Vapers in New York will pay a new 20 percent sales tax on vaping products starting Dec. 1.
The tax, passed as part of the state’s fiscal 2019-2020 budget (S.B. 1509C), applies to the liquid and gel that is used in electronic devices including cigarettes, cigars, and vaping pens, regardless of whether they contain nicotine.
The measure is projected to raise $2 million in revenue in fiscal year 2020, which ends March 31, and $19 million in FY 2021, according to the governor’s office. The money will go to the state’s Health Care Reform Act Resource Fund. The revenue estimate takes into account a recently passed state law raising the legal age for the purchase of tobacco products to 21 from 18.
State lawmakers said the provision would help curb the increasing number of underage people using tobacco products, but some business leaders and pro-vaping consumer advocacy groups warned the law would hurt vape product sales. Vaping is a healthier option than cigarettes and can be used to help kick smoking habits, the groups said.
“We don’t believe that people who have made the healthier decision to use smoke-free products should be punished for quitting smoking,” Alex Clark, CEO of the Consumer Advocates for Smoke-Free Alternatives Association, said April 2. “We oppose extra taxes on vapor products across the board. They’re already subject to sales tax and that should be enough.”
There are more than 700 vape shops employing about 2,700 people statewide, according to the New York State Vapor Association.
“There’s certainly no reason why we should be taxing different nicotine delivery systems differently, whether they’re tobacco cigarettes or e-cigarettes,” said Assemblyman Richard N. Gottfried (D), who chairs the Health Committee. “The experience is pretty clear that taxing the product discourages use.”
Gov. Andrew Cuomo (D) proposed the sales tax in his January executive budget proposal along with legislation banning vape flavors. The measure didn’t make it into the final budget agreement.
Lawmakers said they’re likely to consider flavor regulations in the future, said state Sen. Gustavo Rivera (D), who chairs the Senate Health Committee, adding that some flavors appear to be marketed to a younger consumers.