The Connection between NY’s Problem with Cigarette Smuggling and Proposed E-Cigarette Taxes
As if consuming fewer harmful chemicals was not enough incentive to make the switch to vaporizer cigarettes, then the increased taxation on tobacco should be. Federal and local taxes on tobacco have gotten so high that in some places that cigarette smuggling in certain states, like New York, has reached an all-time high.
The Wall Street Journal ran an op-ed piece on April 12 written by Americans for Tax Reform’s director of state affairs, Patrick M. Gleason, in which he states that cigarette smuggling is simply a symptom of a larger problem—taxation. Furthermore, Gleason discusses New York’s lawsuit against UPS. This lawsuit stems over allegations that UPS delivered roughly 700,000 cigarette cartons into the city and state to circumvent New York’s high cigarette tax.
New York currently has the highest tax levy on the purchase of cigarettes in the country. The state’s smokers pay on average $4.30 extra for a pack of cigarettes, on top of an additional $1.50 in local taxes. This leaves a pack of cigarettes costing around $12 a pop.
A nonpartisan tax foundation states that over half (58%) of cigarettes in New York come in from other states. This suggests that raising taxes on cigarettes could simply boost the amount of cigarettes smuggled over state lines since it raises the potential profit for smugglers.
Considering that raising “sin taxes” are popular amongst politicians looking to boost their state’s income, there have been numerous tobacco tax increases in the last 5 or 6 years. However, only three of these increases were able to bring in the expected revenue.
Furthermore, Gleason’s op-ed states that even though politicians say they are raising cigarette taxes in an effort to curb the number of people who smoke and encourage the population to be healthier, this sentiment is negated when they are also levying taxes on vaporizer cigarettes.
Currently pending, there are 15 bills nationwide that are seeking to add taxes to the purchase of vaporizers and e-cigarette accessories (including e-liquid). These proposed taxes could increase the price of e-cigarettes by 60 to 80 percent in some states. The states with the highest proposed e-cigarette taxes are Hawaii (80%), New York (75%), Oregon (65%) and Ohio (60%).
It would be seem that the best way to avoid paying high taxes on cigarettes is to switch to vaporizer cigarettes instead. However, once taxes start rolling out for e-cigarettes too, people will be right back in the same boat. In that case, we can expect to see some of the same issues with smuggling.
Most people don’t enjoy paying taxes, even if they are necessary. That said, placing an 80% tax on vaporizer cigarettes is exorbitant. With any luck, these proposed taxes will be replaced with more reasonable figures.
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Gianna Del Monte is the Brand Manager at VaporFi. She has been in the vaping industry since June 2015 and has extensive experience in successfully managing and marketing a variety of new vapor product launches. Originally from New Jersey, Gianna has lived in the Miami area for the last 5 years.