Connecticut

Background: In his first year as Governor, Ned Lamont submitted a budget proposal to the General Assembly calling for several new taxes designed to reduce the state’s growing general fund deficit. The original proposal submitted in February 2019 contained a 75% tax on electronic cigarette products but this idea was ultimately rejected.

The final budget approved by the State Legislature (see Section 351) included a two-tiered excise tax. Closed system e-cigarette products that are pre-filled and not intended to be refilled by the consumer will be taxed at “forty cents per milliliter of the electronic cigarette liquid contained therein.”

Any other electronic cigarette product such as “electronic nicotine delivery systems, liquid nicotine containers, vapor products and electronic cigarette liquids”, which are open systems components, will be subject to a tax of ten per cent of the wholesale sales price of such product.

This split tax structure reflects the struggle between the advocates of a simple specific tax based on liquid volume and those who believe that a low volume-based tax is more advantageous to closed, disposable products such as Juul or Vuse than to larger containers of e-liquid used to refill open systems products.

The tax went into effect on 1 October 2019.