Last month, Philadelphia added a grueling $2 per pack tax on cigarettes that left many smokers flocking to local vape shops. But now, city officials are setting their sights on ecigs as a potential new money maker. Today, councilwoman Blondell Reynolds Brown announced that she will push for a new bill to add a $2 tax on every ecig sold in the city. But she isn’t stopping there. She’s also trying to tax e-liquids at 50 cent per milliliter.
Brown said the additional tax revenue would go a long way to help city schools. “When we know our school district is starving for revenue, every penny counts,” she said. “We have to think outside the box and come up with new reoccurring revenue streams.” Apparently, taxing tobacco wasn’t quite enough to line the city’s pockets so now they are going to try to hit ecigs. Brown also intends to push for a new loose-leaf tobacco tax at 14 cent per ounce, with that money going straight to the city’s general fund.
“Sales (of e-cigarettes) are exponentially growing. We need to capitalize on that, especially knowing our school district is not being funded at appropriate levels,” she said. It’s frustrating to see city officials delegating money before tax legislation is even formally considered, but that is exactly what is happening in Philadelphia. By justifying that ecig tax would benefit local schools, it lends more support to Brown’s legislation. But ultimately, this plan could backfire.
Ray Ros, the manager at local Love Vape in Philly, said the legislation could cause some ecig users to run right back to cigarettes. After all, many of the city’s vapers have switched because of the financial strain that recent tax hikes have placed on their budgets. Ros said most vapers buy their e-liquid in 15-30 milliliter bottles, and the new tax would make those $5 per expensive. “This would really hurt our business,” he said with frustration. “We make most of our money in the juices.”
Just last month, Love Vape had a surge in business when the city imposed new taxes on cigarettes, but now Ros fears the boom is destined to fizzle out completely. He fears that with vaping prices potentially topping the cost of smoking, the results could be disastrous for both the business and local health. “It might drive people back to smoking cigarettes,” he said.
How do you think this new tax would impact vaping in Philadelphia? Will vapers run back to their old cigarette brands or will they stick with ecigs for the other benefits?