As vaping has become more popular in recent years, legislators have started to confront numerous issues related to the practice, such as how to tax vaping products. While many plans have been put forth, New Jersey recently had a bill introduced in its Assembly that many view as a massive tax on vaping.
According to the bill, known as A4391, a floor tax already signed into law by Gov. Murphy would be repealed, and instead replaced with a tax that would see nicotine-containing vapor products go from taxes of 10 cent/ml to a 3.5% retail tax. While many groups oppose any type of taxes on these products, A4391 is viewed as a possible alternative to the 10 cent/ml tax, which is viewed as not only punishing New Jersey consumers who purchase vaping products, but also specialty retailers who may find themselves at a competitive disadvantage.
To understand how the NJ Assembly got to this point, some background information is needed about the floor tax, also referred to as the inventory tax. With this tax, signed into law by Gov. Murphy on July 1, 2018, the law originally required retailers, wholesalers, and distributors to pay a one-time inventory tax on nicotine-containing e-liquid they have in stock on the first day of each month. While sounding harsh, it was noted that the Director of Taxation would have much discretion over this area, and that the possibility existed enforcement would not be strict.
75% Wholesale Tax
For many, what started this fight was the original 75% wholesale tax on vapor products, which was proposed by Gov. Murphy in his FY 2019 budget proposal. However, as opposition increased regarding this proposal, two other options were brought forth, which were:
–10 cent/ml tax on e-liquid containing nicotine
–20 cent/ml tax on e-liquid containing nicotine
Once these proposals were introduced, many opposed to any additional taxes on vaping products noted a similar measure that was enacted in nearby Pennsylvania had disastrous results, with numerous vapor shops being forced to close within months of the law being passed, and many more shops being put at risk of going out of business within one year.
What to Tell Legislators
Needless to say, with so much discussion about the possibility of increased taxes on vaping products, those opposed to the measure are urging others who feel the same to contact their legislators. If you find yourself opposed to the vaping taxes, you may call Assembly Budget Committee Chair Eliana Pintor Marin at 973-589-0713 or Senate Budget Committee Chair Paul Sarlo at 201-804-8118. Once you do, there are several points you should make during the conversation, including:
–Urge both chairs to withdraw their bills
–Due to the taxes on vaping products, more people would return to smoking cigarettes
–The tax unfairly favors convenience stores and penalizes vapor shops
–Share your story about switching to vaping
By doing this and more, you will be able to have your voice heard on this important matter.