Senate Committee Approves Change in Taxation of Vapor Products

HARRISBURG – The Senate Finance Committee approved a bill today that would change the way Pennsylvania taxes e-cigarette products to help prevent more vapor shops from going out of business, according to the bill’s sponsor, Senator Camera Bartolotta (R-46).

As part of budget negotiations last year, the General Assembly created a new 40 percent wholesale tax on all vapor products sold in Pennsylvania. The burden created by this tax caused more than 100 vapor product businesses to close, resulting in the loss of several hundred jobs in the industry.

Bartolotta’s bill would eliminate the 40 percent wholesale tax and replace it with a 5-cents per milliliter retail tax on e-liquid. This approach to taxation is consistent with levies imposed in other states and would help generate predictable revenues for the state without threatening the viability of existing vapor shops, Bartolotta said.

“We’ve already seen too many people lose their businesses and livelihoods because of the way this tax was enacted, and many more vapor businesses are teetering on the brink of failure due to the new tax burden,” Bartolotta said. “The state won’t see any benefit at all from this tax if shops continue to fail. We need to create a tax system that is predictable and sustainable in the current economic climate.”

Recent studies have suggested that the use of vapor products carries fewer health risks than the use of cigarettes. Other research suggests that e-cigarettes can be a useful aid for individuals who want to quit smoking.

“Fixing the problems with the current tax will not only help improve the financial health of small businesses and the Commonwealth, but also holds the promise of improving the physical health of Pennsylvanians,” Bartolotta said. 

CONTACT: Colleen Greer (717) 787-1463


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