Taxable Vapor: Washington Legislature Considers Taxing Electronic Cigarettes Like Tobacco Products

The Taxfather
I’ll make a tax they can’t refuse.

By Darren Smith, Weekend Contributor

In the seemingly endless hunger to tax everything under the clouds the Washington Legislature is considering placing a 95% wholesale tax on electronic cigarettes and supplies. Currently retail sales of e-cigarettes are taxed as ordinary sales tax where as tobacco products are taxed at the highest wholesale tax rate in the United States. 

Not to be pushed out of the tax racket, the various families at the state legislature are trying to make sure their interests are “protected”.

Washington law defines taxable items subject to tobacco taxes which are levied against products that contain tobacco products. Cigarettes are the highest taxed of all tobacco products but cigars are taxed at a much lower rate, and pipe tobacco at a different rate. Presently e-cigarettes are not subject to the wholesale tobacco taxes because they do not contain tobacco.When Washington raised wholesale cigarette taxes to the highest level in the United States several years ago, many cigarette consumers switched to two avenues to avoid the high tax rates. One was to start smoking what are referred to as “little cigars” which are essentially miniature cigars with filter tips on them. It did not take long for the Washington legislature to catch up with this and changed the law accordingly. Next came a cottage industry that came up where roll-your-own establishments having machines customers could use to roll their own cigarettes using pipe tobacco sold in house. Many businesses offering this service began to spring up as a pack of these cigarettes was less than half the price of regular cigarettes. But once again the legislature seeing loss of revenue changed the tax laws to go after this form of tax dodging and as a result most of those businesses closed.

So now that electronic cigarettes have come into play a great many “vapor shops” opened offering various products and demand has been quite large due to their lessened cost and smoke free nature. But it was not long before politicians saw the loss of revenue from people switching to the state favorite tobacco product of cigarettes to the wholesale tax free electronic version.

Vapor CloudOne has to ask at this stage what the real purpose of sin taxes is in Washington. Politicians claimed the high taxation levels were designed to lessen the number of smokers and provide money toward health care costs relating to tobacco usage. But here, there is no tobacco, only a device to vaporize gels containing nicotine. Would nicotine patches be next? It’s not so far fetched an idea. After Washington legalized and state regulated marijuana sales at huge tax rates, the legislature then went after the medical marijuana dispensaries to put them out of business. They claimed loss of tax revenue because medical marijuana dispensaries were not subject to the marijuana tax. Those with medical conditions, including cancer patients and numerous others who benefit from medical marijuana will likely have to go to retail recreational marijuana outlets and pay likely more than twice what medical marijuana sells for. So are nicotine patches next?

According to KING5 News which reported on testimony before the legislature, many e-cigarette customers and retailers were worried their interests might be snuffed out by the legislature.

“I pay my taxes very happily, but I feel this bill to be asinine,” said Tammy Brookins, manager at Olympia’s Volcano Vapor Cafe.

She fears that essentially doubling the cost of her businesses products could put Volcano Vapor out of business. She also says it could scare cigarette smokers from converting to what she believes is a healthier alternative.

“I feel like it saved my life,” testified Zach McLain, who said he no longer smokes cigarettes after changing to tobacco-free e-cigarettes.

One of the bill’s sponsors, Rep. Reuven Carlyle, D-Seattle, said the e-cigarettes should be taxed like a tobacco product because the vapors contain nicotine.

“This nicotine product is highly concentrated,” said Reuven, “It needs to be taxed in a parallel fashion, in my view, to traditional tobacco products, especially as it evolves towards young people.”

Of course the save the children angle did not just apply to Reuven, it seemed the Washington State Medical Association chose to become involved.

Susie Tracy, with the Washington State Medical Association, supports the change in the tax structure, citing reports of increased use among middle and high school students.

But the need to save the children did not seem to be backed up by any evidence she could offer that e-cigarettes were harmful to children or others.

Susie told lawmakers there have not been any studies done looking at how much healthier e-cigarettes are compared to standard cigarettes.

But what was truly a watershed moment for the legislature in its justification for taxing e-cigarettes as being health related to tie these products to tobacco to nicotine to e-cigarettes it seems that even consumers and retailers of nicotine free e-cigarettes are worried what comes next.. Several e-smokers testified they use nicotine-free vapors and therefore should not face the tobacco tax.

