Retailers Lash Out at Christie's E-Cig Tax

Argue increase will hurt retailers, have negative health impact

Published in Tobacco E-News

By  Melissa Vonder Haar, Tobacco Editor

TRENTON, N.J.  --Electronic cigarette manufacturers like Lorillard (maker of blu Ecigs) and NJOY aren't the only ones speaking out against New Jersey Governor Chris Christie's proposal to levy 75% tax on vaping products. Nearly 50 independent electronic cigarette retailers have formed the New Jersey Vapor Retailers Coalition to fight the legislation.

According to a Wall Street Journal report, the group has hired the New Jersey lobbying giant MWW to make the case that such a steep tax would hurt not just vapor-centric businesses, but any retailer currently in the business, including convenience and tobacco stores.

"You've got legislators trying to put a tax on something they don't understand," Ryan Bunting, owner of the Somerville-based e-Volution Vapors shop, told the newspaper. "They don't even know how the equipment works."

Anti-tobacco groups argue that steep taxes will have a positive effect on public health: Campaign for Tobacco-Free Kids spokesperson Vince Willmore said his organization hopes these taxes will spread across the country and deter minors from the segment.

"They're selling sweet flavors like gummy bears and fruit loops," he told the paper. "It's irresponsible. They're trying to re-glamorize smoking and undermine decades of efforts to reduce it."

The Consumer Advocates for Smoke-Free Alternatives Association (CASAA), however, said that the science does not support such claims, which would most likely negatively affect public health.

"There is absolutely no public health benefit to excessively taxing products that pose an estimated 1% of the risk of that of smoking," the association wrote on its website. "In fact, imposing high taxes on low-risk products will work against the interests of public health by discouraging smokers from using a far, far safer alternative to smoking."

"A proposal like North Carolina's is far more reasonable," Scott Drenkard, a researcher at the nonpartisan Tax Foundation, told the Journal, referencing North Carolina's recently passed five-cent e-cigarette excise tax. "You shouldn't be trying to tax new products to the extent of putting them out of business."

The threat of lost business is even more pressing as electronic cigarettes can currently be sold online, where no state excise taxes are applied.

"Imposing such taxes on e-cigarettes could have devastating effects on New Jersey small businesses," said CASAA. "Many New Jersey consumers will avoid the tax by buying online, and the costs to the New Jersey government to collect taxes from these citizens could outweigh the revenue the tax will bring the State."

Sam Ross, owner of the Manahawkin-based Advantage Vapors, described himself as a "walking billboard" against the e-cigarette tax.

"You're going to put people out of business who are helping people quit smoking," he told the paper. "You put this tax on, and they're all going to find the products online. Why would you come in here and buy from me? I sure wouldn't."

Kevin Roberts, a spokesperson for Christie, told the Journal that the administration was sympathetic to small businesses, but views the tax is fair after studying the potential ramifications.