States looking for money in e-cigarettes

Stateline has an article today about e-cigarette taxes:

With the popularity of e-cigarettes growing, more states are more likely to look to the new devices for revenue. . . .

“This is going to be one of the most introduced and debated topics in state legislatures this year, especially the tax issue,” said Max Behlke, analyst for the National Conference of State Legislatures. Behlke noted with fewer people smoking traditional cigarettes, a revenue stream that states depend on is decreasing. Taxing electronic cigarettes is a way to recoup some of that money. . . .

In some states, lawmakers are making the distinction between imposing new taxes and simply extending an existing tax, such as on the tax on cigarettes, to e-cigarettes.

In Washington state, Democratic Gov. Jay Inslee has proposed raising the $3-a-pack cigarette tax by 50-cents a pack as well as levying a tax—he didn’t say how much—on e-cigarettes and vapor products. He said the taxes would raise $56 million.

Actually he has said how much: 95 percent of the taxable sales price (the same tax rate as that for “other tobacco products”). This proposed excise tax on vapor products (including e-cigarettes) would bring in an estimated $18.1 million for the 2015-17 biennium.

(For more on the tax changes the governor has proposed as part of his 2015-17 budget, see here.)