It should also be noted that according to the Washington State Department of Revenue, approximately 40% of all cigarettes possessed in the state are untaxed bootleg smokes illegally brought into the state due to the high taxes.

Sources:

King5 News
Revised Code of Washington

By Darren Smith
The views expressed in this posting are the author’s alone and not those of the blog, the host, or other weekend bloggers. As an open forum, weekend bloggers post independently without pre-approval or review. Content and any displays or art are solely their decision and responsibility.

39 thoughts on “Taxable Vapor: Washington Legislature Considers Taxing Electronic Cigarettes Like Tobacco Products

  1. Surprisingly there is still too much unknown about the vapor cigarettes to be allowed in the US…. I recall reading a story about an importer when the first hit shore could not get them in to the US because the FDA said they had not been classified yet…. Surprisingly the importer had millions invested lobbied congress…. Surprise…. He we sit today….

    Should they be taxed…. I’m not sure…. Should they be banned until further study is conducted….. We can take our lessons from France…. They ban first test later…. We use first and test later….. Guess that’s why the US money has In God We Trust…..

  2. Electronic cigarettes for tobacco and cannabis sales are exploding in California and soon nationwide. There is this negative energy of Dems who hate tobacco and love taxes and the draconian way they approach electronic cigs is reprehensible. Tobacco is addictive. But the vaporization of it eliminates the carcinogens. Alcohol, gambling, eating for chrissake are addictive. I talk w/ many people using these E cigs here in California. Almost to a person, they’re using these cigs to wean themselves OFF of smoke tobacco. That is behavior that should be REWARDED, not taxed death.

  3. Nick,

    As one that still smokes…. I think I can speak for myself …. Yes, sin taxes are terrible…. But I am still Leary of ecigarettes….

  4. One definition of a vapor is any sort of aerosol that is visible and somehow dissipates into apparent invisibility. In that sense, ordinary tobacco smoke is a vapor.

    Dilute any solid or liquid particulate aerosol vapor sufficiently, and it will cease to be visible in the ordinary sense of human eyesight visibility.

    Accuracy of thinking is not always welcomed by people who cherish inaccuracy of thinking.

    I once worked, while in high school, for a commercial establishment which had equipment that melted metal, and which had, in places where a fire might plausibly start, glass carbon tetrachloride fire extinguisher “bombs” meant to be thrown at any fire. To my knowledge, no such fire ever happened at that commercial establishment.

    However, throwing carbon tetrachloride on a fire can produce a vapor that, sufficiently heated, tends to decompose by forming phosgene gas.

    One way to clear phosgene gas from the atmosphere is to have people breathe it, and thereby absorb/adsorb it. That method of collecting atmospheric phosgene gas vapor is not very efficient, because of the subsequent bother of collecting (the dead bodies of) the phosgene collectors.

    Yeah, I read some things about the history of World War I while in high school.

    There are many vapors that are vastly more toxic/lethal than cigarette smoke vapor. How many toxic vapors, if any, are emitted by e-cigarettes is presently beyond my ken.

    Sometimes, I cry with sorrowful words.

  5. nick spinelli wrote: “Almost to a person, they’re using these cigs to wean themselves OFF of smoke tobacco. That is behavior that should be REWARDED, not taxed death.”

    I know two people who quit this way. I agree that this behavior should be rewarded, not taxed. Might also add that it gets rid of the problem of second hand smoke, so that is another reason that maybe government should actually subsidize e-cigs. lol

  6. I am a heavy smoker… and just started using e-Cigs….
    I am getting pissed…. They removed smoking in public in the USA…
    Luckily I live in Europe, where people still smoke… HOWEVER, it seems the EU wants to BAN E-Cigs….
    I am so SICK of everybody picking on us smokers…

    WE are the easy low hanging fruit…. it is pathetic…

  7. The paranoia and borderline hysteria over e-cigs is absurd. But as usual, policy driven by emotion vs. facts is par for the course.

