Published on February 6th, 2017 | by Jimmy Hafrey
Ohio is looking to follow in the footsteps of Pennsylvania: Governor John Kasich is hoping to tax vape products at 69 percent.
WKBN is reporting that the new proposed budget for Ohio would tax all vape products, including mods and accessories, at 69 percent. This is a 52 percent increase in the current tax for vape products. This tax increase is expected to bring over $100 million to the state’s coffers, should the tax make it into the budget.
However, the tax increase may end up costing Ohio small business jobs, like jobs provided by The House of Vape in Beaver Township, Ohio. Because the tax would increase the price for vape products, consumers may look elsewhere for their vape needs. The House of Vape manager Michelle Pingley said that: “We would eventually, over time, probably have to close our doors because people are not willing to pay that price for the product.”
My Dayton Daily News is reporting that the American Vaping Association has come out with a statement that criticized the proposed tax increase, saying that: “balancing the budget on the backs of smokers looking to quit is not just bad tax policy; it is also bad public health policy.”
This criticism is in sharp contrast of the American Lung Association, which has held onto the belief that raising the prices on all tobacco products, which is what vaping products are categorized as by federal law, will close the gap in revenue that many states are facing. It is also thought that by raising the taxes on tobacco products, including vaping products, will discourage smokers from the habit.
In fact, Cleveland.com is reporting that a joint statement has been released by the American Cancer Society Cancer Action Network, American Heart Association, American Lung Association, Campaign for Tobacco-Free Kids and the March of Dimes. Together, the groups claim that the proposed Ohio increase isn’t doing nearly enough, stating that:
“Making tobacco significantly more expensive is proven to reduce use and thereby reduce the number of tobacco-related deaths…there is no doubt that tax increases on all tobacco products would generate additional revenue, but more importantly, they will discourage tobacco use, especially among our youth.”
However, by increasing taxes on vape products, the opposite is true: the state is making it more difficult for smokers to use vaping as a smoking cessation method when the prices are too high. Additionally, when the prices increase for vape products, few consumers will buy them. In an industry that is buoyed by small businesses, this leads to business closures, which will in turn negatively impact the state’s revenue in any given fiscal year.
Gregory Conley, the current president of the American Vaping Association, drew correlations to this effect, using Pennsylvania as an example. When that state increased its vape taxes 40 percent, one-third of all of its vape businesses either went out of business or moved across state lines to avoid the tax.
If previous tax increases across the country are any indication of what Ohio can be expecting, then it seems logical that small business closures and a loss of revenue are imminent for the state. There have been calls to amend this proposed tax increase, however, and so this publication will continue to update readers on any changes in the Ohio fight for vaping taxation.