The State of Hawaii recently introduced bills in both houses of the legislature which would tax e-cigarettes at the same 70 percent tax on sales as are currently levied against tobacco cigarettes and other tobacco products.
The stated aims of both bills are to discourage sales to minors—but also it is suspected to bolster state revenues in some decline with the reduced rate of tobacco sales in the state. Such a prohibitive sales rate over 100 times the average sales tax in the continental U.S. states that levy the same on all goods and services, also discourages the use of e-cigarettes as a reduced risk alternative to smoking.
A columnist recently likened the situation to taxing Coca-Cola and Coffee at a hypothetical coffee based rate because both contain caffeine even though one, inarguably contains no coffee products. This is an excellent analogy. If the aim is to keep nicotine out of the hands of minors, the columnist rightly noted that the bills should be worded more narrowly to ban that substance, rather than to warp the definition of a “tobacco product” beyond all recognition.
One senses the hand of Big Tobacco and its powerful lobbies in these recent state level bans—that if they must be taxed at prohibitive rates, they want all alternative methods to smoking taxed similarly. Next it will be clove cigarettes—and even the candy varieties if such are still being made.
Petitions have been started to protest the Hawaiian bills and can be viewed at: