The state House may have agreed on a plan to tax vapor products and liquid nicotine, and part of it involves raising the smoking age for traditional cigarettes to 19.
House leaders say their goal is to keep high school students from getting addicted to nicotine, in all of its forms. Restricting sales of all nicotine products — from vapor pens to tobacco-burning cigarettes — to adults 19 and older will help accomplish that, said state Rep. Reuven Carlyle, D-Seattle.
“The fundamental goal of everybody at the table has been to get e-cigarettes and all tobacco-related products out of the high schools,” Carlyle said. “There’s a general agreement that this is a sensible way to go forward on that.”
E-cigarettes are battery-powered devices that vaporize liquid nicotine to create the sensation of smoking a cigarette. Many smokers have turned to them in recent years to help them quit smoking tobacco products.
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The House plan would limit sales of both vapor products and combustible tobacco products to those 19 and older. It also would impose a 45 percent excise tax on wholesale sales of e-cigarette cartridges and liquid nicotine bottles.
The House Finance Committee, which Carlyle chairs, plans to vote Monday (June 8) on one of the vapor product regulation bills.
Rep. Paul Harris, R-Vancouver, said several House Republicans support the proposed tax, as well as raising the state’s smoking age. Both measures are part of a larger plan to regulate vapor product sales and packaging, he said.
“I don’t look at this as a taxation issue as much as I do a health issue,” said Harris, who has been working to build Republican support for the plan.
“All the reports say, is vaping better than smoking cigarettes? It is. Is it still a health hazard? Absolutely,” Harris said.
Harris estimated the proposed 45 percent tax would raise about $20 million during its first two years, after the effects of raising the smoking and vaping age are factored in. In about three or four years, though, the tax revenue would increase to about $120 million every two years, he estimated.
Earlier this year, Democratic Gov. Jay Inslee had proposed taxing electronic cigarettes and vapor products at a higher rate of 95 percent, which is the same tax rate imposed on other tobacco products in addition to cigarettes, which are taxed at a per-pack rate. Another proposal from Rep. Gerry Pollet, D-Seattle, had proposed a 60 percent excise tax on vapor products.
Pollet said he thinks a 45 percent tax rate is a compromise that will still help deter young people from buying the products, while generating enough revenue to fund enforcement of stricter rules for vapor shops and manufacturers. He estimated a 45 percent tax on wholesale sales should translate to about a 23 percent increase in the price of e-cigarette liquids and cartridges at retail shops.
“E-cigarettes will still be far cheaper than smoking regular cigarettes,” Pollet said, adding, “If you don’t raise the price a little bit, you just can’t reduce that youth market.”
The legislation also would require child-resistant packaging on liquid nicotine bottles and direct the Liquor Control Board to establish labeling rules regarding disclosure of a product’s ingredients and nicotine content, Pollet said.
Unlike previous proposals, the plan now under discussion would not ban flavored nicotine products, which critics said were designed to appeal mainly to children and teenagers. Nor would it tax vapor pens and other vapor smoking devices – instead, it would only tax the cartridges and liquids used inside them, Pollet said.
But the new plan would still prohibit online sales of liquid nicotine and other vapor products, which concerns some business owners. Mt. Baker Vapor, a Bellingham operation that does much of its business online, has announced it plans to move its operations to Mesa, Arizona, due to the proposals now in the Legislature.
“These bills are a clear existential threat to our business,” the business announced in a press release Tuesday. “While they have not yet been passed, we cannot continue effective operations with the constant threat they present hanging over our head.”
Joe Baba, chairman and founder of the Washington Vape Association, said the proposed 45 percent excise tax on e-liquids and e-cigarette cartridges is still excessive and will hurt many businesses in the state.
“It’s significant enough that it would put most of the vaping retailers out of business,” said Baba, who co-owns Vaporland, a vapor shop with locations in Everett, Marysville, Lake Stevens and Mount Vernon.
Baba said the tax also encourages people to keep smoking cigarettes — which he called a much more dangerous product — instead of using e-cigarettes as a means to help them quit.
While Baba said the vapor product industry largely supports requiring child-resistant packaging for nicotine liquids and banning sales to minors, Baba said he doesn’t agree with raising the state’s legal vaping and smoking age to 19.
“If my son can go to Iraq and risk his life and limbs to fight in a war, why would he be told he can’t vape?” Baba asked.
Attorney General Bob Ferguson previously proposed making 21 the legal age for buying tobacco and vapor products, but House members have amended Ferguson’s bill to make the proposed legal age 19.
Pollet said he hopes the vapor product tax package and regulatory measures will be voted off the House floor next week.
It’s unclear how the plan might fare in the Senate, though, which is controlled by Republicans who have resisted efforts to raise taxes this year.
Sen. Bruce Dammeier, a Puyallup Republican who introduced his own legislation this year to regulate e-liquid packaging and marketing, said he remains wary of tying those policy changes to a tax measure.
Dammeier said he still thinks “there are a lot of unknowns” about the health effects of e-cigarettes on adults, and that some of those questions should be answered before the state puts a new tax on the products.
“Whether this is a real tool for people to get off cigarettes, or a gateway tool to get people on cigarettes — that’s an important policy decision that needs to be resolved before you figure out how to treat taxation,” Dammeier said. “And to me, I haven’t seen that.”