If Governor Jay Inslee gets his way, electronic cigarette smokers will soon be helping to fill the state budget gap. He wants to impose a 95% tax on any and all vapor products.
The tax hike was one of several the governor outlined in his budget plan, announced on Thursday.
Instantly, it was met with criticism from the American Vaping Association, as well as Washington-based vapor shops.
“A 95% tax would do a few different things,” said Kim Thompson, who owns The Vaporium in Fife. “One, it would demonize a product, make it look as though it was as bad as smoking. The other thing is that it would make vaping and traditional cigarettes more similar in pricing. It would give us less incentive to the smoke to say, hey, give this a try.”
Thompson says the proposal would make all vapor products more expensive, shrinking her profit margin and potentially driving customers back to traditional tobacco cigarettes.
“Taxing small businesses out of businesses is bad business,” she said.
Representative Reuven Carlyle, who proposed a similar vapor tax last year that was not approved, supports Inslee’s proposal.
“Last year, we introduced legislation to bring vaping up to the regular level of other similar products such as snuff and other things,” he said. “This is just a fairness issue. It’s a parity issue. No one is looking to single out vaping, we are just looking to bring it to the same level of taxation of other similar products.”
Those similar products include snuff and some cigars, which are both taxed at 95% under the state’s current tobacco products tax.
The difference, Thompson says, is obvious.
“There’s zero tobacco in my product,” she said. “Zero tobacco. We do not promote tobacco, we do not promote smoking, or anything that has cancer causing ingredients.”
“It really is very important to keep in mind that this is a product that has an active ingredient of nicotine, that is addictive,” he said.
The American Vaping Association says there are only two other states that currently tax vapor products, North Carolina and Minnesota. Both of those states only tax vapor products that contain nicotine. The American Vaping Association says Inslee’s proposal would do that, in addition to nearly doubling the price of nicotine-free vapor products.
“We will be encouraging all of our customers to call Jay Inslee and let him know how they feel,” said Thompson. “They are ready to rally and to converge in Olympia.”
Last year, it is a battle the vaping industry won. Carlyle’s proposal did not make it out of committee.
Thompson says lawmakers should be prepared for another battle come January.