Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Vaping Tax topic
No spam. Unsubscribe anytime.
Tax panel approves vape-product tax after sponsor backs 20% amendment to target youth use
Summary
The House Taxation Committee on Dec. 5 advanced a bill to tax vaping products after the sponsor supported a compromise amendment reducing the wholesale tax from 50% to 20%. Proponents and small-business owners supported the lower rate; public-health groups pressed to keep taxes high to reduce youth uptake.
Representative Mary Caffaro opened testimony on House Bill 910, saying the bill’s goal is to reduce youth use by making vape products more expensive. “The goal of this bill is to make vape products unaffordable for kids,” she said during the introduction.
Caffaro’s original draft would have imposed a 50% wholesale tax on many electronic nicotine-delivery products. Early testimony showed a split: public-health advocates such as Carrie Neeson of the American Lung Association said taxation is “one of the pillars of good prevention policies,” while industry and retail witnesses warned a high levy could damage small businesses and shift markets in unintended ways. Charles Denow, representing Philip Morris International, urged caution for nicotine-pouch products recently authorized by the FDA.
Small retail owners and operators of vape shops repeatedly pressed for a lower wholesale rate and supported an amendment to reduce the rate to 20% of wholesale. Tom Jacobson, who said he represents numerous Montana shop owners, told the committee that a 20% tax is a “measured balance” that protects retailers while addressing youth access. Several small-business witnesses — including owners of Juice City Vapor and Liberty Vapor — repeated that 20% would be workable.
Department of Revenue staff described the administrative work that would follow enactment, including new returns and likely increased enforcement resources.
Committee members pressed on scope and implementation details — including whether THC products would be included (staff noted definitions differ between the bill and the proposed amendment and asked the committee to clarify during executive action) — and asked about the estimated revenue impact; the sponsor and witnesses referenced other states’ experiences and an earlier revenue estimate in the bill and amendments.
In executive action the committee adopted the amendment reducing the wholesale tax to 20%, and then passed HB 910 as amended by a recorded committee vote of 17–4. The bill now advances to the full House for floor consideration, where fiscal and definitional issues will remain available for debate.
