Background: A tax on vapor products went into effect on 1 October 2019 in the state of Wisconsin. The state’s budget for fiscal year 2020 introduced a tax of 5 cents per milliliter of liquid used in e-cigarettes.
Due to a decline in tobacco use throughout the state, cigarette excise tax receipts are trending downward. Historically, Wisconsin has depended very heavily on tobacco tax collections as a percentage of general revenues ranking 4th among the 50 states in this respect in 2016, according to a study by the Wisconsin Policy Forum. The imposition of a tax on vapor products is designed to offset in part the loss of tobacco excise revenue.
Initially, Governor Tony Evers sought a much higher tax. His original budget proposal would have extended to e-cigarette devices and fluids the state’s existing tobacco products tax of 71% of the manufacturer’s list price to distributors.