January 27th, 2015

Last updated on July 5th, 2018 at 11:10 pm

Legislation heading for the South Carolina legislature is set to make some serious changes to the way government’s tax e-liquids. Previously, e-liquids enjoyed a relatively affordable tax rate that was positioned near sales tax levels for other products and goods. However, this new legislative action will increase taxes on e-Cig Juice that contain nicotine up to the same rate as traditional cigarettes that contain the addictive substance.

Charlies Chalk Dust - Dream CreamThe bill (H. 4074), is sponsored by Representative Michael Pitts (R), and has up to this point only made it to the subcommittee floor. Pitt is sponsoring the bill based on the hypothesis that as e-cigarettes increase in popularity they should be taxed at an increasing rate. Traditional cigarettes are some of the highest taxed goods in the nation, and increasing e-cigarette e-liquid taxes up to the same level could seriously damage the industry on the whole, which could in fact be the plan for other sponsors of the bill down the road.

Of course, as with any other new legislative action that increases taxes, there are opponents to the bill. These opponents have quite a bit to say regarding the new action, most of which begins and ends with how e-liquid can actually assist people in quitting more harmful traditional cigarette smoking. Another claim being made by the bill’s opposition is that the bill is a collaborative effort by “Big-Tobacco” to take down the competition. Companies like R.J. Reynolds are having fingers pointed at them left and right, and are being called out for their lobbying efforts.

In fact, according to Bill Godshall who is the founder of Smokefree Pennsylvania, “(this) bill seek(s) to set the stage for banning or severely restricting Internet and mail order sales of vaping products.” This is obviously a very bold claim to make, one that is getting noticed by the big-tobacco companies.

But Why?

In reality, it is quite difficult to quantify the reasons why this legislation would pass. The tobacco industry is being forced to pay these high tax rates because of the health care costs that are so often a result of years of addiction to tobacco. It also is set forth to discourage people from smoking altogether as the price of cigarettes is so high. However, there are currently no known health risks associated with e-cigarettes, and making e-cigarettes more expensive wouldn’t assist people with quitting cigarettes so there really is no reason to increase their price.

Support for vapers

With all this in mind, many e-cigarette advocate committees like the CASAA are organizing to fight the H. 4074 bill and asking for support through their website as well. The group goes on to state that the tax on e-liquid in South Carolina will not only tax the liquid but also make it extremely inconvenient for consumers to purchase e-liquid from out of state without filing a tax return every month.

Regardless of whether the bill is passed or not will likely be determined by the support for the opposition. However, it’s important to realize the outcome of the bill will likely effect the nation’s state-wide tax requirements.