E-Cig Sales Tax

Merchants Leery of E-Cig Sales Tax

The FDA is set to start cohesive regulations for the e-cig industry. Beginning in August, e-cig retailers will be prohibited from selling tobacco products to individuals under 18, distributing free samples, or selling them in vending machines. Most states ban the sale of e-cigarettes to minors. Currently, only two states impose taxes on e-cigarettes or vaping products.

While many in the e-cig industry welcome regulation, some retailers argue against taxation as they will discourage users from choosing e-cigs as opposed to cigarettes. E-cigs are battery-powered devices that alter nicotine-induced liquid into a flavored, inhalable vapor. The vapor does not contain the tars and chemicals of traditional tobacco, which many claim make it a healthier alternative to combustiblecigarettes. However, e-cigs have not been extensively studied and no one knows the exact advantages to vaping as opposed to smoking.

Many states like North Carolina tax a percentage per liquid milliliter of liquid nicotine to generate income. However, this type of taxation is not welcome in all states. In 2014, 12 states defeated these tax proposals. But regulation of e-cigs doesn’t have to lead to taxation. In 2014,Missouri adopted laws to prohibit the sale of e-cigs to minors, and also prohibited the taxation of e-cigs the same as regular tobacco products.

Now the FDA has stated that before electronic cigarettes brands are allowed can stay in the market, regulators will be sent toinspect the flavor, design, and contents of devices. Secretary Sylvia Burwell of Health and Human Services, believes that e-cigs could be a threat to the progress America has made toward a tobacco-free generation.

Additional rules issued by the Food and Drug Administration would also extend the restrictions currently on traditional cigarettes to a host of related products including:pipe tobacco, e-cigarettes, hookahs, and nicotine gels.

The e-cig industry is growing, and may be under-going oversight by the FDA. However, regulation does not mean the end of profits for merchants. Many e-cig industry leaders believe regulation will legitimize the e-cig industry, which will generate interest amongst investors. eMerchantBroker.com is the number one online payment processor that will set up and manage your electronic cigarette merchant account. Learn how an electronic cigarette merchant account can increase your profits and customer base here.

  • Partner links