How to Fix the Vape Tax
The House will return to session later today, with the Senate to follow early next week. The two chambers are in session for a total of nine days. This gives lawmakers a limited amount of time to address Pennsylvanians' priorities.
The repeal of the 40 percent vape tax is one such priority. The tax is scheduled to go into effect on October 1, but it has already inflicted immense harm on the business owners, employees, and customers in the vaping community. Approximately 50 shops have shut their doors, according to industry experts. More closures are inevitable if lawmakers fail to repeal this punishing tax.
The 40 percent tax is levied on products purchased and on shop owners’ existing inventory. If a shop holds $100,000 in inventory, the owner would be required to cut the state a check for $40,000. Is this a reasonable demand?
The answer is no. And that's why entrepreneurs like Dori Odosso and Amy Crivella are speaking out. It's why Scottie Freeman had to close down his business, and why Chris Hughes is planning to do the same. These people—and countless others—have been adversely affected by Gov. Wolf’s insistence on raising taxes.
Fortunately, lawmakers have introduced varying pieces of legislation to prevent further harm. Here are the legislative options offered thus far:
- HB 2339, which is sponsored by Rep. Joseph Petrarca, repeals the tax outright.
- HB 2342, sponsored by Rep. Jeff Wheeland, repeals the excise tax and replaces it with a 5 cent-per-milliliter tax. Sen. Camera Bartolotta has announced her intention to introduce similar legislation in the Senate.
- Sen. Thomas Killion has introduced SB 1362, which would delay the payment of the tax from 90 days after it takes effect to 180 days.
Complete repeal is preferable and practical. The tax itself is estimated to bring in just $13 million—a relatively small sum in the context of a $79 billion budget. Lawmakers could replace this revenue by cutting less than 2 percent of the current budget's $800 million in corporate welfare spending.
If lawmakers won't support spending reductions, creating an alternative tax structure that keeps vape shops open is the next best option. This solution was the subject of our Philadelphia Inquirer op-ed published just this morning. The issue is clearing gaining momentum. Now is the time to act.
Vape shop owners and their customers deserve a government than protects their right to do business—not one that tramples on it.