Vape Shop Owners May Be Forced To Close Over Massive Tax Increase
Vaping industry is in fear for their future after Kentucky continues push to tax vaping more heavily
Vaping has been under a constant legislative onslaught in the United States, facing a series of prohibitive policies and other regulations that effectively place a stranglehold on the domestic industry. As the landscape surrounding the vaping industry continues to shift, vape shop owners are scrambling to navigate the new economic and regulatory climate.
The Kentucky House of Representatives passed a bill that would subject vaping products to the states wholesale tobacco tax, as well as increase that tax rate from 15% up to 25%. The bill is now set to go before the Senate for a final vote.
The bill’s sponsors have stated the goal of the bill is to prevent youth access to vaping and make it more difficult for people to purchase products that may impact their health. The sponsors estimate the bill is projected to raise $50 million over the next two years but failed to clarify how the state would meet that revenue projection when the stated intention of the bill is to curb purchasing of the products being taxed.
Public health scholars and harm reduction experts have long decried flavor bans, stating that the net losses to public health by forcing smokers toward the black market or even back to tobacco outweigh any perceived potential benefits. Members of the vaping industry within the state fear for their future, as this measure directly impacts their livelihood alongside a wave of other regulations targeting the industry.
Taxation Without Representation
The Kentucky House of Representatives recently passed House Bill 32, a measure that would subject vapor products to the state’s wholesale tax on “other tobacco products.” The bill would also increase that tax rate, up from 15% to 25%.
Rep. Jerry Miller, sponsor of the bill, has stated that its goal is to make it more expensive for people to purchase products that are harmful to their health. Some critics have argued that this is an effective tax on lower-income Kentuckians, who tend to rely more heavily on nicotine products.
Members of the state’s vaping industry are in fear for the future, as the proposed tax increase is expected to make razor-thin margins even thinner and eventually kill sales. “How are they gonna have any revenue when they have killed the sale? They’re gonna get less money from me, not more. If I have zero sales 25% of zero is zero. The government is bad at math,” said Ginny Saville, owner of a Lexington vape shop.
The industry has attempted to push back against the legislation, although to little avail thus far. “The bottom line is, the people here are Mom and Pop stores that are truly here to try and help people. We’re not here to try and addict a new generation,” Troy LeBlanc, a Louisville vape shop owner, told a House committee during a hearing in February. “We’re here to help people quit smoking.”
With perpetual fear-mongering by politicians and the media, it’s no wonder why the public perception surrounding vaping is skewed so negatively. Despite the propagation of outrights myths, vaping has been repeatedly demonstrated as an effective smoking cessation device and reduced harm alternative to tobacco.
Not only has vaping been demonstrated as an effective smoking cessation aid, but it could also be the single most effective tool currently at our disposal. For example, a study from the University of Louisville found that vaping is the most effective form of smoking cessation, more than quitting cold-turkey, or even prescription options.
Time and time again, vaping has also been demonstrated as a reduced-harm alternative to tobacco. One such example is landmark research conducted by Public Health England that found that vaping is 95% safer than smoking.
Despite the evidence highlighting the benefits of vaping, there is evidence showing the constant onslaught of fear-mongering press may have tainted the public perception of vaping. A survey conducted by Action on Smoking and Health found that only 13% of adults surveyed believe that vaping is safer than smoking, with a staggering 26% believing it’s just as bad, if not worse.
The passage of House Bill 32 may signal the beginning of the end for the Kentucky vaping industry. The bill’s massive over-taxation effectively kills margins and sales for small mom and pop vape shops throughout the state, which may, in turn, cost Kentucky thousands of jobs and millions in lost tax revenue.
The tax increase may also disproportionately impact vulnerable lower-income Kentuckians, who tend to rely more heavily on nicotine products than other demographics. A group that needs the most support is being targeted by lawmakers in the name of political theatre and grandstanding.
Vapers and vape shop owners throughout the state must stand in solidarity to push back against this gross over-taxation. Complacency and a lack of civic action will only lead to a slow death for retail outlets throughout the state.
What are your thoughts regarding the over-taxation of the Kentucky vapor industry? How do you believe this tax increase will impact mom and pop vape shops moving forward? We would love to hear from you in the comments below, be sure to like us on Facebook and follow us on Twitter to receive all the latest vaping news!
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