Pennsylvania Court Reverses Tobacco Tax Assessment on Custom E-Liquids

The Pennsylvania Commonwealth Court reversed the Board of Finance and Revenue’s denial of the taxpayer’s petition for review of tax assessments under the Tobacco Products Tax Act. The taxpayer operates a retail vaping store that produces custom vaping blend e-liquids for sale to customers, and the Department of Revenue assessed Other Tobacco Products tax on these custom blend sales. The court found that the plain language of the Tobacco Products Tax Act only imposes the 40 percent tax when electronic cigarettes are first sold to a retailer, not to individual consumers, and rejected the Commonwealth’s argument that individual customers qualify ...