Certain members of the Vermont Legislature have quietly drafted bill H.879 that imposes a 92 percent tax on all vapor and e-cig products. This includes all vaporizers, e-juices, accessories, E-cigarettes, hookahs etc. The bill does not discriminate between nicotine, reduced nicotine or no nicotine products; rather it is an all-encompassing tax across the entire vape and e-cig segment of the industry.
This bill, if passed, will cause the sale price of these items to double overnight, resulting in a devastating effect on the thousands of Vermont residents who have found their way to using vapes and e-cigs as a healthier alternative to smoking cigarettes and for many, the means to quit the habit altogether. While vape and e-cig products have not yet been officially designated as "healthy," there is an overwhelming consensus from many experts and users, as well as many in the medical profession, that they are "healthier" than cigarettes. As a matter of fact, many users of these devices use them as a means to gradually move themselves away from smoking cigarettes and nicotine entirely.
It would appear that the purpose behind this tax is to discourage consumption of e-cigarette and vapor/liquid products due to potential health concerns. This reasoning would suggest that vaping or e-cigs pose the same health risks as cigarette smoking. Clearly, that is not the case. An article published online in August 2015 by Time Inc states that vaping is 95 percent healthier than smoking cigarettes. The article also makes reference to how vaping is 40 percent less expensive than cigarettes on an annual basis.
Dr. John Hughes, a professor of psychiatry at UVM, says the research is too scant at this point to link a danger to long-term use of e-cigs and vapor products. Hughes said that vaping is "healthier than smoking," that "e-cigarettes are significantly safer than tobacco products," and that the possibility of some metals released in the vapor are "small in comparison to the toxins in tobacco smoke." No one is arguing that vapor products are "healthy." But relative to other tobacco products, they are certainly "healthier." Taxing vapor products and e-cigarettes would discourage Vermonters to shift to this proven healthier alternative.
As a vape shop retailer, our store and our employees invest the required time, effort and resources to encourage, educate and convert many long and short-term cigarette smokers to switch to vapor/liquid products. We take comfort in knowing that we are helping to increase awareness to our cigarette customers that there is a lower cost, healthier alternative. This equates to a healthier population among smokers.
Should this bill pass and for the loyal customers who continue to purchase vapor products in perhaps the few remaining vape shops in the state, they would also be unduly burdened by this tax. These types of excise taxes on consumable goods hurt low-income earners the hardest, since these individuals tend to spend a greater proportion of their income on consumption. This tax would not be "progressive," but rather "regressive."
The unintended consequences of this bill would be overwhelming and unfortunate.
Business will close. Vermont smokers will pay the hefty increase either in dollars or health. Vermont will not only fail to see the anticipated new revenue from the 92 percent tax but it will also see a reduction in sales tax revenue from these products as sales diminish. Additionally, vape shop employees will be laid off and would then require state benefits. A few states have experimented with this type of tax as a source for additional state revenue. After Montgomery County in Maryland passed a wholesale tax on these products, the actual revenue collected was roughly 80 percent below the expected revenue from the tax due to lawmakers' failure to consider market forces. Of the few other states that tried this approach, they too have discovered that several factors were not considered when enacting this type of taxation.
Sometimes we need to consider the greater good. It would be ideal if there was no need for the vape or e-cig industry. However, this is not reality. Cigarettes have and will be around for quite some time. The vape industry has tapped into the means to save cigarette smokers money, decrease their health risks, indirectly lower the burden of cost for their health care, allow them to spend the savings on other goods and services and provide jobs and revenue for the state. This new tax will rapidly extinguish all of this and bring us back to a period before vapes and e-cigs existed.
— Edward Dublois is the owner of the Beverage Den and Vape Shop in Bennington.