Rhode Island Facing Potential 80% Tax For Second Year In A Row

Gov. Gina Raimondo made the same proposal last year, but luckily it was voted down

It’s nothing new for legislators to use vaping as a scapegoat when looking for more funding without raising voters taxes. We’ve seen it in states across the country, excessively high taxes on all vaping products sold there. While many of these taxes have done their intended job of creating more revenue, the sad reality is that hefty fees have lead to a massive increase in the number of vape shops forced to close their doors. So ultimately the revenue from new taxes will only decrease over time as more and more vapers opt to get their products online or out of state.

Rhode Island is just the latest state that is considering a substantial tax to generate more funds. In fact, it’s the second year in a row that Gov. Gina Raimondo has proposed an 80% tax on all vaping products sold in the state. She hopes that the new tax money will go a long way in fighting the states increasing budgetary concerns. But if it’s allowed to become law, it’s only a matter of time before the entire independent vaping industry in Rhode Island is unrecognizable.

The Potential 80% Tax

Back in March, the Rhode Island House Finance Committee was set to have a hearing about a potential 80% wholesale tax on vaping products sold in the state. That was until the meeting was postponed due to blizzard conditions. The move would change the state’s definition of “other tobacco products” to include vaporizers. It was the exact same proposal given by the Governor’s office last year. But since the postponement, not much has been reported about the potential ban. The good news is that means there’s still time to make your voice heard on the issue.

The Consumer Advocates for Smoke-Free Alternatives Association (CASAA) is urging vapers from around the country, but specifically, those who live in Rhode Island to give their thoughts and feelings to the state legislators. Others have come out against the potential ban including Jeff Stier, Senior Fellow at the Consumer Choice Center. In an open letter to the House Finance Committee, Mr. Stier made the case against the tax:

“This attempt to create additional tax revenue does not justify the negative ramifications it will have for your constituents. An excise tax on lower-risk alternatives to combustible cigarettes would make it harder for your constituents to quit smoking. But this 80% tax proposal is particularly unwise as it would guarantee an expansion of the black market, encourage consumers to purchase e-cigarettes out of state, while harming responsible businesses in your community.”

Vaping Taxes Elsewhere

Pennsylvania was the first state to test a significant tax on vaping. Back in 2016 state legislators voted to place a 40% wholesale tax on any vaping products sold in the commonwealth. Proposed as a potential source of millions of extra revenue dollars for their hotly contested budget, the bill was quickly passed into law. While the new tax had positive returns for the state at first, over $13 million over the first year, it also directly lead to over 100 vape shops going out of business. That accounts for over a quarter of the total number of shops, meaning that future returns from the tax will only continue to diminish.

Read more at https://www.churnmag.com


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