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Vapor Taxes by State, 2022

Today’s map looks at the design of excise taxes for vaping and tobacco alternatives, which is important in the pursuit of harm reduction from smoking. Higher vapor taxes on products such as E-cigarettes could encourage vapors to go back to smoking cigarettes and will discourage cigarette smokers from switching to vaping products.  Since vaping entered […]

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State Tax Changes Taking Effect July 1, 2022

Although the majority of 2022 state tax changes take effect at the start of the calendar year, some are implemented at the beginning of the fiscal year. Individual and corporate income tax changes usually take effect at the beginning of the calendar year to maintain policy consistency throughout the tax year, but sales and excise […]

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Proposal to Raise Vapor Taxes in Washington State Gets Base and Rate Wrong

Just like last year, Washington lawmakers will consider a bill (HB 1676) which would change the vapor tax base and increase the tax rate on vapor products. Both these changes would be steps in the wrong direction, as they would negatively impact smokers’ decision to switch from more harmful combustible products to harm-reducing vapor products. […]

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Poor Tax Design in Alaska Vapor Tax Proposal

A proposal to introduce a wholesale tax on vapor products in Alaska could make switching from combustible tobacco products very expensive for smokers. If enacted, HB 110 (SB 45) would, among other things, impose a 75 percent wholesale tax on nicotine vapor products (including components)—a rate comparable to the rate on other tobacco products and […]

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Should Tax Policy Play a Role in Tobacco Harm Reduction?

Following the release of the House Democrats’ proposed Build Back Better Act, federal tobacco and nicotine taxation has been a hot topic in the United States. In an effort to raise roughly $100 billion, the House proposal would double cigarette taxes and increase all other tobacco and nicotine taxes to comparable rates—a strategy with severe […]

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How High Are Vapor Taxes in Your State?

Several states are considering introducing or increasing taxes on vapor products to make up declining tax revenue from traditional tobacco products or to fill budget holes in the wake of the coronavirus pandemic. However, lawmakers should approach the issue carefully because flawed excise tax design on vapor products could drive consumers back to more harmful […]

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Excise Tax Application and Trends

Table of Contents Key Points: In 2019, excise taxes accounted for less than 3 percent of total federal tax collections while state excise taxes on tobacco, alcohol, and motor fuel accounted for about 7 percent of total state tax revenue Taxes levied on a transaction or good that creates a negative externality or additional costs […]

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Smoking High Excise Taxes on Vapor Products Could Be Coming to West Virginia

West Virginians would face extraordinarily high taxes on vapor products in state if Senate Bill 68 becomes law. The bill, sponsored by Sen. Ron Stollings (D) and Sen. Richard Lindsay (D), would increase taxes on liquid used in vapor products from 7.5 cents per milliliter (ml) to $1 per ml—an increase of over 1,300 percent. […]

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Join Us for a Free “State Tax Policy Boot Camp”

We’re about to launch a free six-week course in state taxation, and we’d like you to join us. This coming Tuesday, February 16th, the Tax Foundation will kick off its “State Tax Policy Boot Camp,” designed with lawmakers and legislative staff in mind, but ideal for anyone interested in gaining a better understanding of state […]

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Washington State Lawmakers Considering New Bans and Higher Taxes on Nicotine Products

Washington lawmakers have proposed a bill (SB5266) that would make it the second state to ban all flavored tobacco and the first to impose a nicotine cap on vapor products, and would increase taxes on vapor to among the highest in the nation. The excise tax on vapor products will, if enacted, be levied at […]