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February 5, 2018

Legislators in Washington State are considering a proposal to implement a 60 percent floor tax on vaping and e-cigarette products. The monies raised by the levy would “help offset lost revenue from any legislation that raises the legal smoking age,” according to the bill’s text. The proposal would allocate 60 percent of the funds raised to the state’s general fund and the remaining 40 percent would be distributed to “the essential health services account,” a new fund created by the legislation to fund health services and tobacco and nicotine use prevention programs and to increase public health training. Funds from the tax would also be used to pay for the enforcement of the proposed legislation.


Opponents of taxes on e-cigarettes and vaping products argue they are counterproductive and offset some of the public health gains these tobacco harm reduction tools offer to combustible cigarette smokers, a claim supported by the available research, which shows e-cigarettes and vaping products are significantly less harmful than tobacco cigarettes.


In 2018, the National Academies of Science, Engineering, and Medicine (NAS) issued a report in favor of e-cigarettes. NAS found “substantial evidence that completely switching from regular use of combustible tobacco cigarettes to e-cigarettes results in reduced short-term adverse health outcomes in several organ systems.”


In 2017, NHS Health Scotland issued a statement promoting the use of tobacco harm reduction products.


In 2016, the Tobacco Advisory Group of the Royal College of Physicians concluded the harms to health from the use of electronic cigarettes are “unlikely to exceed 5% of the harm from smoking tobacco.” The group urged smokers to use e-cigarettes and vaping devices, which they referred to as a “massive opportunity for a consumer – as well as healthcare – led revolution in the way nicotine is used in society.”


In 2015, Public Health England released a significant report finding “best estimates show e-cigarettes [as] 95% less harmful to … health than normal cigarettes.”


Washington State policymakers should reject burdensome taxes and regulations on e-cigarettes and vaping products. Not only do they help people quit using tobacco products, they also have the potential to save the state a significant amount of money. J. Scott Moody, chief executive officer and chief economist at State Budget Solutions, says if e-cigarettes and vaping devices had been fully adopted in place of combustible cigarettes, savings to Medicaid could have amounted to $48 billion in 2012.


An extreme tax such as the one recently proposed in Washington State would negatively impact the vaping industry. This has already occurred in Pennsylvania. The Keystone State passed legislation in 2016 imposing a 40 percent wholesale tax on vaping products. Since the tax’s implementation, an estimated 120 vaping businesses have shut down. Research indicates vape shops “generate annual non-online sales of more than $300,000 per store,” and average $26,000 in monthly sales. Higher taxes will cause shops in Washington State to close their doors and consumers will be forced to look elsewhere, including online and out of state, for their vaping and e-cigarette needs.


The Evergreen State should avoid creating burdensome taxes on tobacco harm reduction products such as e-cigarettes and vaping devices. These products offer a valuable alternative for millions of combustible tobacco cigarette smokers and help governments save money and numerous small businesses obtain more revenue.

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 or Tobacco Harm Reduction 101.

Centers for Disease Control and Prevention Link Majority of Vaping-Related Hospitalizations to THC: Welcome
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