If the FDA Doesn’t Kill the Vaping Industry, the Democrats’ Tax Hike Just Might
It’s been a rough couple of weeks for the vaping industry.
Last week, the Food and Drug Administration (FDA) let a deadline for authorizing vape products pass without having processed millions of pending applications—effectively making those products illegal to sell. Then on Monday, House Democrats unveiled a funding plan for their $3.5 trillion Build Back Better bill that would impose steep new excise taxes on nicotine-containing vaping liquid for the first time.
The hope is that new taxes on vaping products—alongside massive rate increases on traditional cigarettes—will bring in $96 billion in revenue while deterring people from using either.
But vape store owners, already suffering from the FDA’s regulatory onslaught, are wondering whether they’ll be able to survive the tax hike.
“This is going to more than double, and in some cases triple or quadruple, the price of liquids that I sell,” says Keith Gossett, the owner of Bucky’s Vape Shop in Columbus, Georgia.
Gossett’s most popular products are 60-milliliter bottles of vaping liquid, which come with various nicotine strengths. For a current cigarette smoker looking to transition to vaping, Gossett says he recommends liquids with 18 milligrams of nicotine per milliliter, which he sells for about $15.
Democrats’ tax bill would impose a $100.66 excise tax on every 1,810 milligrams of nicotine, adding approximately $60 in taxes to that 60-milliliter bottle of 18-milligram strength e-liquid. The bill is estimated to add about $1 to a pack of traditional, combustible cigarettes.
“I’m going to sit there and try to tell a man with a $6 pack of cigarettes that my [$75] product is better. This tax will close my shop,” Gossett tells Reason.
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