Vermont

Background

State Representative George Till, a physician concerned about “youth vaping”, was the chief sponsor of H.47, a tax bill which extends the Tobacco Products Tax to tobacco substitutes. The objective was to increase prices of vapor products in order to reduce consumption among young people.

Taxation of electronic cigarettes

The stated purpose of the bill is “to subject electronic cigarettes to wholesale tax on other tobacco products under current law.” The definition of other tobacco products is broadened to encompass products sold as a tobacco substitute “including any liquids, whether nicotine based or not, or delivery devices sold separately for use with a tobacco substitute.”

Tobacco substitutes are defined as “products, including electronic cigarettes or other electronic or battery-powered devices, that contain and or are designed to deliver nicotine or other substances into the body through the inhalation of vapor.”

By redefining other tobacco products to include tobacco substitutes, electronic cigarettes and liquids used with them are rendered subject to the Tobacco Products Tax. The tax is applied at 92% of the wholesale price.

The tax on electronic cigarettes went into effect on 1 July 2019.