The state of Washington has passed a sales tax which will devastate the owners of vape shops in their state by imposing a stiff, and poorly constructed tax on their ejuice products.
Interestingly, the law incentivizes a specific style of vaping. If you prefer nic salts vaped from a refillable pod, the tax will not hit you as hard as prefilled pod users and low nicotine, direct to lung vapers.
Do Washington state politicians hate subohm vaping and box mods? Or did the authors of the bill lack the requisite knowledge to construct a fair and logical tax structure?
This is a reasonable question because the law does not tax the nicotine content but the total volume of eliquid in the bottle. This is akin to the Chicago soda tax debacle. This ill-fated "sin tax" did not account for the ice in fountain drinks, and punished disadvantaged groups who sought high volume containers in order to save money. It was a sugar tax that also hit diet sodas but did not ding Whole Foods shoppers for purchasing cans of artificially flavored sparkling water.
Washington E Juice Tax
The Washington law does make a distinction between closed and open systems. Closed vape pod systems, such as cartridges and prefilled pods, are taxed at a rate of 27 cent per ml. Ejuice bottles for open vaping systems, like refillable pods and tanks, will be hit with a 9 cent per milliliter tax.
The tax is applied, “regardless of whether it contains nicotine.” In other words, vapers who use low and no-nicotine ejuices pay the heaviest price. Since the tax is on the volume of liquid and not the nicotine, the tax incentivizes the use of higher nicotine ejuices, and nic salts. This makes no sense if the goal is promote vaping cessation or titration. For more information on nic salts, check out our feature deep-dive “What is Salt Nic?”
On paper, the tax will hit users of prefilled systems particularly hard as the rate is three times higher. But a Juul pod holds a mere 0.7ml and a Vuse Alto contains just 1.8ml. A nic salt bottle of equivalent potency contains 30ml. The result is that your $20 Juul purchase or $14 Vuse Alto pod purchase are not hit with a particularly stiff tax bill when compared to the transaction amount. A 120ml bottle of ejuice, the standard size for lower nicotine blends, generally runs about $25-30. This bottle would be taxed an additional $10.80.
If the goal of this law was to promote the use of potent nic salts in open pod devices, mission accomplished.
Washington Tax Promotes High Nicotine Nic Salts
Since the law is promoting nic salts and open pod systems, we recommend checking out our feature of the Top Ten Juul Alternatives. Apparently, this is style of device and vaping is what the state of Washington wants vapers embrace.
Refillable pod systems filled with potent nic salts are a popular combination, and that was before the state of Washington imposed perverse incentives that warp the market.
Tax or no tax, you could liberally change coils and throw away your refillable pod system after each 30ml nic salt bottle you vape, and it would still be far less expensive than the 42 prefilled Juul pods it takes to equal one bottle of nic salt.
The law is projected to generate almost $19.1 million in revenue over the next two years. Half of the proceeds will be dedicated to cancer research and programs dedicated to preventing tobacco use and nicotine. This windfall will be obtained at the expense of marginalized groups and lower income adults.
Although you get taxed whether you vape nicotine or not, “’Vapor product’ does not include any product that meets the definition of marijuana, useable marijuana, marijuana concentrates, marijuana-infused products, cigarette, or tobacco products.”
Washington Vape Tax Punishes Marginalized Groups
That this law hurts those who can least afford it should not be a surprise to anyone who has tracked e-cig regulations or “sin taxes” in general. Strict e-cig laws harm marginalized groups, and this is due to the fact the wealthy have largely given up smoking in the United States.
On the flip side of the coin, wealthy and highly educated adults consume alcohol at the highest rates. The scourge of liquor, which kills 5,000 teens annually, will surely not be allowed to impede their freedom to imbibe or purchase their wine of choice.
Vaping and smoking are most common in the LGBTQ plus community, which uses e-cigarettes at twice the rate of the rest of the population. Rural residents smoke at a higher rate, and suffer worse health outcomes. African Americans are the demographic group most likely to embrace vaping, and avoid the dual use of e-cigarettes and regular cigarettes.
All of these disparate trends make sense when you consider the study published in the New England Journal of Medicine this winter, which found e-cigarettes are twice as effective as nicotine replacement for smoking cessation. Rural areas have limited access to cigarette alternatives outside of gas stations and convenience stores, which prompted Iowa AG Thomas Miller to blast the FDA for their new e-cig regulations this fall.
The teen vaping epidemic is a serious concern that poses an existential threat to the vaping industry. But the best way to deal with it is not punish adults looking for smoke and ash free alternatives.