Vapeboss – Hawaii currently does not have a tax on vaping products. Hawaii state legislators drafted a "tax parity" bill last Friday, which applies the same tax rate to vaping products as to combustible cigarettes. It will become law if signed by Governor Josh Green. Vape products would be subject to a 70% wholesale tax, one of the highest rates in the United States.

The bill, SB975 SD2 HD3, defines vapes as "tobacco products," and was negotiated in a marathon conference session between the State House and Senate just before the conference deadline for this year's legislative session. The legislative session adjourned on May 4. The bill also prohibits sales to consumers by out-of-state retailers, essentially banning online sales by sellers outside Hawaii.

However, in Indonesia, the government has decided to increase the excise duty on electronic cigarettes by 15% annually until 2027. Meanwhile, the tax rate for Other Tobacco Processing Products (HPTL) has also risen by up to 6%. With this 15% tax adjustment, it is not impossible that there will be a surge in the price of vapes and liquids, which are key components.

In addition, the purpose of the tax is to prevent underage vaping. Research by health economists shows that taxes actually encourage people to smoke, partly by eliminating the price advantage that drives many smokers to try e-cigarettes. Cigarettes and vapes serve as economic substitutes; when the price of one rises, nicotine users switch to the other.

Among US states, Minnesota has the highest vape tax rate of 95% but it only applies to nicotine-containing products imported from out-of-state. Vermont is second with 92% of the wholesale price for all products, including non-nicotine products. The District of Columbia's tax is 91%. Massachusetts assesses a 75% wholesale tax on all products, and also enforces a flavor vape ban. California's tax approaches Hawaii's tax (with a combination of wholesale and retail taxes). No other state has a wholesale tax of 70% or higher.

It is uncertain when Governor Green will commit to signing the bill. If signed, the bill would become law, and the tax would take effect on January 1, 2024. Meanwhile, 8 other US states prohibit online sales of vaping products.

Source: Vaping360