Senate Proposes 20% Vaping Tax

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Senate Proposes 20% Vaping Tax

House version would have based tax on the amount of e-liquid

(INDIANAPOLIS) - Legislators are still looking to tax vaping, but the Senate has a different idea of how to do it.

The House voted to tax e-liquids by the ounce. A Senate committee has changed that to a straight 20% tax on the price. Markle Senator Travis Holdman says he wanted a tax more directly related to the potential health effects, including a tax based on the nicotine content. But he says that would be too hard to calculate. And Holdman says with so many one-man operations making e-liquids, it's not practical to tax the wholesale price.

Holdman says the 20% tax accomplishes another goal of creating rough parity with the cigarette tax. Cigarettes are taxed per pack regardless of the price, but Holdman says the tax works out to about 22%.

The amendment originally would have added a registration fee for sellers of CBD oil, to pay for testing to confirm the product is staying within legal limits for THC content. That provision plus the tax prompted two Republicans to join Democrats in voting no, deadlocking the vote. After a brief conference, senators deleted the CBD provision, and Democrats reluctantly came on board to keep the bill moving. Only Crawfordsville Republican Phil Boots voted against the slimmed-down version. He contends all those under-the-radar manufacturers will still skirt the tax, putting the burden unfairly on retailers.

The full Senate will vote Tuesday. If it passes, it'll be up to the House to decide whether to accept the changes or negotiate further.

(Photo: Marco Grigollo/Thinkstock)

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