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Calera council weighs local vape tax, weighing option to collect revenue locally rather than rely on state distribution
Summary
At a work session and first reading, council members heard staff outline a state 10¢/ml vape tax and discussed adopting a local tax to retain all proceeds; attorneys will review legal risks before final action.
Calera’s City Council held a first reading of an ordinance that would impose a local tax on consumable vape products, with council members debating whether to adopt their own tax or accept a state-administered levy.
Kelly, who led the presentation, said the state has enacted a 10¢ per milliliter tax that will be collected centrally and split among the state, cities and counties. “They’re going to collect the money, take something off the top,” Kelly said, noting the state plan would allocate 50% to the state general fund, 25% to cities and 25% to counties. Kelly outlined an alternative: a locally administered tax that would allow Calera to collect the full amount and handle remittance and reporting directly. “If we do our own we just have to determine the amount,” Kelly said, but she warned a locally set rate may be difficult to change later and could face legal challenges.
Council members asked whether the city could set a rate higher than 10¢; Kelly said jurisdictions have broad latitude but cautioned there is litigation risk and referenced prior local challenges to high fees. She also described two classes of state licenses that will limit which retailers may sell certain products and the exemption for resale: “It exempts you if it’s for resale… the tax is meant to be on the end user.”
City staff said Lincoln has already adopted a 10¢ per milliliter ordinance and that, if Calera adopts its own tax, staff could implement online filing and collection. Supporters of a local tax told the council it would give Calera direct revenue and clearer sales data; skeptics stressed the difficulty of estimating revenue and urged caution until the city attorney reviews statutory language.
The ordinance was given a first reading; Kelly and others recommended the council defer final action until the city attorney provides legal guidance on enforceability and risk.
Next steps: the council will request input from the city attorney and revisit the ordinance at a future meeting before a possible second reading and vote.
