E-Cigarette Taxes

Over the last few years, electronic cigarettes (or e-cigarettes) have exploded onto the marketplace.  These products vaporize a liquid, often containing nicotine, and allow the user to breathe in the vapor.  This action is similar to smoking cigarettes, but substantially more healthy.  Though the products are too new for there to be definitive studies, all the early science makes it clear e-cigs are a much healthier alternative to traditional cigarettes.  Anecdotally, there are thousands of people who themselves have stopped smoking because of e-cigs.  While they do contain nicotine, they contain no more than what is in a traditional nicotine patch.

Retailers have embraced e-cigs not just because consumers have, but also because the profit margin on e-cigs is generally healthier than on traditional cigarettes.  Some members have reported that e-cigs constitute anywhere from 15%-25% of their “cigarette sales”.  Dozens of small businesses have sprung up throughout the state that cater to e-cigs.

Despite this, some legislators want to dramatically increase the cost of these products.  Currently, e-cigs fall under the state’s already too high sales tax of 7%.  Some legislators have introduced S-1867, which would institute a 75% wholesale tax on e-cigs and all of their components.  NJGCA strongly opposes this unfair, regressive, and unnecessary new tax.

On May 19, 2014 the bill was heard before the Senate Health, Human Services, and Senior Citizens Committee.  NJGCA testified in opposition to this new tax.  You can read the full testimony handed to the Committee  by clicking HERE and listen to NJGCA Executive Director Sal Risalvato HERE.

Testimony on the bill, mostly against, went on for an unusually long period of 3 hours.  At the end, the bill passed with 5 votes in favor, 2 against, and 2 abstaining.  Considering that 2 of the 5 yes votes were the sponsors of the legislation and 1 of the 5 said they might switch their vote in the future, this was a fairly good result.  In order to become law it must pass the Senate Budget & Appropriations Committee, the Assembly Health Committee, the Assembly Budget Committee, the full Senate, the full Assembly, and be signed into law by the Governor.