Vape News -
by Dustin

Vape Tax Goes Into Effect And More Store Close

Pennsylvania’s 40 percent tax on the vaping industry has gone into effect and it looks like the decision to go ahead with the tax will hurt both vapers and the state government.

The wholesale tax, which we have written about before here, was meant to help subsidize the state’s budget. By taxing wholesale vape products, such as vape devices and e-liquids, the state was hoping to fill a $13 million gap in the 2017 budget. And surprisingly, the tax was a bi-partisan bill that was passed through the Republican-controlled state congress and signed into law by Democratic governor Tom Wolf.

But it doesn’t look like the tax is going to get very far.

The website Reason is reporting that since the implementation of the tax on October 1st, there has been an influx of vape stores that are closing across the state, including some businesses that have multiple franchises. Other shop owners are liquidating their inventories and are set to close sometime in the near future. This follows the 50 stores that had closed prior to the tax becoming law.

This follows an attempt by Republican Representative Jeff Wheeland and Senator Camera Bartolotta to repeal the tax in favor of a more lenient and feasible tax. The proposed tax would be volume-based and would amount to five cents per milliliter of e-liquid. Although the amount may not seem as much, the duo has determined that the trade-off would be revenue neutral while allowing vape businesses to stay open.

The proposed amended tax would also take the burden off of vape shop owners. The current tax is a wholesale tax which is due no later than the beginning of December and counts both devices and e-liquids. It’s also a tax amount that most vape shops will not be able to sustain, which is the main reason so many vape shops are closing.

However, if Pennsylvania changed the law to the amended tax, vape shops could pass on the tax to their customers, allowing them to stay open while paying the tax that the state requires. The five cent tax would amount to a $1.50 raise in price for a 30 ml bottle of e-liquid, something that most vapers can afford. It would be even less for a 15 ml bottle, which is the normal amount of e-liquid that a vaper would buy.

The amended tax isn’t dead in the water just yet, as the state assembly has up until the beginning of 2017 to repeal the tax and implement the new one, but it doesn’t look likely. With the impending presidential and state elections, lawmakers are estimated to have less than 10 working days before the session closes for the year. As of right now, the 40 percent wholesale tax is in effect.

As Rep. Wheeland said when speaking to reporters about the tax, “I am 100 percent confident that 40 percent of nothing is nothing.” And if vape shops continue to close, Pennsylvania won’t get anywhere near the $13 million the state feels it would earn from the wholesale tax.

We will continue to update you if and when there are changes in Pennsylvania’s vape tax.

The post Vape Tax Goes Into Effect And More Store Close appeared first on ChurnMag.


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