When one thinks California, one thinks expensive. The cost of living has been out of control in California for years, and many businesses have relocated out of state to avoid high taxes and regulations. Despite this, California is seen as the birthplace of vaping, and many vape stores continue to operate in California despite the looming threat of more laws and regulations. The latest hurdle is a 12.5%% excise tax to the retail cost that will add to already-high vaping taxes in the state.
Why This Could Solidify Gavin Newsom’s Mandate
Recently, California residents voted to keep Gavin Newsom as governor despite Republican efforts to force him out of office. Newsom’s anti-vaping stances in the past two years have drawn criticism from the vaping industry. His plan to ban flavored vapes was pushed onto the voters in 2022, which also happens to be an election year for Newsom himself. In addition to the gubernatorial election, the entire California State Assembly, some California State Senate seats, California Attorney General, one United States Senate seat, and all House of Representatives seats are also being contested in California.
Despite numerous challenges such as the COVID-19 pandemic and questions over Newsom’s leadership during the COVID-19 pandemic, Newsom is seeking a second term as governor. This may have consequences for the vaping industry as legislation to ban flavors and/or increase taxes on vaping products is on the horizon. However, the recent recall election is evidence that Newsom could entrench himself on several key issues, given his margin of victory in the recall election.
Vape products cannot be sold in the city of San Francisco, which is already an obstacle to vape shops operating in the state of California. The 12.5% excise tax for retail products is set to benefit state funds specifically for healthcare, and will take effect on July 1, 2022. Vaping360’s Jim McDonald noticed that the wholesale tax is recalculated each year by California’s Board of Equalization, which is currently 63.49% of the wholesale cost. This will make doing business in California more expensive and more confusing given that the Board of Equalization’s formula mirrors the total of all taxes on cigarettes, and this is subject to change.
What This Means For Your Business
The added taxes to vaping products could force you to raise prices for your customers, and that is the last thing we would want you to do. While you can always take action and advocate for your customers, it is important that you also diversify your product offerings so you can continue to receive revenue from other sources. The eJuices.co team suggests that your shop carry CBD products, which you can buy from our friends over at CBD.co.
If you have any questions, comments, or concerns, please contact your eJuices.co account manager or sales representative. We’re looking forward to speaking with you and helping your business succeed.