The new state budget sets a 40 percent tax on the wholesale price of e-cigarettes and vaping products, and that’s already on top of the six percent sales tax business owners already pay.
Inside this Cloud Jammer vape shop, a bottle of e-liquid, or ‘juice’ as some call it, can cost 12 to 16 dollars.
“They’ve got all sorts of flavors,” Tyler Ireland, a customer, said.
But prices could soon soar.
“There’s no way around it,” owner Dennis Brogan, said.
Lawmakers are trying to balance the state’s budget, so they jacked up the price of cigarettes by one dollar per pack. But the vaping industry said they got smoked.
“I’m going to have to cut back because I can’t afford 40 percent tax on a bottle that already costs 16 dollars,” Ireland said.
“Ya know people would be upset about a dollar. But they’re going to be really upset if they have to pay an extra eight dollars,” Brogan said.
House Bill 2342 would replace that tax with a 5 cent-per-milliliter retail tax on the vapor liquid only. Lawmakers said it would help more than 350 businesses across the state.
“I’m fortunate enough that we’ve been around long enough. We can afford it. It’s just I shouldn’t have to pay this. I mean this is money that I worked hard for to save up and to build my business and they’re like, ‘yeah we’ll take that now’,” Brogan said.
Smaller businesses have a tougher road to stay open. The owner of Eve Vape, an online shop in Harrisburg, already sees trouble ahead.
“I don’t see that it’s financially feasible for me to get a loanto start a vape store when I’m faced with such a huge tax,” owner Charles Huff, said.
Industry advocates said you can’t collect taxes if most vape shops close.
“They’re going to have those people, the employees, on unemployment. Plus you have empty storefronts all over the place. It’s not good. It’s not a good move,” Brogan said.
Brogan said he’s not going to raise his prices yet. He’s going to try and make up the difference himself.
Cigars will remain tax-free.