Indiana Lawmakers Mull Unprecedented Taxes, Tobacco 21
Vapers and business owners in the Hoosier State have a lot on their plates these days, as lawmakers not only want to adopt Tobacco 21 statewide, but they also want to raise the e-liquid tax rate a whopping 20%.
The journey to both laws began in February, when the Indiana Senate Health Committee voted 8-2 to raise the purchase age from 18 to 21 for cigarettes, tobacco products and e-liquids. Possession age would stay at 18 for products even if they don’t contain nicotine. In terms of taxes, at this point in time the House Ways and Means Committee endorsed a 0.4 cent per mL e-liquid tax. Then, the tax battle heated up in late February, when minors from the “Raise it for Our Health” campaign headed to the statehouse to urge lawmakers to raise the cigarette tax by $2. Fox 59 reported there is a “parallel push for a tax on nicotine-containing e-liquids. Sponsor of the e-liquid tax, Rep. Mike Karickhoff (R-Kokomo), told Fox 59, “E-cigarettes, sometimes are used to help people stop smoking, but sadly more often than not they’re used to targeted to kids and kids get hooked on them.”
However, the House Ways and Means Committee didn’t agree at the time, and the budget amendment on the cigarette tax didn’t pass. Further, the Indiana Petroleum Indiana Petroleum Marketers and Convenience Store Association, which represents gas stations and convenience stores, told Fox 59 in a statement that it “‘strongly opposes tripling the state tobacco tax’ and that that issue of an e-liquid tax ‘should be studied further.’”
Moving into March, the 0.4 cent e-liquid proposal passed in the House. The .04 cents would cost taxpayers an extra 11 cents for a Juul four pack, a 60 mL bottle would be elevated to an extra $2.40, and a 100 mL bottle would soar to an extra $4.00 in taxes alone. At this time, the Indiana Chamber of Commerce voiced its support on the tax. Shadi Khoury, founder of Indy E Cigs, which is a chain of Indiana-based 11 vapor stores and distribution, along with being co-owner of e-liquid manufacturer Sugar Creek Bottling Co., gave a statement to Wane.com:
"HB1444 is a worrisome tax for the following reasons. Firstly, the tax inhibits small business growth. Being that we are a small business located in Indiana, a tax of .04 per milliliter will cause our average product to be taxed at $2.40 (60 ml) and this tax is to be paid at the manufacturing/wholesale level. The way the bill is currently written will be financially burdensome on small business in the state. Additionally the way the tax is to be collected will be challenging and inefficient as well as putting an undue financial hardship on business owners due to the collection methodology. Secondly, .04 per milliliter is not fair. Industry leading products that come in pods are going to be taxed at approximately .10 per four-pack of pods, whereas our 60 ml product with comparable nicotine levels will be taxed at $2.40, which is about 24 times higher. Lately there has been a lot of press that vaping is a leading way to help cigarette smokes kick the habit. So, why are we going to put a hefty tax on it? Why not tax it similarly to the way we tax nicotine gum, the patch or lozenges? We should not be focusing on ways to curb adults from switching from tobacco to vaping. Ultimately, if our product is going to be taxed, we want it to be fair. We don’t want to put huge burdens on small business owners throughout the state, while giving large out of state corporations an advantage in our home state. We look forward to continuing our discussion with lawmakers in Indiana in hopes of coming to an agreement on fair policy."
We now move into April, where the Senate Appropriations Committee has voted in favor of a bill that would tax e-liquids at 20%.The proposed tax moves to the Senate for review.