New England states tax vapor products

A new tax on electronic smoking devices and liquids used in these devices, whether or not they contain nicotine, goes into effect today in the State of Maine. The law, known as An Act To Prevent and Reduce Tobacco Use with Adequate Funding and by Equalizing the Taxes on Tobacco Products and To Improve Public Health, was approved by the state legislature and signed by the Governor last July.

The law extends the tax on tobacco products other than cigarettes to electronic smoking devices and liquids. The current tax on other tobacco products is 43% of the wholesale price. If in the future the State raises the tax on cigarettes, the state tax assessor shall calculate a revised rate of tax for OTP to reflect the percentage change in the rate levied on cigarettes.  

Vapers in neighboring New Hampshire also saw a new excise tax on liquids used in electronic cigarettes go into effect on 1 January 2020. As in Maine, the new law also classifies electronic cigarettes with other tobacco products but does not apply the standard OTP tax of 65% of the wholesale price.

Instead, a two-tiered tax has been created. For closed cartridges or containers of liquid or other substances containing nicotine that are not intended to be opened, a tax of $0.30 per milliliter is levied on the volume of the liquid or other substance in the cartridge or container; and for open systems containers of liquid or other substances containing nicotine a tax of 8 percent will apply to the wholesale sales price. This split tax structure reflects growing pressure to restrict the sale of closed, disposable products such as Juul or Vuse which tobacco control advocates deem to be particularly popular with young people. Similar dual structures have previously been adopted in several other states.