BURLINGTON, Vermont — With vaping on the rise among teenagers and adults alike, a 92% tax on e-cigarettes is set to go into effect Monday in Vermont.
Wholesale dealers and consumers must abide by rule changes around the 92% excise tax — a “Tobacco Products Tax” — starting July 1. The legislation, which expanded items that can be taxed, passed this year.
The state’s Department of Taxes clarifies who will be affected by the new legislation.
The legislation “expanded the existing definition of ‘other tobacco products.'” Items included in the legislation are provided on the department’s website.
- Vaping hoodies.
- Vaping liquid cartridges.
- Vaping liquid.
- “Repair parts that can only be used in vaping devices.”
Millions of teens are vaping: Here’s what they say about the growing trend
How does the e-cig tax affect consumers?
Consumers purchasing products named in the legislation will abide by taxes already in effect for “other tobacco products” — meaning they must pay a sales tax on top of the Tobacco Products Tax.
How does Vermont compare to other states?
Only a few other states and Washington, D.C., had excise/special tax laws in place on e-cigarettes as of March 15, according to the Public Health Law Center. These states were:
- New Jersey
- North Carolina
- West Virginia
Parents, know this:: Here are 5 types of e-cigarettes your teen might be hiding
How does the tax affect dealers?
Licensed wholesale dealers must pay on a monthly basis and file a Tobacco Product Tax Form (“even when no tax is due”) no later than 15 days after a month concludes.
Wholesale dealers must collect and remit tax on items “imported, manufactured, furnished, sold, shipped, or delivered by them to retailers on or after July 1, 2019.”
Individuals who also have a retail dealer license and sell products need to determine the tax for the wholesale cost “when they acquired the products at wholesale.”
Retail dealers do not need to worry about the tax on “pre-existing inventory, and they may still sell that inventory at retail.” Keep in mind that you’ll need to keep invoices for three years to prove what you received without the tax was done so at wholesale before July 2019.
Retailers need to source other tobacco products from wholesale dealers starting Monday. If the tax is not paid by the wholesale dealer (which will be indicated on the dealer’s invoice), it falls on the retailer.
Banning e-cig sales:: San Francisco approves historic ban, first of any major US city
Contact Maleeha Syed on Twitter: @MaleehaSyed89