The Disposable Electronic Cigarette Could Soon Be Taxed

With new legislation on the horizon, disposable electronic cigarette companies prepare for taxation.

The booming disposable electronic cigarette market is beginning to come under scrutiny by the federal government. Many states have begun considering bills to tax electronic cigarettes and ban their sale to minors. At the same time, the U.S. Food and Drug Administration is working on a plan for federal regulations of electronic cigarettes that will encompass all of the state legislation. Read this article to get a detailed breakdown of electronic cigarette legislation in each state.

e-cigarette manufacturers, the number of brands on the market, and the increasing consumer demand for electronic cigarettes, state lawmakers have also begun to consider bills to tax e-cigarettes and prevent the sale of the products to underage youth. All of this state legislation is being considered within a potential federal regulatory framework to regulate electronic cigarettes that the U.S. Food and Drug Administration should announce in the near future.

E-Cigarette Tax Bills

So far, Minnesota is the only state that taxes e-cigarettes and assesses the current 70% tobacco products tax on just the wholesale cost of the nicotine cartridges in a starter kit, while applying the tax rate to the entire wholesale cost of a disposable e-cigarette. However, the Minnesota legislature just passed a tax bill raising the OTP tax rate to 95%, and with the Minnesota Governor likely to sign the bill into law, the 95% rate would be applied to the cost of an e-cigarette kit’s nicotine cartridges and also the full wholesale cost of a disposable e-cigarette beginning July 1st. Click this link to finish reading States and E-Cigarette Legislation.

The only state to actually begin taxing electronic cigarettes has been Minnesota. In Minnesota, the nicotine cartridges for electronic cigarettes are taxed at the same 70-percent taxation rate that tobacco products are subject to. Many states have already been successful in banning electronic cigarette sales to minors, including Alabama, Indiana and Mississippi.

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