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State of Vape: PACT Act and Taxes: Who Pays?

April 22, 2021

State of Vape: PACT Act and Taxes: Who Pays?

Albert Einstein, one of the most intelligent people in human history, said, "The hardest thing in the world to understand is the income tax." While Einstein’s specialty wasn’t taxes, he did have insight into how complicated taxes would become. In this edition of State of Vape, we take a look at taxes, and more importantly, answer the question as to who pays for these taxes.


Understanding Vape Taxes


For more information on the PACT Act, you can check out ourPACT Act page. Some states have taken on different taxation methods when it comes to vape: some charge by the wholesale price, others by the milliliter, and others use a combination of tax schemes to charge the taxes on vaping products. The taxation is so complex that even shop owners and compliance experts in the vaping industry are still trying to understand them. You can always contact your eJuices.co account manager or sales representative if you need any further guidance on how these taxes will affect how you do business.


You can find a comprehensive list of how states are charging taxes for vaping productshere. Currently, Washington, New Mexico, Georgia, Kentucky, New Jersey, Connecticut, and New Hampshire use multiple methods of taxation. It may be possible that other states may start introducing taxes on vaping products as a method of raising revenue. The eJuices.co team will keep you posted.


Who Pays?


The major question is: who is ultimately responsible for the cost? Manufacturers, shops, or vapers themselves? What we do know is that just like other heavily regulated industries such as firearms and alcohol, the price of vape products will go up across the board. This cost will unfortunately be passed to customers, which is the last thing any business wants to do. We discussed theeconomic effects of vaping in a previous State of Vape. The Tax Foundation’s Janelle Cammenga suggested that taxation by volume was the simplest method. She said, “It requires neither valuation nor expensive tax administration.”


While the additional taxes may strike a compromise between allowing vapers to access their favorite vaping products (albeit at a higher price and barrier to entry) and the government wanting to keep vaping products out of the hands of minors, taxes may be so high that the difference between a pack of cigarettes and a bottle of eJuice may be negligible in some jurisdictions. The vaping industry may have to redouble its efforts in raising awareness and taking action to ensure that despite the higher taxes that it is a viable method of nicotine consumption.


That’s all for the latest State of Vape. If you have any questions or concerns regarding the PACT Act, check out our PACT Act page or contact your eJuices.co account manager or sales representative. We’re looking forward to speaking with you and helping your business succeed in the face of additional regulations.


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