  8. Speaking of taxes, the folks that found the gold coins in their backyard owe the federal and California state governments 47% of the value of the coins. What a country

  9. Jag, We were in Italy a couple months ago. They LOVE to smoke! You are correct that the US has demonized smokers. But, Vegas and Indian casinos remains a bastion for smokers. I went to an Indian Catholic Church, tobacco is a sacrament for Indians.

  10. That’s why you’re JAG! I smoked for 20 years. Marlboro. I quit when my old man died of a stroke. Being libertarian, I have been appalled @ how smokers have been demonized. And, although I’m a former smoker, I don’t have an ounce of Elmer Gantry in me. “Smoke if you got ’em.”

  11. Awwwwww Nick, Thank you…
    yeah, I smoke 2 packs of Marlboro 100’s a day….
    I am TRIED cutting it back to 1 pack a day… It is just NOT easy….

    Strangely, I don’t look older than I am…. though people LOVE to tell me that smoking will age me prematurely…

    in fact, last time I went to the doctor he asked me what is my secret to looking young….
    I said….
    “Drinking tequila shots and smoking 2 packs a day… ”

    I am certainly not your typical female….. ;)

  12. E-Cigarettes should be regulated and taxed just like cigarettes. They are drug delivery devices and should treated as such. Non users should not be subjected to Their exhaust.

  13. I m not a smoker and I cannot sit near anyone smoking because of the smell and I have asthma. Even before I had asthma, I could not stand being in bars and restaurants with smokers. I have no problem taxing e-cigs if they are shown to be harmful. Smokers cost us all in second hand smoke and in medical expenses that we end up paying for. If you want to smoke outside or on your property, knock yourself out. However, I have a right to be smoke free in public places. Restaurants and bars in Illinois found out that keeping smoke out of their establishments did not hurt their business overall.

  14. I was reading a libertarian blog the other day, and was quite shocked by what they said…
    This was a DOCTOR who wrote this…
    Now, I do not think that smoking is healthy…
    However, it is NOT as dangerous as many have us thinking….

    I thought for SURE that since I smoke 2 packs a day, I will most likely die of lung cancer…
    However, the numbers are NOT as bad as they tell us….
    it is only 10% of the smokers who get lung cancer…

    http://www.sott.net/article/242962-Smoking-Does-Not-Cause-Lung-Cancer-According-to-WHO-CDC-Data

  15. justagirl,
    Even if this article is correct, I think you also need to look at second hand smoke and other breathing ailments that are exacerbated by smoking or that smoking can be one of the causes. Much of the literature talks about preventable causes of cancer. There are many other factors, but most of them we cannot control. Smoking is one that we can control. For me, 10% sounds like a large figure when you consider how many people smoke.

  16. Old song lyric from the eighties, updated:

    “All I need is the air that you breathe… and to tax it.”

  17. justagurl:

    yeah, COPD and emphysema are much more pleasant, clinging to oxygen concentrators and oxygen bottles, icing on the cake, checking into emergency rooms as every cold or flu leads to pneumonia, priceless.

  18. justagurlinseattle wrote: “the numbers are NOT as bad as they tell us….
    it is only 10% of the smokers who get lung cancer…”

    It is all in how the statistics are presented. That article documents an 800% increase in lung cancer death by smokers, but hides it by speaking about 8% versus 1%.

    Here are stats presented by the CDC:

    http://www.cdc.gov/tobacco/data_statistics/fact_sheets/health_effects/effects_cig_smoking/#definition

    Smoking is the leading preventable cause of death in the United States.
    Cigarette smoking causes more than 480,000 deaths each year in the United States. This is about one in five deaths.

    Smoking causes more deaths each year than all of these combined:

    Human immunodeficiency virus (HIV)
    Illegal drug use
    Alcohol use
    Motor vehicle injuries
    Firearm-related incidents
    More than 10 times as many U.S. citizens have died prematurely from cigarette smoking than have died in all the wars fought by the United States during its history.
    Smoking causes about 90% (or 9 out of 10) of all lung cancer deaths in men and women.1,2 More women die from lung cancer each year than from breast cancer.
    About 80% (or 8 out of 10) of all deaths from chronic obstructive pulmonary disease (COPD) are caused by smoking.
    Cigarette smoking increases risk for death from all causes in men and women.
    The risk of dying from cigarette smoking has increased over the last 50 years in men and women in the United States.

