When the Pennsylvania legislature passed a 40 percent e-cig tax earlier this summer, vape shop owners around the state couldn’t believe what they were seeing. Not only are the electronic cigarettes and the related e-liquids included in the new tax code, but even the individual components, such as the coils, batteries, chargers, cotton, and wire.
Even though these are all common materials that can be readily purchased at a conventional retail establishment without the extra tax, these items now fall under the new tax code when purchased in a local vape shop. The new legislation goes by the name The Pennsylvania Tobacco Products Act, and at least one vape shop owner has decided to take his disapproval of the new law to court.
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Bob Oesterling opened the Smoke 4 Less smoke shop in Clarion back in 2010. Within two years he began selling e-cigs and vaping technology while witnessing hundreds of his loyal customers quit smoking and start vaping.
And according to Oesterling, more than 70 vape shops around the state have already been forced to close their doors due to the higher tax requirements. Oesterline fears that his smoke shop may be next. So, last Tuesday he filed a petition against the state’s Department of Revenue with the Pennsylvania Commonwealth Court.
Pennsylvania Department of Revenue weighs in
A spokesperson for the Department of Revenue claims that the Tobacco Products Act defines electronic cigarettes as the devices used for the inhalation of “tobacco products.” Even though e-cigs and vaping devices are essentially 100 percent tobacco-free, the State of Pennsylvania along with the U.S. Food and Drug Administration (FDA) consider e-cigs and vaping devices to fall into this category.
Since this categorization issue is already traveling through the federal court system via the historical lawsuit filed by Nicopure Labs and others, Oesterling’s petition wants the Pennsylvania tax code to be clarified to exempt all vape-related products other than the electronic devices themselves and the related e-liquids.
The petition charges that the attempt to tax more common items like cotton, wire, and wicking materials is an improper effort by the Pennsylvania legislature to expand its legal authority. It also contends that the 40 percent tax hike is a violation of separation of powers and of the uniformity clause requiring taxes to be uniform upon the same class of subjects. The spokesperson for the Department of Revenue also agrees that the 40 percent e-cig tax code is somewhat unclear.
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