Published on December 28th, 2016 | by Jimmy Hafrey
The Pennsylvania tax law that hit the vaping industry hard this past summer is being challenged in court by a vape business, and it looks like this could be the end of the onerous legislation.
CPBJ is reporting that the Oesterling family, which owns Kingdom Vapor Inc and Smoke 4 Less LLC, filed a petition in Commonwealth Court against the Pennsylvania tax law. The petition, which is known as a declaratory judgment, names the state’s Department of Revenue as the Defendant.
The Oesterling family’s companies are both based in Clarion, Pennsylvania, and would be subject to the next tax law that went into effect earlier this year. The tax law states that all vaping products, including vape accessories, would be taxed at 40 percent and includes all products in a company’s inventory, not just what they sell.
This law has already seen over 70 vape stores across the state close when the first part of the act was enacted at the beginning of the fall. It will also generally be held responsible for the estimated 90 percent of remaining stores that will close before the December 31 tax deadline.
The Oesterling family has challenged the new law, stating in their petition that only vape mods and the e-liquids that are used in conjunction with them ought to be subject to the new law. All other accessories, such as coils, batteries, and chargers, should be left out of the tax law because they do not contain nor deliver tobacco.
The tax law has been a source of frustration for many in the vaping community. Most vape shop owners see it as a way to close down the vape industry in the state, which will, in turn, close off any source of revenue that the state wrongly believes it will receive from the tax law.
The Department of Revenue had this to say about the pending lawsuit when it was revealed earlier today:
“The department has not seen the complaint and it is our longstanding policy not to discuss the specifics of pending litigation. Under the Tobacco Products tax enacted last summer to fund the bipartisan budget, tax was imposed on e-cigarettes which are defined under the statute as an electronic oral device, including ones composed of heating elements, batteries or electronic circuits used to inhale vapor to simulate smoking, including liquid or substances sold for use in e-cigarettes.”
Should the lawsuit go forward, there’s hope that a new conversation into the tax law might yield a tax compromise, one that will help the state without destroying part of the economy in a state that needs the economy to grow and can balance the vaping tax issue across the country.
At the time of this writing, however, the State has yet to issue a response to the petition. The Department of Revenue has 20 days to file a response; if it fails to respond, the Oesterling family can still request a hearing.
We will keep you updated on this lawsuit.