A 40% tax on e-cigarette producing in the US is proving a difficult battle for industry, as the tax swept through the state of Pennsylvania, destroying one-third of the e-cig businesses.
In response, the Pennsylvania Vape Association rallied at the state capitol building on Monday to battle the tax and encourage lawmakers to reduce it to a more reasonable figure.
Approximately 100 e-cig stores have closed since the tax became effectual on October 1st, a tax which applies retrospectively to all e-cig businesses in the state, which is proving in many instances, fatal.
A US vaping group based in Kansas has been similarly battling e-cig tax on e-liquid, and the same problems seem to be occurring in Pennsylvania. The local e-cigarette industry in Pennsylvania is fighting a 40% tax that has killed one-third of the businesses.
“An estimated 100 vapour businesses in 2016 were closed, which is approximately one-third of them,” said John Dietz, vice president of the Pennsylvanian Vape Association.
“It’s an alarming reduction in the Pennsylvania workforce, many square footage of retail space lay vacant, and it’s all due to the tax. Many owners and employees have filed bankruptcy and for unemployment benefits and our organisation has been in contact with numerous owners who plan to close their doors in 2017.”
Dietz added that there are plans to scrutinise the legislature to amend the tax, reducing the financial burden to five cents per millilitre of e-vape juice.
Echoing a popular argument of the vaping community, Jan Verleur, the CEO of a major e-cigarette company, said that lawmakers are ignoring the positive impact of e-cigs that are helping smokers quit.
“Our industry is one born out of innovation. You would not have seen an industry go from nothing to in excess of $5 billion domestically in the flash of an eye if we were not solving some problem.”