E-cigarette shops fear 40% tax that starts in October

Written by Ben Allen, General Assignment Reporter | Sep 14, 2016 4:56 PM

(Harrisburg) -- E-cigarette shops in Pennsylvania will soon face a tax on the products they sell, and the industry's trade association says some businesses could shut down as a result.

The state budget includes a 40-percent tax on vaping products.

Shops will have to run an inventory October 1st, put a value on the goods, and then submit payment to the state by the end of the year.

Dave Norris, president of the Pennsylvania chapter of the Smoke Free Alternatives Trade Association, says vape stores will have to buy from licensed wholesalers that will automatically include the 40-percent tax.

Norris says the industry feels like they're being attacked because cigarette smokers are moving to e-cigs.

"They're losing the tax income from that and they're looking at what is causing this loss, and it's people stopping smoking and beginning vaping. And so therefore, they came after this industry to try to replace some of that lost revenue," says Norris.

Norris, who owns three shops in the midstate, says some owners are talking about closing because they can't afford the tax.

He says most stores are owned by one or two people who don't have the money to cover the tax.

"Can I get financing? Can I find a way to sell off my inventory so that the amount that I owe the state is a manageable number come October 1st? We're two weeks away from this decision being made and a lot of them are still questioning that exact same thing - how can I afford to pay this?" he adds.

Governor Wolf's spokesman Jeff Sheridan has said both Republicans and Democrats supported the tax hike, which helped bridge a budget gap.

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