The Fairhope City Council voted Sept. 22 to add vape‑related license classifications to the municipal business license code and to adopt a local excise tax on consumable vapor products, after staff and council members reduced the initially proposed rate following public comment.

City Finance staffer Jennifer Olmstead explained that the state recently enacted Act 2025‑377 (as referenced in the work session), which imposes a state tax on consumable vapor products and includes a population‑based redistribution of proceeds to counties and municipalities. Olmstead told council the city would receive a share of state collections based on population, but that municipalities that levy a local tax must have that tax in effect by Oct. 1, 2025 to preserve local taxing authority.

Why it matters: the council was presented with a narrow window to adopt a local tax that both preserves local authority and determines whether vendors in Fairhope will be subject to a local excise as well as the forthcoming state tax.

Olmstead proposed two ordinance changes: one to add two license classifications to Chapter 8, Section 22 of the business license code (a retailer classification for vape/tobacco/electronic smoking products and a merchant wholesaler classification) and a second to levy a local excise tax at a wholesale, per‑milliliter rate. After a public comment from Matthew Cancelino, a vape retailer who said the originally proposed 10¢ per milliliter rate would make typical retail bottles unaffordable for his business, councilmembers discussed lowering the city rate.

Public comment: Matthew Cancelino, owner of a Fairhope vape shop, told the council the draft 10¢ per milliliter tax could add roughly $12 to an $18 bottle in local taxes before the state rate takes effect next year. “...adding $12 tax on top. It's kind of outlandish,” Cancelino said.

Council action and outcome: Councilmember Demi (introducing) withdrew the initial introduction and reintroduced the excise ordinance with a revised rate of 4¢ per milliliter inside the city limits and 2¢ per milliliter in the police jurisdiction. The council voted to suspend the rules for immediate consideration and then gave final adoption to both the business‑classification ordinance and the excise tax ordinance on Sept. 22. The ordinances also establish license schedules (Schedule C for the retailer and Schedule E for the wholesaler) tied to gross receipts tiers.

Implementation and caveats: Olmstead said the state tax will take effect in October 2026; the city referendum/delivery deadline tied to local implementation is Oct. 1, 2025 (as described by staff), so the expedited schedule was necessary to preserve the city's authority to levy a local excise. Council and staff discussed that the local rate can be modified later if the council chooses.

Ending: With the vote, Fairhope now has an explicit business license classification for vapor product retailers and wholesalers and a local excise tax at 4¢ per milliliter (2¢ in the police jurisdiction); staff will implement licensing and collection procedures consistent with the new code language and the state law timeline.