Pennsylvania’s new tax on vape shops raising prices on retailers and customers
In Pennsylvania, a new tax has just been passed on Vape products and is raising concern for business owners and consumers alike. The new Pennsylvania state budget is now setting a 40 percent tax on the wholesale price of e-cigarettes and vaping products — and that’s already on top of the six percent sales tax business owners already pay.
Inside of one Vape shop in Pennsylvania, the Cloud Jammer vape shop, a bottle of e-liquid (e-juice) can cost anywhere from $12 to $16. The new tax will raise the price rather significantly for vape shops. With the base price at $12 to $16, plus the new 40 percent tax on each bottle, vapers can expect to pay more for their products across the entire state. This is causing prices to sour above what a lot of vapers are willing to pay.
Many customers are already planning on cutting back on the amount of e-juice/e-liquid as well as other vape products they buy, because they can’t afford to pay that amount of tax on top of the base prices.
“There’s no way around it,” the owner of Cloud Jammer, Dennis Brogan, said.
Why Was this New High Tax Passed?
The reason this tax was passed is that Pennsylvania lawmakers are trying to balance the state’s budget. Of course, they turned to the nicotine industry to they jacked up the price of cigarettes by one dollar per pack. But the vaping industry said they got smoked, too. Even worse, actually.
While traditional smokers are going to be upset enough with the $1 raise on their cigarettes, vapers are particularly affected, and can pay up to $8 more for the same bottle of e-juice, like at the Cloud Jammer vape shop.
While this recent Pennsylvania tax has been passed, House Bill 2342 would replace this 40 percent tax with a 5 cent-per-milliliter retail tax on the vapor liquid only. This could free up those who vape waxes and loose herbs, but the popular e-juice/e-liquids would suffer, as would their users. E-liquids are a big hit and a huge part of the vaping industry.
With the House Bill 2342, lawmakers said that this replacement law would help more than 350 businesses across the state.
However, for now, vape shops and consumers in Pennsylvania will have to limit their product use or pay a lot more than they’re used to. “I’m fortunate enough that we’ve been around long enough. We can afford it. It’s just I shouldn’t have to pay this. I mean this is money that I worked hard for to save up and to build my business and they’re like, ‘yeah we’ll take that now’,” the Cloud Jammer vape shop owner said.
Smaller businesses have a tougher road to stay open. The owner of Eve Vape, an online shop in Harrisburg, already sees trouble ahead. “I don’t see that it’s financially feasible for me to get a loan to start a vape store when I’m faced with such a huge tax,” owner Charles Huff, said.
Industry advocates said you can’t collect taxes if most vape shops close. With the raise in prices, employees will be laid off, unemployment will grow, business owners may be forced out, and the consumer will suffer having to pay higher prices just to compensate.
Purchasing e-liquids online may be an option for some, but with the cost of shipping and higher prices overall from buying online rather than local, it may not be worth it for many vapers.
We will have to see what happens with House Bill 2342 as the state tries to balance its budget. Many vapers are hoping that taxing vape products at this rate does not raise in any other state.