    Smokers are more likely than nonsmokers to develop heart disease, stroke, and lung cancer.
    Smoking is estimated to increase the risk—
    For coronary heart disease by 2 to 4 times
    For stroke by 2 to 4 times
    Of men developing lung cancer by 25 times
    Of women developing lung cancer by 25.7 times
    Smoking causes diminished overall heath, such as self-reported poor health, increased absenteeism from work, and increased health care utilization and cost.

  19. I NEVER said it was healthy…
    I do think that the info out there is OVER dramatized….
    My mother has COPD, she is a NON-smoker…
    Every person that I have known with lung cancer was a non smoker….

    WE live in a plastic society… and that is FAR MORE harmful than
    smoking…… every plastic item in our homes emits a toxic fumes, yet we are not outlawing plastic……

    people with asthma have attacks with perfumes and cooking odors….
    smokers are not the only people who cause issues for asthma sufferers….

    Drinking causes FAR more issues than smoking does, yet, EVERYBODY likes to pick on smoking because it is LESS popular than drinking……

    Now even this e-smoking or vaping as it is called is getting picked on….
    It is getting quite tiresome….

  20. Another aspect of this is how this bill would have made it illegal for any other state of nation to sell e-cigs by internet or mail to Washington citizens; this would seem to infringe on the federal government’s management of interstate commerce. I wrote several letters to our state legislators; my own senator wrote back that this bill had not gotten a hearing, that none was scheduled and it seemed unlikely there would be a hearing. So I am hoping this means it is dead in the legislative water.

    Washington revenues have been negatively impacted by the loss of homes, and by the many initiatives of Tim Eyman; but if they need more money? They need a tax on something more literally harmful to children and others — tax junk food, tax things sold in the plastic bottles that litter the roads and shores of our state, tax sugary, fatty treats that increase obesity in children.

    E-cigs don’t cause second hand smoke, which really DOES endanger children, nor do they cause the annual forest fires created by tossed cigarettes and cigars.

  21. Reblogged this on SiriusCoffee and commented:
    Living here in the supposedly progressive state of Washington, I’ve come to realize that Progressives care about a very limited set of issues: Abortion, GLBT, and Equality (because everything should be equal). In everything else? Tax and Burn – because you just can’t spend from the public trough fast enough!

  22. Where do cigarette taxes go? For cancer cures, asthma,other lung problems? If not why should cigarettes be taxed at all, not alone electronic cigarettes.Whats next a 50% tax on cola.

  23. This law is ludicrous. There have been several studies done that show vaping is not harmful, and contains no second hand “smoke” that anyone need be concerned with. As a matter of fact the FDA has approved ALL of the ingredients in them as same for humans. I used to work in theatrical supplies and stage “fog” is made from PG/VG. California who has some of the strictest air quality laws of any states allows millions of gallons of this fog to be pumped out in Disney land every year, with signs all over the park stating they are meeting all requirements for the law that bans the use of toxins.
    Susie Tracy should be ashamed of herself. She is asking the state to impose this law and then asked for the funds from the taxes to be given to the Washington State Medical Association to further fund smoking cessation. Really? Further fund your programs that are NOT working while stealing from and industry that has PROVEN to be successful in helping thousands of people in this state alone to one and for all quit the deadly habit of smoking. Shame on her and shame on this state if they vote in this tax!

  24. No working American understands our tax code, except Constitutional Lawyers like our President. He really understands the tax code. I’m sure he thinks it is equitable for he has had time to address it but has remained insouciant

  25. No one has mentioned those of us who have quit tobacco completely and vapor zero nicotine e vapor..that’s the object for many of us..to quit.

  26. Guns are quicker. If you are going to kill yourself then choose an efficient weapon. When your obit is published and it says that you had “a battle with cancer” it sounds a bit specious. Sixty years ago humans had an excuse. They did not know that cancer, heart disease and emphysema are all caused by smoking. Now you do know. I don’t know about these ecigarette devices. Probably a way to quit the dirty tobacco.

