E-Cigarette & Vaping Product Taxes

4/6/2020

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Vaping has taken the tobacco market by storm, and states are scrambling to adapt their taxes. Heading into 2019, only nine states and D.C. applied a tax to vaping products. By the end of the year that number had more than doubled. As of early April 2020, a total of 23 states and D.C. have enacted vaping taxes. 

States have taken different approaches to taxing these new products. Tax structures fall into the following three categories:

  • Percentage of price (12).
  • Flat rate per milliliter of e-liquid or per cartridge (8).
  • Combination of these approaches (4).

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 State E-Cigarette Tax

 No Tax

U.S interactive map

Hover a state to learn more about E-Cigarette Taxation.

Alabama

No tax.

Alaska

No tax.

Arizona

No tax.

Arkansas

No tax.

California

Tax Rate: 59.27% of wholesale cost.

Effective Date: April 1, 2017.

Colorado

No tax.

Connecticut

Tax Rate: $0.40/mL on liquid for prefilled, nonrefillable products; 10% of wholesale price for all other products.

Effective Date: Oct. 1, 2019.

 

Delaware

Tax Rate: $0.05/mL.

Effective Date: Jan. 1, 2018.

District of Columbia

Tax Rate: 91% of wholesale cost.

Effective Date: Oct. 1, 2019.

Florida

No tax.

Georgia

No tax.

Hawaii

No tax.

Idaho

No tax.

Illinois

Tax Rate: 15% of wholesale price.

Effective Date: July 1, 2019.

Indiana

No tax.

Iowa

No tax.

Kansas

Tax Rate: $0.05/mL.

Effective Date: July 1, 2017.

Kentucky

No tax.

Louisiana

Tax Rate: $0.05/mL.

Effective Date: July 1, 2013.

Maine

Tax Rate: 43% of wholesale price.

Effective Date: Jan. 2, 2020.

Maryland

No tax.

Massachusetts

Tax Rate: 75% of wholesale price.

Effective Date: June 1, 2020.

Michigan

No tax.

Minnesota

Tax Rate: 95% of wholesale price.

Effective Date: July 1, 2015.

Mississippi

No tax.

Missouri

No tax.

Montana

No tax.

Nebraska

No tax.

Nevada

Tax Rate: 30% of wholesale price.

Effective Date: Jan. 1, 2020.

New Hampshire

Tax Rate: $0.30/mL for closed cartridges; 8% of wholesale price for open system.

Effective Date: Jan. 1, 2020.

New Jersey

Tax Rate: $0.10/mL for prefilled, nonrefillable products; 10% of retail sale price on all other e-liquid containers.

Effective Date: Nov. 1, 2019.

New Mexico

Tax Rate: $0.50/cartridge that are prefilled, nonrefillable containing ≤5mL; 12.5% of wholesale cost on all other e-liquid containers.

Effective Date: July 1, 2019.

New York

Tax Rate: 20% special sales tax on retail price.

Effective Date: Dec. 1, 2019.

North Carolina

Tax Rate: $0.05/mL.

Effective Date: June 1, 2015.

North Dakota

No Tax.

Ohio

Tax Rate: $0.10/mL.

Effective Date: Oct. 1, 2019.

Oklahoma

No tax.

Oregon

No tax.

Pennsylvania

Tax Rate: 40% of wholesale price.

Effective Date: Oct. 1, 2016.

Rhode Island

No tax.

South Carolina

No tax.

South Dakota

No tax.

Tennessee

No tax.

Texas

No tax.

Utah

56% of wholesale price; July 1, 2020.

Vermont

Tax Rate: 92% of wholesale price.

Effective Date: July 1, 2019.

Virginia

No tax.

Washington

Tax Rate: $0.09 per mL on accessible products containing over 5 mL; $0.27 per mL for all other products containing e-liquid.

Effective Date: Oct. 1, 2019.

West Virginia

Tax Rate: $0.075/mL.

Effective Date: July 1, 2016.

Wisconsin

Tax Rate: $0.05/mL.

Effective Date: Oct. 1, 2019.

Wyoming

15% of wholesale price; if that tax is not paid, then it is 7.5% of the retail price; July 1, 2020.

 

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Five states and D.C. apply existing "other tobacco products" tax rates.

Revenues & Estimating

Because states tax these products differently, it’s important to look at states with comparable taxing structures when estimating revenues. According to NCSL’s 2019 State Tax Actions survey responses, state estimates for new vaping taxes for FY 2020 ranged from $1 million to $10 million in revenues. Revenues are likely to fluctuate in 2020. Recent federal law changes raised the minimum age for tobacco products to 21, which effectively shrinks the tax base. At the same time, e-cigarettes and vape products remain in the spotlight and may inspire other states to adopt new taxes on these products.

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