Lawmakers propose hefty tax on some e-cig products

Lawmakers propose hefty tax on e-cig products with nicotine
Updated: Feb. 7, 2017 at 6:01 PM HST
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HONOLULU (HawaiiNewsNow) - State lawmakers are exploring a measure that would implement a wholesale tax on Nicotine e-cigarettes and related products that would likely be passed on to retailers and consumers.

The Coalition for a Tobacco Free Hawaii say the tax will reduce e-cig use.

"Increasing taxes is really a proven and effective strategy when it comes to incentivizing users to quit," said Trish La Chica, the agency's policy director.

Initially, one of the measures featured a tax rate at 70 percent. House lawmakers later decided to erase the amount so that it could be debated and then determined at a later date.

"We don't know what it's going to end up as. We're strongly opposed to any taxes for our customers and the industry," said Scott Rasak of Volcano Fine Electronic Cigarettes.

The U.S. government defines e-cigarettes as tobacco products, but there isn't currently a state tobacco tax on them.

"Vapor products and tobacco products are completely different," Rasak said. "They don't contain tobacco. There's no smoke. These are entirely separate products."

Proponents of the tax say they want it applied to all components of e-cigs.

"The preferred approach is to tax electronic smoking devices, including components and parts, as defined federally by the Food and Drug Administration," La Chica said.

Rasak said that approach would drive prices for the devices much too high, hurting e-cig businesses and penalizing consumers.

"Some of these devices range up to $170 retail, and they're purchased somewhere around $90 wholesale," he said.

La Chica cites a 2015 survey that said one in four Hawaii high school students used e-cigs. State law sets the legal age for vaping at 21.

Recent studies found evidence that e-cigs serve as a gateway drug for adolescent users, who may not appreciate the dangers of tobacco and are thus more apt to experiment with the dangerous substance.

"We really want to do everything necessary so that we're protecting a new generation from being introduced to these products," she said.

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