Facing a budget shortfall last year, lawmakers and Gov. Tom Wolf slapped a massive 40 percent wholesale tax on vaping products, forcing vape shop owners to pay the tax retroactively even on products already on their store shelves. The impact on small businesses owners, employees, and customers has been devastating.
Of the 311 vape shops open for business in 2016, 30 percent have shut their doors for good. Click here for an interactive version of the map below showing the names and locations of 93 closed vape shops.
Scottie Freeman in Erie, Chris Hughes in Lycoming County, and Evan Urban in Lancaster are just a few of the dozens of vape shop owners who’ve had their livelihoods stripped from them over the past year.
“This tragedy should be a cautionary tale to both lawmakers and taxpayers as the state budget is hammered out over the next few weeks,” commented Bob Dick, senior policy analyst for the Commonwealth Foundation. “Instead of addressing overspending, last year Gov. Wolf and lawmakers targeted vape shop owners with a business-killing tax. What industry will be the scapegoat for overspending this year?
“To add insult to injury, while nearly 100 vape shops were taxed out of existence, state government gave other politically-favored businesses $800 million in taxpayer-backed handouts, including $250 million to the horse racing industry alone. The injustice is impossible to ignore.
“Instead of demanding more from taxpayers and forcing small business owners to close their doors and fire their employees, lawmakers and Gov. Wolf must eliminate unfair corporate welfare spending.”
Senate Bill 508, sponsored by Sen. Camera Bartolotta, would repeal the 40 percent wholesale tax and replace it with a less onerous 5-cents-per-milliliter tax. The Senate Finance Committee advanced the bill in April, but it has not been scheduled for a floor vote.
Bob Dick and other Commonwealth Foundation experts are available for comment. Please contact Gina Diorio at 862-703-6670 or [email protected] to schedule an interview.
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