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Vapers Beware:  The Tax Man Cometh!

Ahhh … the tax man.  He cometh and he taketh in every aspect, spectrum of our lives. And that includes the electronic cigarette industry. With an annual revenue over $1.5 billion, this largely unregulated industry has come under the watchful eye of the government.

Perhaps because big brother doesn’t like anyone having a financial success and not get part of it?  Or could be it because the government division called the FDA classified them as a tobacco product in 2014? Or maybe it is a mixture of the two?

Electronic cigarettes are not a traditional form of tobacco, but there is nicotine in those devices. And it is that nicotine that gave the FDA the push through strong opposition to seek regulation of that industry in 2014. It gave them the footing to have them considered a tobacco product, thus making them something for regulation by Congress by way of the Tobacco Tax Equity Act.

A bill was passed that enabled the government to tax electronic cigarettes along with other tobacco products such as chewing tobacco and loose-leaf tobacco. The government determined that there was quite a bit of lost revenue in this industry or them, and this allows them to get a piece of that pie, so to speak.

But they also presented it as dissuade Americans from smoking – hitting our desire to be healthier. Many government officials that pushed for this bill believe that electronic cigarettes are a determent to the public’s health. They also didn’t want tobacco companies selling tobacco products in the wrong classification of cigars or pipe tobacco either, which have a lower tax rate compared to that of traditional cigarettes and loose-leaf tobacco.

A Classification Dispute

The electronic cigarette industry strongly argues and disputes the government’s classification of their product being a tobacco product. Electronic cigarette proponents promote these devices as being a safe alternative compared to regular tobacco and are in a disagreement with the government that they do not pose a similar danger as traditional cigarette to do the public.

The Opposition Side Is Strong – But Which Side Is Stronger?

The only thing the electronic cigarette industry can do to oppose the bill is to lobby Congress and display public protests.  And while the taxation of this product is unwelcome news for the industry, it could be worse if some politicians get their way, such as banning online sales and banning e-juice flavors, which is why traditional cigarettes are only available in regular or menthol flavors now – a similar ban in having various flavors for the traditional smokes. Advocates for the electronic cigarette industry stress that a ban of such nature is not supported by any evidence or facts.

The EPA and medical journals have stated that the liquids and juices used by electronic cigarettes do not contain any carcinogens. Stopping at banning electronic cigarettes altogether, the government has implemented onerous taxes on electronic cigarette consumers, which is frustrating enough for the industry as well as the consumers, as if they are paying enough taxes as it is already.


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