DRACONIAN TAX IN ARIZONA COULD WIPE OUT VAPING INDUSTRY
April 5, 2017
Vape shops could soon be forced to shut their doors due to legislation introduced in the Arizona Senate. Sponsored by state Sen. Juan Mendez (D-Tempe), the legislation proposes a 95 percent wholesale tax on vapor products, “including e-cigarettes, cartridges and [e-liquid] containing nicotine.”
Opposition to the legislation – including the Consumer Advocates for Smoker Free Alternatives Association, a vaping advocacy group – argues the “95% tax on vapor sends the confusing and inaccurate message that vaping is just as hazardous as smoking.”
Similar legislation in other states has produced detrimental results. In its 2016 budget, the Commonwealth of Pennsylvania included a vaping tax on “40% of the purchase price of the wholesaler or manufacturer.” Now, less than one year after it went into effect, Pennsylvania state legislators are attempting to reverse the tax. State Sen. Camera Bartolotta (R-Mononghela) introduced legislation to replace the 40 percent tax with a five-cents-per-milliliter tax on e-liquids. In a March 2017 news release, Sen. Bartolotta said the 40 percent tax “has already resulted in the closure of more than 100 small businesses and the loss of several hundred jobs in the industry.”
E-cigarettes have proven to be effective products for tobacco harm reduction. Dr. Brad Rodu, senior fellow for The Heartland Institute, has over 20 years of experience researching and educating the public about alternative nicotine delivery systems, including smokeless tobacco products, such as e-cigarettes. Rodu’s research on smokeless tobacco and e-cigarettes provides extensive proof these products effectively deliver nicotine without the harmful chemicals associated with combustible tobacco cigarettes.
Other scientific institutions have researched the role of e-cigarettes as a tobacco harm reduction product and have found similar results. A 2015 report by Public Health England concluded e-cigarettes are 95 percent less harmful than traditional tobacco cigarettes and “could help reduce smoking related disease, death and health inequalities.” In 2016, the Tobacco Advisory Group of the Royal College of Physicians published an updated report on the use of tobacco harm reduction products. The authors concluded, “In the interests of public health it is important to promote the use of e-cigarettes … as a substitute for smoking.”
E-cigarettes could also provide a positive impact on health care costs. J. Scott Moody, chief executive officer and chief economist at State Budget Solutions, examined the impact of cigarette smoking. He found, “The potential savings of e-cig adoption, and the resulting tobacco smoking cessation and harm reduction, could have been up to $48 billion [in 2012].”
Instead of significantly damaging small businesses with a draconian vaping tax, state lawmakers in the Grand Canyon State should embrace e-cigarettes and similar products, which can serve as important tobacco harm reduction products. Lawmakers should propose ways to promote alternatives to smoking, rather than ostracizing these products as if they are the same as tobacco cigarettes.
Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute.