Pennsylvanian politician proposes House Bill 1362 to delay 40 percent inventory tax
On October 1st, the new 40 percent inventory tax for all vape shops in Pennsylvania officially took effect, and State Senator Tom Killion sees the potential devastation that this might cause to small business owners. According to Act 84, for every $100,000 in on-site inventory, the shop must pay $40,000 in taxes within 90-days. Many politicians in the state legislature are publicly admitting that the new tax seems unfair and somewhat prejudiced against one particular industry, and some have even promised to work towards getting the law revoked, by Rep. Tom Killion is going a step further.
Mr. Killion has introduced House Bill 1362 to the state assembly, an addendum to the 40 percent inventory tax that would extend the deadline another six months. Instead of having to pay that huge chuck of cash by December 31st, vape shops would have until the end of June 2017. According to Killion, this extension would give the vape shops enough time to sell off their excess inventory, and the Pennsylvania Congress can have enough time to revisit the original legislation, Act 84.
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The major complaint of many of the state’s vape shops is their huge backlog of existing inventory consisting of vape mods, pens, and other delivery devices that range in price from $30 to $300 or even more. These types of merchandise typically take much longer to sell because of the higher associated price tag, as compared to something like e-liquids or wicking materials, for example. Act 84 was enacted so quickly that many businesses were left holding way too much inventory, which threatens to run them out of business if the tax deadline is not extended.
50 Pennsylvania vape shops already out-of-business
Shawn Rogers is a military veteran who also owns two Pennsylvania vape shops. He recently told a local reporter that he is considering permanently closing both of his shops because he doesn’t have the money to meet the December deadline. He also states that some 50 vape shops statewide have already gone out of business, which is one of Rep. Killion’s biggest fears, as well.
According to Killion, the 40 percent inventory tax seems exceptionally high, especially for an industry that is essentially made entirely of Mom and Pop storefronts. If the state loses it’s 300+ vape shops due to over-taxation, they also lose the profits from those shops and the related sales taxes. Meanwhile, hundreds of families lose their livelihood. While Killion’s House Bill 1362 might only delay the inevitable, at least Pennsylvania vape shops will have a fighting chance.