INDIANAPOLIS — Raising the cigarette tax in Indiana started as a real possibility this 2021 legislative session but now it’s unlikely. However, a small vaping tax is still alive at the Statehouse despite criticism.
Seattle, Washington native Vasiliy Frantsevich doesn’t understand why Indiana is choosing to move forward with a vaping tax increase over cigarettes.
“I think because we already understand how horrible smoking cigarettes is, it’s kind of easier to convince people this is really bad for you,” explained Frantsevich.
In his state, they have a three dollar per pack cigarette tax. Indiana’s is less than a dollar. The Indiana Chamber of Commerce and many other groups have been pushing to raise it to two dollars.
“It costs businesses an estimated $6.2 billion a year here in Indiana in higher healthcare costs, absenteeism, and lost productivity,” said Indiana Chamber President Kevin Brinegar.
Republican senate leaders said they wanted to save the cigarette tax hike for when federal Medicaid funding decreases. However, they said they are moving forward with a small vaping tax increase to send a message to young people it is dangerous.
The proposal increases open e-liquid systems 10% and puts a .10 cent per mL tax on closed systems like the JUUL.
“We oppose any kind of new excise tax on vaping products,” said Gregory Conley, President of the American Vaping Association. “But ultimately if legislators are going to move forward with this, it should be a low and specific tax. One on open systems and one on closed systems.”
The Indiana Chamber of Commerce said this vape tax is so low it’s not worth doing. They don’t think it will get young people to stop or raise enough money to help. It’s expected to only give the state about $5 million in revenue.
“Either raise it up to a level that’s comparable to the tax on cigarettes or take it out and we will come back and have this discussion at a later time,” said Brinegar.
The American Vaping Association said raising it to the cigarette tax level may actually increase cigarette use.
“Any tax on vaping products is premature particularly in a state with nearly 1 million adult smokers,” said Conley. “These businesses, these vape shops, they are helping smokers quit.”
Lawmakers are still debating vape and cigarette tax increases but should come to an agreement in the coming days.