States trying, and failing, to tax e-cigarettes

E-cigarette use is on the rise in recent years, especially among teens in rural areas, prompting the U.S. Food and Drug Administration to propose rules to give it authority over e-cigarettes, an industry that accounts for about $2.5 billion in annual sales. While industry members and users claim e-cigarettes are healthier than cigarettes and actually help reduce smoking, state officials say e-cigarettes should be considered the same as tobacco and have tried—and mostly failed—to place taxes on e-cigarettes, Elaine Povich reports for Stateline. (Povich photo: A vape shop in Sunset, Utah)

Minnesota and North Carolina tax e-cigarettes, but last year 12 states—Delaware, Hawaii, Indiana, Kentucky, New Jersey, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Vermont and Washington—failed to pass proposed taxes on e-cigarettes, Povich writes. States such as Utah, Indiana, Washington and New Jersey are trying to tax e-cigarettes this year, while last week Michigan Gov. Rick Snyder "vetoed a package of bills designed to regulate and tax e-cigarettes, saying it wasn’t tough enough."

Utah Gov. Gary Herbert, a Republican, told Povich, “I feel strongly that we should tax electronic cigarettes similar to the way we tax other tobacco products. There are some who think these new products are not harmful, but just like traditional cigarettes, they contain nicotine and other toxic and addictive substances. Flavoring and marketing targeted to make these products enticing to youth is particularly concerning.”

Among adults, e-cigarette use rose from 3.3. percent in 2010 to 8.5 percent in 2013, and the number of cigarette smokers who used e-cigarettes increased from 9.8 percent to 36.5 percent, says the Centers for Disease Control and Prevention, Povich writes. More than 1.78 million—or 10 percent—of middle and high school students said they have tried e-cigarettes, according to a study from 2011-12 by the CDC. The Utah Department of Health said that 5.8 percent of teens and pre-teens said they used e-cigarettes last year.

The e-cigarette industry says it is being targeted with tougher standards than cigarettes and is rolling out people like Utah truck driver Brian Fisher—who claims e-cigarettes saved his life—to promote their cause, Povich writes. Fisher, who was diagnosed with lymphoma five years ago, told Povich, “I tried everything to get off cigarettes, and couldn’t do it. I found out about vaporizers, and they saved me, basically." (Read more)