And just like that, West Virginia becomes the fifth state to increase the sales taxes on all e-cigs and vaping products. On Monday, June 14, 2016, the state’s House of Delegates voted 63-35 in favor of a substantial tax hike that includes a 7.5 cents per milliliter sales tax on all e-liquids. Furthermore, for any retailer outside of the state of West Virginia, a state-sanctioned approval process is now required.
How did the legislators push this new legislation through so quickly? By sneaking the new e-cig tax into the state’s amendment to the tobacco excise tax. West Virginia was in the process of revising the state budget to fill a rather large $271 million hole. Without a newly revised budget, all state-funded government services would shut down by July 1.
E-cig tax saves government shutdown in West Virginia
The only available measure that politicians could agree upon was to raise the sales taxes on tobacco products, but even this option would only accumulate an estimated $100 million in additional revenues. So once again, e-cigs and vaping products are being lumped into the same category as tobacco cigarettes, cigars, and chewing tobacco simply to make more money for government.
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One local politician came to the defense of the electronic cigarette industry. Del. Larry Faircloth introduced another version of the amendment that would have deleted the language relating to e-cigs and vaping products. But it was overwhelmingly denied.
Meanwhile, the website Americans for Tax Reform (ATR) is blasting West Virginia for its reliance on tobacco taxes to fund the state government.
“Targeted excise taxes have proven to be unstable sources of revenue, and ultimately can cause a reduction in tax receipts…In fact, only three out of the 32 state tobacco tax increases, enacted between 2009 and 2013, have met or exceeded tax revenue projects.”
In the process of publicly denouncing the state’s taxation methods, the ATR also issued an unexpected endorsement of electronic cigarettes and their relationship to public health. Even though many federal agencies are spreading information that e-cigs and vaping products are a gateway to smoking tobacco, which vapers strongly deny, the ATR seems to take the opposite view.
“These tobacco-free technology products are helping tens of thousands of smokers make the transition to far healthier alternatives. By imposing a 7.5-cent per mL tax on e-cigarettes…this punitive tax is both anti-health and a shameless cash grab…It is reckless to destroy with tax hikes small businesses accomplishing what tax hikes on cigarettes never could, getting people to quit smoking.”
The ATR has now become an unlikely but largely welcomed ally of the electronic cigarette industry in the War on Vaping with the federal government. The very basis of contention over the newly announced FDA e-cig regulations is that e-cigs and vaping devices are 100% tobacco-free and, therefore, cannot be taxed or regulated as tobacco products by the FDA. The ATR seems to be taking a very similar stance, which only helps the vaping community in the long term.
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