaging to this business model. The mass-manufactured products distributed by Big Tobacco can afford to pay an excise tax, but District Vape stocks juices and e-cigarette devices made by small entrepreneurs, sometimes local to DC or Maryland.

Much of the store’s product comes from “people making juice in their garage,” one District Vape manager says.

There is still much disagreement about the benefit of e-cigarettes.

“There haven’t been any scientific studies that prove e-cigs actually help people to quit smoking,” according to, associated with the National Cancer Institute. “There is also concern that using e-cigs may lead kids to start smoking regular cigarettes.”

But there is evidence that e-cigarettes can at least help people smoke less, if not quit entirely. A 2014 article in the Oxford Journals’ Journal of Public Health said that some studies found an up to 80% reduction in the number of cigarettes per day among e-cigarette users.

Vaping has become not just a less harmful alternative to smoking but a passion and hobby in its own right. Descriptions on the store’s shelves filled with juice vials read like they were written by a wine taster (the juice flavor Gamma has tastes of “guava and mango,” while Huggy Lowdown has a finish of “chocolate and hazel nut”).

The many niche markets that developed in the e-cigarette world in recent years are reflected in geeky online communities where vaping aficionados trade information about new juice flavors or how to modify devices to make them more tailored to the individual user.

Why is a brick-and-mortar store needed when so many vaping products can be bought online?

“In my store, you can taste, feel, use every product before you buy it,” Robinson told TheDC. “We charge more money, but it’s worth it because you can get a tangible feel of what you can use to help you quit smoking.”