Pennsylvania vape shops are reacting harshly to new legislation requiring a 40% sin tax on all e-cigs and vaping products. On October 1, 2016, retailers statewide will be forced to calculate the total cost of all in-house inventory and immediately hand over almost half of the total value to the state government. Perhaps even more alarming, the state has also added a possible 5-year prison term for vape shops or consumers who attempt to buy or sell e-cigs and vaping products online without paying the tax.
Understandably, vape shop owners are facing a difficult dilemma. As October 1 approaches, they need to reduce their levels of inventory as much as possible to avoid paying excessive fees while also making sure to have enough stock on-hand to fulfill customer orders. That is, if they can even afford to stay in business beyond the October deadline in the first place.
Pennsylvania sin tax + FDA deeming regulations = Too much to handle
George and Kim Predmore, co-owners of Mountain Vaporz in Tannersville, are especially concerned about the double-whammy-effect of the new Pennsylvania sin tax coupled with the August 8 prohibition date of the FDA deeming regulations. While the FDA requires all e-cig retailers in the United States to register as “tobacco manufacturers,” the paperwork is not readily available in Pennsylvania until after the Aug 8 prohibition date.
What makes the Pennsylvania legislation so dramatically different from the FDA e-cig regulations is that the state is attacking both retailers and consumers alike. The sin tax is retroactively applied to all inventory purchased before October 1 that has not already been sold. And according to Bill Goodshall, Executive Director of Smoke Free Pennsylvania, “This law also attacks consumers by demanding they self-report online purchases to the Department of Revenue, with stiff consequences for non-compliance.” Most political pundits agree. If something doesn’t change soon in the beautiful state of Pennsylvania, nearly 300 vape shops are at risk of closing their doors permanently by the end of 2016.
(Related Article: PENNSYLVANIA PASSES 40% E-CIG TAX; 300 VAPE SHOPS FACE IMMINENT CLOSURE)