Tobacco

Kansas Set to Slash E-Liquid Tax

Two-year enforcement struggle ends in tolerable compromise

TOPEKA, Kan. -- Kansas was the state with the highest e-liquid tax in the nation, at least on paper. When it adopted a 20-cent-per-milliliter tax in 2015, proponents of the vaping industry were outraged, saying it would force consumers to buy product online or across state borders and obliterate the vaping business in Kansas.

As a result, lawmakers adopted a measure to push enforcement of that 2015 budget law to this past January, allowing for more public debate and input from business people and health advocates alike.

Last week, the Senate tax committee voted to cut the 20-cent tax to what vaping proponents call a “reasonable” 5 cents, a number in line with other state taxes and retail-price elasticity, according to an official with the local vaping association.

“That’s [still] a tough [increase], but the advantage is that while the tax is on the books, it hasn’t been collected yet,” Spencer Duncan, a spokesperson for the Kansas Vapors Association, Topeka, Kan., told CSP Daily News. “The pitch we made was the 20-cents-per-milliliter tax was ... the highest tax in country and out of line with [states such as] North Carolina and Louisiana.”

The Senate tax committee passed the amendments unanimously on March 6, with changes moving the implementation of the 2015 law to July 1, 2017, clarifying the definition of consumable material as any material consumed through an e-cigarette device, giving the state Department of Revenue the enforcement authority to oversee the tax and, most important, lower the original tax from 20 cents to 5 cents.

Though the amendment has to obtain further legislative approval, Duncan expects the measure to make it through. “It’s telling that the [tax committee] was unanimous and favorable of the change and there’s no opposition we know of,” Duncan said, noting how major tobacco companies, lawmakers and local health groups all appear to approve of the amendments. “All it’s doing is correcting the tax and defining definitions.”

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