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On May 2nd, according to foreign reports. Last Friday, lawmakers in Hawaii passed a tax parity law that applies the same tax rate to vape products as combustible cigarettes. If Governor Josh Green signs it into law, vape products will be subject to a wholesale tax of 70% – one of the highest tax rates in the state.
The bill, SB975 SD2 HD3. Defines vape as tobacco product. And negotiated in a marathon meeting between the state legislature and the Senate before the deadline for this year’s legislative session. The Legislative Council adjourned on May 4th.
It is not yet of certain when the bill will be sent to Governor Green. Or whether he has promised to sign the bill. If signed into law, the tax will take effect on January 1, 2024. Hawaii currently does not levy taxes on vape products.
Although the goal of tax parity is to prevent minors from consuming vape, research by health economists suggests that it actually encourages smoking, partly by eliminating the price advantage that motivates many smokers to try vapes. Cigarette and vape play a role as economic substitutes: when one price rises, nicotine users will switch to the other.
Earlier in this session, a separate tax bill in Hawaii failed in the committee, as did a bill prohibiting flavored vapes (and flavored tobacco). Last year, Hawaii passed a flavor ban, but it was vetoed by Governor David Eager, who agreed with anti vape and tobacco control groups that it was not strict enough.
Among the states in the United States, Minnesota has the highest vape tax rate -95% – but it only applies to nicotine containing products imported from outside the state. Vermont ranks second – accounting for 92% of wholesale prices of all products, including those that do not contain nicotine. The District of Columbia imposes a 91% tax on vapes. Massachusetts imposes a 75% wholesale tax on all products and also implements a ban on flavored vape. The tax revenue of California is close to that of Hawaii (which includes both wholesale and retail taxes). No other state has a wholesale tax of 70% or higher.
In the eariler times JSBvape world view has a report for Hawaii vape tax news about The new tax bill (S.B 975) . Click here for read the report.
Next news: Ireland will ban the sale of vape to children until mid July