A new bill proposed by Georgia lawmakers to increase taxes on vaping products is being criticized for its failure to benefit consumers.
Both vaping proponents and advocates say House Bill 864, which proposes a 7 percent excise tax on vaping products and a $250 licensing fee for vendors, does little to address concerns surrounding the smoking alternative.
Alex Clark, CEO of The Consumer Advocates for Smoke-free Alternatives Association, said without outlining how the increased tax revenue is going to be spent, HB 864 is just a “money grab” by lawmakers.
“If the money is going to be used to fix potholes and build roads, then it doesn’t benefit consumers,” said Clark, who added that lawmakers should use the funds from the excise tax to monitor compliance and keep vaping consumers safe.
Vaping products include e-cigarettes, cartridges, vape pens and other devices. Excise taxes often are charged on the consumption of products at the time of sale.
Raising tobacco excise taxes could generate millions of dollars of revenue for the state. Georgia currently has a tobacco excise tax of 37 cents per pack of 20 cigarettes and 23 percent of the wholesale price of cigars. The state is projected to receive an estimated $229 million in revenue from tobacco taxes in 2020.
Georgia's tobacco tax rate is below the national average of $1.27 per pack. It ranks as the state with second-lowest smoking costs in the nation, according to a recent report by WalletHub. There is no tax on vaping products or other tobacco alternatives. However, consumers are subject to sales taxes.
Taylor Hall, a spokesperson for the American Cancer Society Cancer Action Network in Georgia, said HB 864 still does not address the fiscal and health crisis in Georgia.
“Only by providing a significant increase in taxes on all tobacco products, including a tax increase to $1.87 per pack on cigarettes paralleled with a 39 percent wholesale tax on all other tobacco products, including e-cigarettes, will we see real action in our state that protects future generations from tobacco’s dangers and saves thousands of Georgians who struggle with addiction,” Hall said.
CAN advocates believe without a tax increase to $1.87 or higher, consumers could use coupons or other discounts to get the tobacco products at the previous price. They also estimate the increased tobacco tax rate would save Georgia about $1.84 billion in long-term health-care costs and add more than $425 million in new annual revenue. About 80 percent of Georgians polled by the Georgia Budget & Policy Institute said they support a tobacco tax hike.
Clark said doubling the taxes on the vaping products will not limit use, but instead increase illegal sales.
Georgia senators also have filed a bill this session that targets restricting access by teenagers to vaping products.