Today’s map looks at the design of excise taxes for vaping and tobacco alternatives, which is important in the pursuit of harm reduction from smoking.
Higher vapor taxes on products such as E-cigarettes could encourage vapors to go back to smoking cigarettes and will discourage cigarette smokers from switching to vaping products.
Since vaping entered the market in the mid-2000s, it has grown into a well-established product category and a viable alternative to smokers. So far, 30 states and the District of Columbia have imposed an excise tax on vaping products. While vapor taxes may represent an untapped revenue source for states that have yet to impose an excise tax, substantial revenue is unlikely in the short term.
Vapor taxing methods vary. Authorities tax based on price (ad valorem), volume (specific), or with a bifurcated system that has different rates for open and closed tank systems.
Of those that tax wholesale values, Minnesota tops the list with a 95 percent rate and Vermont follows closely at 92 percent. Delaware, Kansas, Louisiana, North Carolina, and Wisconsin all share the lowest per milliliter rate ($0.05).
The following map shows where state vapor taxes stand as of July 1, 2022. Among the highlights in changes:
Adam Hoffer – Tax Foundation – 2022-07-05
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