Vape taxes set to triple in Louisiana

Photo courtesy DepositPhotos

A state tax on nicotine vape products and e-cigarettes will increase threefold in the coming weeks.

Louisiana Gov. John Bel Edwards announced Wednesday that he signed into law a bill that hikes the excise tax on vapes from 5 cents per milliliter of nicotine solution to 15 cents. Most vape cartridges come in standard sizes of around 1 milliliter.

The new tax increase takes effect on July 1.

Excise taxes are taxes imposed on specific goods or activities. In Louisiana, wholesalers or retailers typically pay the excise taxes after purchasing consumable vapor products for resale. The cost is usually passed on to the end user through higher prices.

House Bill 635, sponsored by Rep. Paul Hollis, R-Covington, drew overwhelming support from both chambers of the legislature, advancing from the House in a 83-13 vote and gaining unanimous Senate approval.

The Legislative Fiscal Office expects the tax bump to generate an additional $9.8 million in revenue annually on top of the roughly $5 million it currently brings in. Most of the revenue will help fund the salaries for Louisiana State Police.

Any amount in excess of $22 million is slated to be divided equally among the Department of Wildlife and Fisheries, the Office of State Fire Marshal and the state Public Defender Board, though revenues aren’t expected to reach those levels at any time over the next five years, according to the fiscal note.

Vaping has become increasingly popular, especially among young users. A 2021 Louisiana Campaign for Tobacco-Free Living survey found vaping is three times more popular among youth than cigarettes. About 10% of middle school students and roughly a quarter of high school students in Louisiana vape. Approximately 21% of middle schoolers and 36% of high schoolers have tried it at least once, according to the survey.

Hollis’ legislation includes provisions that could make it harder for people under 21 to purchase vape products. For online purchases, manufacturers must use real-time electronic age verification platforms approved by the state commissioner of the Office of Alcohol and Tobacco Control (ATC). It also spells out $500 fines for manufacturers who violate the age verification rules.

Additionally, the law will create a directory of all vape and alternative nicotine products authorized for sale in the state. Beginning Nov. 1, manufacturers will have to register their products with ATC or face a $1,000 fine for every day an unregistered product is offered for sale.

d