Lawmakers Looking to Take on E-Cigarettes with 86% Tax in Next Session

In an attempt to quell the increasingly serious vaping epidemic among youth, the Utah Legislature has been exploring their options. The House Health and Human Services Interim Committee voted unanimously Wednesday to recommend a bill that would levy a tax on electronic cigarettes.

Sponsored by Representative Paul Ray (Republican – Clearfield), the measure (Electronic Cigarette and Other Nicotine Product Amendments) proposes an excise tax of 86% of a manufacturer’s price on the sale of e-cigarettes (whether it contains nicotine or not), prefilled electronic cigarettes, alternative nicotine products, nontherapeutic nicotine device substance, and prefilled nontherapeutic nicotine devices, except for products approved by the FDA as nicotine replacement therapy. This would increase the retail price for e-cigarettes by roughly about 50 percent.

The bill also directs $2 million of annual tax revenue generated from the tax to local health departments for enforcement of regulations and penalty provisions for electronic cigarettes, tobacco, and nicotine products. In addition, the money would be used for the development and administration of tobacco, electronic cigarette, and nicotine product cessation programs for youth; and to also develop and provide tobacco, electronic cigarette, and nicotine product use prevention education programs.

“It’s imperative that we get something done with this,” Senator Allen Christensen (Republican – North Ogden) said. “We now have 17 states, including the District of Columbia, that have put taxes on devices to try to slow down this epidemic. We have reports of dozens of young people in California, Illinois, Minnesota, Wisconsin, and in yesterday’s paper we have five teens here in Utah who have been hospitalized from vaping.”

In June, San Francisco became the first U.S. city to ban e-cigarettes. “It embarrasses me to say that San Francisco stepped ahead of Utah and took the step of actually banning vaping in the city and Utah can’t manage to do anything about it,” Christensen said.

Michael Siler, a lobbyist representing the Utah Alliance for Vaping-Free Kids, said the proposed bill is the best way to attack the issue. The economic theory of price elasticity of demand, in addition to evidence-based research, confirms that since they are not severely addicted to nicotine and have a sparse amount of disposable income youth users are extremely sensitive to price increases, Siler told the committee. At least 15 percent of youth users will quit for every 10 percent price increase that occurs.

He said the group’s current projections show that 18.3 percent, or nearly 41,800, of Utah youth ages 13-17 use e-cigarettes and vaping products every day. “We are experiencing an epidemic in our state, folks,” Siler said. “The next and biggest step you can take to quell this epidemic is to vote yes for this bill. For our kids, and really for all of us, I urge you to do so.”

Senator Evan Vickers (Republican – Cedar City) believes the education component is critical because of the perception that vaping is considered “cool.” He hopes the bill’s tax revenue funds education about the consequences of vaping. Vickers applauded The Church of Jesus Christ of Latter-Day Saints for weighing in on the issue. Last week, the Salt Lake City-based faith issued a statement clarifying that the Word of Wisdom, its health code, prohibits vaping and e-cigarette usage. “I think the education piece needs to be more robust. If we can piggyback on what’s going on in our religious community and do that from a robust standpoint from an education piece on the state level, I think we can have a real impact,” Vickers said.

Ray pointed to a number of vaping studies that have concluded the practice is unhealthy. “You have an industry that’s going out of business because they’re killing their clientele with tobacco. The only way to stay in business is to addict a new generation. This is a way because we’ve done a really good job educating about smoking, so this is a really good way to addict that new generation so that they can continue to make their billions of dollars of blood money,” Ray said.

Representative Jennifer Dailey-Provost (Democrat – Salt Lake City), who made the motion to recommend the bill, expressed her happiness that action is finally being taken and also mentioned that she and other lawmakers plan on introducing additional vaping bills. “This is just one of many tactics that need to be addressed and nobody’s hanging our hat on this as the only solution. I’m hoping that we get unanimous support from the committee for this issue and then many others going forward.”

Lawmakers indicated interest in having the bill considered during a special legislative session in September, but it remains to be seen if that will come to fruition.

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