York vape shops fight impending tax
- Vape shop owners say 40 percent tax, scheduled to take effect Oct. 1 in Pennyslvania, could shut them down.
- Tax on vape products is part of $1.3 billion revenue package signed by Gov. Tom Wolf in July.
Hanover business owner Tony Myers is using his vape shop to fund his other business venture, which aims to provide employment opportunities for autistic adults.
But both businesses, About It All and About It All Vapors, are in danger of closing — or moving to Maryland — with a 40 percent wholesale tax on vape products set to take effect Oct. 1 in Pennsylvania.
Myers and other local vape shop owners are in a hurry to amend that deal, which also will require companies to pay that tax on their entire inventories of e-cigarettes, liquid cartridges and vaping devices within 90 days.
State Rep. Jeff Wheeland, of Lycoming County, recently proposed an amendment, House Bill 2342, that most vaping advocates have joined to support.
The bill, which passed through the House Finance Committee on Wednesday, would replace the 40 percent tax with a 5-cents-per-milliliter tax on vaping liquids, which has been implemented in North Carolina and Louisiana, according to memo sent by Wheeland.
Myers said Wheeland's proposal would allow him to stay open, which would ultimately be beneficial to the state's intentions of adding revenue.
The 40 percent tax is part of a $1.3 billion revenue package, which also included a tax increase on cigarettes, that Gov. Tom Wolf signed in July.
When asked whether Wolf would consider signing Wheeland's bill if it got to his desk, a spokesman from his office wrote in an email that it would be premature to comment before it passes the House or Senate.
Spokesman Jeffrey Sheridan did point out, though, that the budget agreement received bipartisan support.
"There was widespread support from all sides for an increased tax on e-cigarettes as part of a larger revenue package, including from Republicans and Democrats in the House and Senate," he wrote. "When the governor took office, he inherited a deficit of more than $2 billion and schools that were devastated from drastic funding cuts. Fixing the deficit and adequately funding our schools requires tough choices, and we are making significant progress."
Myers has already registered a business in Maryland, though, and said he'll be forced to sell his Hanover vape shop's inventory to that entity if nothing changes before Oct. 1.
"Forty percent of zero is zero," he said, pointing out that the state also would be losing his store's sales tax. "Shops are closing all over the state."
Myers found a sympathetic ear in state Rep. Kate Klunk, R-Hanover, who spoke at a rally Monday in support of Wheeland's bill.
Klunk is not on the list of cosponsors — which include local Reps. Seth Grove, R-Dover Township; Stan Saylor, R-Windsor Township; Kristin Phillips-Hill, R- York Township; and Keith Gillespie, R-Hellam Township — because she prefers no tax on the industry, but she said she will vote for it because she was told by Myers and others that it is their best chance at a compromise that allows the businesses to survive.
Both of Klunk's parents are longtime smokers — her father is dealing with throat and lung cancer — and she believes vaping is offering people a safer alternative, she said.
Klunk knows time is running out before the shops are hit with the tax, but she's hopeful the bill will move quickly through the House and Senate with no amendments, she said.
Michael Curry, owner of LifeSmoke Vapors in Springettsbury Township, has been preparing for the tax for nearly three months by minimizing inventory and not bringing in any new products.
Curry said his business, which has two York County locations and four total in the state, should be able to survive in the short term, but it will be in long-term trouble if the tax isn't repealed.
As it stands, even with an inventory less than half of what it had been, Curry's business stands to pay at least $60,000 in taxes come Oct. 1, he said.
"I think we can survive, but it'll be just that," he said. "There certainly won't be any expansion in terms of stores or employment."
Employment is the main worry for Myers, who currently employs four people with autism or other special needs.
"I have a big soft spot for individuals who are in a tough situation through no fault of their own," he said. "This is my way of giving back."
Myers also started his own line of e-liquid, called Purpose E-liquids, with a portion of all proceeds from that product going to various charities supporting breast cancer awareness and people with autism, epilepsy and special needs.
The new tax would force him to raise his prices, though, and he said he knows customers will just drive south to Maryland or go online to find cheaper options.
"I'm not in this for me," he said, adding that he makes about $400 per week working more than 80 hours. "I will do whatever I can to stand by these people."