SB 673’s Nicotine Tax Risks Reversing Smoking Declines in the Mountain State

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Key Points:

• Legislative Overview: Senate Bill 673 would overhaul West Virginia’s vapor tax system by replacing the current per-milliliter tax with a nicotine-content-based excise tax, dramatically increasing costs on e-cigarettes.

• Core Shift: The bill repeals the existing $0.075-per-milliliter vapor tax and replaces it with a $0.03-per-milligram nicotine tax – tying tax liability directly to nicotine concentration rather than liquid volume.

• Stated Purpose: Lawmakers argue the change creates “parity” with the state’s $1.20-per-pack cigarette tax and would generate revenue for the Public Employees Insurance Agency (PEIA).

• Substantial Tax Increase:

  • A 30mL bottle at 6mg/mL would see its tax rise from $2.25 to $5.40.

  • A 30mL bottle at 12mg/mL would see its tax jump from $2.25 to $10.80 – a 380 percent increase.

• Adult Vaping Growth: In 2024, 149,270 West Virginia adults (10.5 percent) were current e-cigarette users – a 123.4 percent increase since 2016.

• Income Disparities: Among adults earning $25,000 or less, 11.4 percent were vaping, compared to 6.9 percent of those earning $50,000 or more – making low-income adults 1.7 times more likely to vape.

• Education Disparities: 12.4 percent of adults without a high school diploma were vaping, compared to 4.9 percent of college graduates – adults lacking a diploma were 2.5 times more likely to vape.

• Smoking Declines Correlated: Between 2016 and 2024, adult smoking fell by 16 percent – representing 65,886 fewer smokers – while vaping increased by 123.4 percent, representing 80,744 additional adults using e-cigarettes.

• Economic Impact of Smoking Reductions: With annual per-smoker costs estimated at $64,261, West Virginia’s smoking decline translates to roughly $4.2 billion in reduced smoking-related costs, including more than $211 million in health care savings.

• Harm Reduction Undermined: The U.S. Food and Drug Administration has authorized multiple vaping products as “appropriate for the protection of public health,” recognizing their lower risk compared to combustible cigarettes. SB 673 imposes cigarette-style taxation despite vast differences in risk.

• Revenue vs. Prevention: In 2024, West Virginia collected approximately $227.6 million in tobacco tax revenue but allocated only $451,404 – less than 1 percent – to tobacco control programs.

• Equity Concerns: Because vaping and smoking are disproportionately concentrated among lower-income and less-educated adults, steep nicotine-based taxes would fall hardest on populations already facing economic and health disparities.

• Policy Risk: A nicotine-content tax structured to mirror cigarette taxation ignores the continuum of risk and may push adults back toward combustible cigarettes or into illicit markets.

• Bottom Line: SB 673 significantly increases taxes on reduced-risk alternatives at a time when smoking is declining and vaping has expanded as a substitute. Rather than penalizing harm reduction, lawmakers should prioritize policies that accelerate smoking declines, stabilize PEIA through sustainable funding solutions, and preserve access to safer alternatives.

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Legislation introduced in the Mountain State would significantly increase taxes on vapor products by shifting to a nicotine-content-based tax rate. Lawmakers hope to raise funding for the Public Employees Insurance Agency (PEIA), but such draconian taxes risk undermining efforts to reduce smoking, as e-cigarettes – and other nicotine alternatives – are significantly less harmful than combustible tobacco and have helped many adults quit.

Senate Bill 673 would repeal West Virginia’s current e-cigarette tax rate ($0.075 per milliliter) and replace it with a nicotine-content-based excise tax of $0.03 per milligram of nicotine. Lawmakers argue this creates “parity” with the state’s current $1.20-per-pack tax on combustible cigarettes. The tax would be paid by the first distributor or wholesaler in the state.

All funds would be deposited into a special revenue fund dedicated exclusively to PEIA and must be used either to reduce employee premium costs or prevent increases in employee premium contributions. If enacted, the tax would take effect July 1 of this year.

The proposal would substantially increase the cost of e-cigarettes. Under current law, a 30-milliliter bottle containing 6mg/mL of nicotine is subject to a $2.25 tax (30 x $0.075). Under the proposed structure, that same product would face a $5.40 tax (30 mL x 6mg = 180mg). A 30mL bottle containing 12mg/mL would see its tax increase from $2.25 to $10.80 – a staggering 380 percent increase.

In 2024, according to data from the Centers for Disease Control and Prevention’s Behavioral Risk Factor Surveillance System, an estimated 149,270 West Virginia adults aged 18 or older were currently using e-cigarettes – representing 10.5 percent of adults. This reflects a 4 percent increase from 2023 and a 123.4 percent increase from 2016, when 4.7 percent of adults were vaping.

As with smoking rates, lower-income and less-educated adults vape at higher rates and would be disproportionately impacted by the proposed tax. Among adults earning $25,000 or less annually, 11.4 percent were vaping in 2024, compared to 6.9 percent of those earning $50,000 or more. Low-income adults were 1.7 times more likely to vape.

Similarly, among adults without a high school diploma or G.E.D., 12.4 percent were vaping, compared to 4.9 percent of college graduates. Adults lacking a diploma were 2.5 times more likely to vape.

The introduction of e-cigarettes in the Mountain State correlates with meaningful declines in smoking. Between 2016 and 2024, adult smoking decreased by 16 percent, representing 65,886 fewer adults smoking combustible cigarettes. During that same period, vaping increased by 123.4 percent, representing 80,744 additional adults using e-cigarettes.

According to WalletHub, the total annual cost per smoker in West Virginia in 2024 was $64,261, including $3,208 in health care costs. With more than 65,000 fewer adults smoking, this equates to an estimated $4.2 billion reduction in total smoking-related costs, including more than $211 million in health care savings.

E-cigarettes are cigarette substitutes that the U.S. Food and Drug Administration has determined to be “appropriate for the protection of public health.” The FDA has authorized the sale of more than two dozen vaping devices, finding them less harmful than combustible cigarettes and effective in helping adults completely switch. State policies should encourage reduced-risk alternatives, not punish them through excessive taxation.

Rather than imposing additional tax burdens on West Virginians who would be disproportionately harmed, lawmakers should better allocate existing tobacco revenues toward cessation efforts. In 2024, the Mountain State collected an estimated $227.6 million in tobacco tax revenues yet allocated only $451,404 – less than 1 percent – to tobacco control programs.

At a time when West Virginia continues to face one of the highest smoking rates in the nation, policymakers should prioritize strategies that accelerate declines in combustible cigarette use – not policies that make reduced-risk alternatives more expensive and less accessible. A nicotine tax structured to mirror cigarettes may sound equitable, but it ignores the vast differences in risk between products.

If lawmakers are serious about improving public health, stabilizing PEIA, and reducing long-term health care costs, they should pursue policies that encourage smokers to switch – not ones that risk pushing them back to smoking or into illicit markets.

Nothing in this analysis is intended to influence the passage of legislation, and it does not necessarily represent the views of Tobacco Harm Reduction 101.