Nebraska business owner opposes proposed 40% vapor product tax increase

Nebraska's Revenue Committee meeting on February 28, 2025, highlighted significant concerns regarding proposed tax increases on vapor products, particularly the controversial LB 712, which seeks to quadruple the current wholesale tax from 10% to 40%. Business owners and industry advocates voiced strong opposition, arguing that such a steep increase would not only burden consumers but also drive them to seek cheaper alternatives across state lines, potentially harming local businesses.

Testimonies from local vape shop owners underscored the potential negative impact of the proposed tax hike. One owner, who operates multiple stores in Nebraska, emphasized that a 40% tax would effectively double the retail tax on vapor products compared to cigarettes, which he argued is disproportionate given the relative harm of vaping. He pointed out that studies indicate vapor products are significantly less harmful than traditional cigarettes and are effective smoking cessation tools. He urged lawmakers to consider a more balanced tax structure that would not discourage smokers from switching to less harmful alternatives.

Another business owner echoed these sentiments, advocating for a flat percentage tax on vapor products rather than the bifurcated system currently in place. He expressed willingness to collaborate with lawmakers to find a compromise that would ensure fair taxation while supporting public health goals.

Opponents of LB 712, including representatives from the Platt Institute and the Nebraska Petroleum Marketers and Convenience Store Association, argued that the proposed tax increase would lead to decreased sales and increased tax avoidance, as consumers might turn to black markets or cross state lines to purchase cheaper products. They highlighted that Nebraska's tax rates would become some of the highest in the region, potentially driving business away and harming the state's economy.

The committee's discussions also touched on the importance of regulating access to vapor products for minors, with several speakers advocating for responsible measures that do not penalize adult users who rely on these products for smoking cessation.

As the committee continues to deliberate on LB 712, the testimonies reflect a growing concern among business owners and health advocates about the implications of high taxation on vapor products, emphasizing the need for a balanced approach that considers both public health and economic viability. The outcome of this legislation could significantly impact Nebraska's vaping industry and the broader landscape of tobacco regulation in the state.