  27. As soon as Big Gov caught on to the fact that smokers are quitting using Electronic Cigarettes a Panic Button was pushed. They do hate smokers just enough to make smokers feel deserving of punishment, just enough to force smokers to pay huge taxes. The taxes that depend on smokers smoking. When Forbes published the headlines last summer that the E-Cigarette Industry was going reach 2 Billion in sales, you can easily begin track where all this Banning, Taxing, and Controlling business $$$ crept up. For the 7 solid years of E-Cigarettes in use in the USA , 7 years, most people have laughed ha ha ha smokers are too dumb to ever figure out how to quit themselves, without paying into the $$$ system that tells them how UN NORMAL they are and how low down good for nothing except their tax monies $$$$$ Laugh laugh, laugh at the smokers, who could never be freed from the trap of ill health, and taxation the Government wants their money, ALL OF IT!,Smokers are paying MSA TST payments 435 Billion to be paid in perpetuity to all 50 States as long as cigarettes are sold…… Well, smokers in huge HUGE numbers are turning to their own grass-roots small businesses, Electronic Cigarette salvation that are 99% safer and affordable too and that has got the money grabbers, big gov, health orgs., big pharma who due to their endless lust for money would rather smokers smoke, choke and die young while they greasing their chins with the money they make off their victims (smokers) victims yes that is what I said, because this is the truth. There are no known ill effects from vaping… SCIENTIFICALLY PROVEN, so they invent them! Older smokers are ready to stop hurting themselves with smoking, so the gov and it’s buddies all LIE and cry and whine about the Chiiiiiiiilllllllldrin. Biggest lie going! It’s all about money and how to pick on one consumer group for supply and demand from them to their graves! Is this America? Is this democracy…….go look at the $$$ figures!

  28. I started Vaping and have not had a cigarette since. I don’t have a cough anymore, I don’t hack up brown s**t from my lungs, my clothes don’t smell, my car doesn’t smell. I vaper inside and my house, it doesn’t smell. I secretly Vaped in public places and no one has ever noticed any odor. No more carbon monoxide, none the the over 250 chemicals created by combustion, some which are carcinogenic. I have also gone over 1-2 years not using any nicotine more than once. I am all for studies on long term effects. Short term effects are Vaping and no nicotine or inhalant use leave me feeling the same. Cigarettes make me feel like I’m killing my lungs, my throat and the rest of my body. It immediately causes coughing, hacking and shortness of breath and makes everyone else think a stink like tobacco. Yes, lets kill vaping before it saves too many lives.

  29. A commenter above employed the phrase: Smoke em if ya gottem. It was employed by the tobacco companies in the John Wayne movie that promoted the war in Vietnam and tobacco. The Green Berets. The unit is plodding through the jungle looking for the Cong. They are tired. The Col. played by John Wayne calls a halt and they flop on the ground exhausted. Smoke em if ya gottem, the Waynester commands. And they light up. Of course the Cong is out there trying to locate us and they smell the smoke a mile away if they are downwind and sneak up and kill us. We were dumb to go to Nam. We were dumb to smoke. We were dumb to get shot. We were dumb to listen to the tobacco companies and the Military Industrial Complex. If we made it past the Cong and made it home and retired from our jobs we can sit at home in our dotage and smoke and finally die of heart disease, cancer or emphysema. Tanks John Wayne. Oh, there weren’t no Redcoats in Nam.

  30. IHAVE BEEN A SMOKER FOR 46 YRS AND LAST CHRISTMAS OLDEST SON GAVE MYSELF AND HUBBY A E-GO DEVICE VAPOR SMOKER HUBBY HAS BEEN SMOKING FOR 50 YRS I WILL NEVER GO BACK TO A REGULAR CIG OR HIM EITHER WE STARTED OT AT 24 MIL GRAMS AND R DOWN TO 14 MIL NOW IF THE MAKERS OF THESE E CIGS WOLD NOT FLAVOR THEM AND MAKE ADS LOOK LIKE CARTOONS I FEEL THAT KIDS WOULD NOT BE INTERESTED IN EVEN TRYING THEM ALL THE SENATE HEARING WERE WAS A WAY TO RISE OUR TAXES AND BY THE WAY WE HAVE SAVED QUITE A BIT OF MONEY BY VAPORING THANK YOU I ALSO FEEL WE NEED MORE TESTIMONIES FROM OLDER FOLKS THAT ARE TRYING VERY HARD TO QUITE SMOKING

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