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Senate of Pennsylvania
Session of 2015 - 2016 Regular Session


Posted: September 15, 2016 11:04 AM
From: Senator Camera Bartolotta
To: All Senate members
Subject: Replacement of E-Cigarette “Floor Tax”
In the near future, I will introduce legislation to eliminate the “floor tax” on electronic cigarettes (e-cigarettes) and vaping products that was included in the 2016-17 State Budget. As an alternative, my proposal will establish a 5 cents per milliliter tax, an approach consistent with taxes enacted on these products by other states. A similar proposal, House Bill 2342, has been introduced by Representative Jeff Wheeland.

The current “floor tax” is a 40 percent tax on existing inventory which, in effect, applies retroactively to the suppliers of these products. Imagine the financial burden any retailer would have if they were unexpectedly assessed a tax of this size on their existing inventory. There are approximately 300 retailers of these products in Pennsylvania and a number of them in the 46th Senatorial District have shared with me the impact of this punitive tax and the potential for many of them to close. Not only will this reduce the anticipated revenue associated with the floor tax, it will also result in small business job loss and less business-related revenue for the state.

While health experts concur that completely quitting cigarettes is the healthiest option, they also agree that switching to e-cigarettes is a healthier alternative and less harmful than traditional smoking. Likewise, the Royal College of Physicians recently conducted a study which found that e-cigarettes appear to be effective when used by smokers as an “aid to quitting smoking”.

For these reasons, I ask you to join me in co-sponsoring this legislation to replace the 40 percent floor tax with a 5 cents per milliliter tax that will protect small business owners but also generate income for the state moving forward.

Introduced as SB1373