• Sean Mills

Hide Your Vapes, Hide Your Juice, They’re Taxing Everybody Out Here.

If we don’t take action, expect vaping prices to increase next year. The White House proposed adding a “user fee" to your devices and liquids.   The justification used to charge this fee is to “tackle the epidemic of youth e-cigarette use.”  The term “user fee” appears in quotes above because that’s not what this is.  It is a tax.  The difference is that taxes, however, evoke a certain pushback from voters that legislators and executives don’t hear when they’re called fees. The 2020 federal budget proposes collecting $100 million from manufacturers and importers of vapor products via added fees to physical products as well as pre-market applications going forward.  These funds are not given a specific use, nor has FDA said how more funding will help them in their goal.

These fees are described vaguely on page 51 of the linked budget:

Tackles the Epidemic of Youth E-Cigarette Use. The Budget includes a new user fee on e-cigarettes and other electronic nicotine delivery system products and proposes new FDA authority to collect user fees in support of its regulatory oversight of new tobacco and nicotine related products in the future as appropriate. The proposal would amend current law to add e-cigarette manufacturers and importers to a list of product categories subject to the user fee.  The FDA’s annual user fee cap of $712 million would be increased by $100 million and future collections of all tobacco related products would be indexed to inflation. This proposal would ensure that FDA has the resources to address  today’s alarming rise in youth e-cigarette use as well as new public health threats of tomorrow. New tobacco or nicotine products that are regulated by FDA should also pay a user fee, just as other tobacco-related products that are subject to FDA’s user fee.

Because importers and manufacturers will face increased costs industry-wide, prices at the register will also increase.  How much will prices increase?  That’s the $100 million dollar question.  In 2018, e-cigarette sales totaled $3.6 billion   The revenue FDA expects to collect total to near 3% of total retail sales.  This represents a far higher cost to the manufacturers and importers paying the fees. Wholesale purchases are less than retail dollars, so it hits them much harder.  Since the fees are paid early in the supply chain, costs are passed along at each stage before your purchase as a consumer and will amount to far more than the 3% above. Let me be clear that preventing youth access is an honorable goal.  However, just stating there is a goal and that FDA wants funds to do it is so vague as to be meaningless, and at potentially high costs to you. I implore you to call your senators and representatives in Congress.  Write email if you must, but calls really matter.  Tell them that it is unjust to tax the people without at least a plan for the funds. Any editorial is solely the opinion of the writer, and does not reflect the positions or opinions of Charlotte Vapes or its affiliates.  The writer can be reached at sean@charlottevapes.com for any clarifications, comments, complaints, or concerns. 

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