Background: Pennsylvania’s legislature approved HB 1198 (now Act No. 84) which provided new sources of revenue. Article 12-A creates a new 40% tax on the purchase price charged to retailers of all vapor products. The tax entered into effect on 1 October 2016.
Electronic cigarettes are defined in the amended Tobacco Products Tax Act as devices that generate a vapor as well as the liquid used in the electronic cigarettes. They are classified as “Tobacco Products” along with roll-your-own tobacco (RYO), snuff and related items. Only the tax on electronic cigarettes is set at 40% of the wholesale price; The tax on any other tobacco product is set at $0.55 per ounce. The Law also introduces a floor tax on tobacco products including electronic cigarettes already in retailers possession that must be paid within 90 days of the effective date.