Electronic cigarette customers would pay a 56% tax on vaping products, with distributors facing a suite of new restrictions, under a bill that earned the unanimous endorsement of the Senate Health and Human Services committee on Wednesday.
The tax is estimated to generate about $18 million during its first year, and more than $20 million in subsequent years, which would fund $4 million in training, enforcement and tobacco cessation programs with the remainder held in a restricted account for use by lawmakers.
“We only spend money that we’re collecting here,” said Allen Christensen, R-North Ogden, the sponsor of SB37.
Christensen said he originally wanted to impose an 86% tax on e-cigarettes, but agreed to decrease the levy after members of the Senate Republican Caucus “twisted my arm.”
A 56% tax is equal to the state and federal taxes imposed on a pack of traditional cigarettes. Other provisions in the legislation include stricter criminal penalties for selling or supplying vaping products to minors, new requirements on electronic cigarette labeling, and prohibitions on discounted sales and giveaways.
Sen. Luz Escamilla, D-Salt Lake City, said she would have liked to see additional fees imposed on vaping products.
“I would have taxed the life out of them even more,” Escamilla said.
But Walter Plumb, an anti-drug advocate, spoke against the bill on Wednesday, saying that it did not go far enough to punish a “bogus industry." During his testimony in committee, Plumb held up a Juul pod — among the most popular commercial vaping cartridges — and a pack of cigarettes and said the bill would push business toward the electronic tobacco products.
“There’s many positive things about this bill,” Plumb said. “But this is a sellout to big tobacco and the vaping industry in our state.”
Plumb’s remarks led to a brief, tense moment during Wednesday’s committee hearing, when Senate Majority Leader Evan Vickers, R-Cedar City, told Plumb to “get your facts straight.”
“Those two items you just held up will be taxed at the same amount,” Vickers said.
SB37 is one of several pieces of legislation under consideration this year that deals with electronic cigarettes and vaping. State leaders have indicated that such legislation is a priority following last year’s nationwide outbreak of lung injuries and deaths — including one in Utah — related to the use of vaping products.
The national Centers for Disease Control and Prevention say that cases of vaping-related lung injuries have continued to decline since peaking in September, and that the injuries are strongly linked to Vitamin E acetate, an additive found in some vaping products.
But Joe Miner, executive director of the Utah Department of Health, said vaping continues to be a serious public health issue, particularly among children.
“We really need to address it," Miner said. “And one of the most important and most effective ways of controlling youth use is increasing the price and cost.”
The bill will now move to the full Senate for consideration.
