Vape shop calls tax 'pretty much a catastrophe'
Michael Curry is worried the $1.3 billion revenue package legislators passed Wednesday evening will put his life's work out of business.
The owner of Life Smoke Vapors said the amount of initial taxes this puts on vape shops' current inventory is too much and will run these stores down quickly.
"We're completely outraged," Curry said. "This is pretty much a catastrophe for us."
Wholesale tax: The new revenue package would put a 40 percent wholesale tax on e-cigarettes, liquid cartridges and "vaping" devices, according to the deal signed by Gov. Tom Wolf. It also would be an extension of wholesale taxes on roll-your-own tobacco.
The package includes a $1-per-pack increase on cigarettes, raising the tax from $1.60 per pack to $2.60 per pack. The revenue from this tax increase is expected to fund $495 million of the $1.3 billion package.
However, Curry said most vape and smoke shops aren't ready to handle such a big initial tax on current inventory.
The increased wholesale tax would be passed along to customers, which Curry said he believes would discourage some people from using an alternative to traditional tobacco.
"We've got a ton of customers relying on us," he said. "It might make it an easier choice for some people to smoke."
The revenue package — which also extends the state’s 6 percent sales tax to digital downloads of music, videos, games, books and apps — makes Pennsylvania the last state to impose a tax on smokeless tobacco.
Those in favor: Others, such as doctors and the American Cancer Society, are very supportive of the new taxes. The American Cancer Society hopes this new price will discourage people from smoking, simply because of the price.
“Lawmakers made a very strong statement that reducing tobacco use and, therefore, tobacco-related cancer diagnoses and deaths, is a priority in this state,” said Diane Phillips, American Cancer Society Cancer Action Network (ACS CAN) government relations director, in a news release. “This tobacco tax increase will protect Pennsylvania kids from becoming tobacco’s newest lifelong customers and save lives. ACS CAN is grateful to all the state lawmakers that supported this common sense public health policy.”
About 21 percent of adults in York County use tobacco, according to WellSpan Health. The American Cancer Society said this tax could save 32,200 lives in Pennsylvania and keep more than 48,100 kids from becoming addicted adult smokers. The tax increase is expected to help more than 65,600 adult smokers in Pennsylvania to quit.
“This increase in the price of tobacco will not only save lives but money too," said David Greineder, American Heart Association government relations director, in a news release. “Combined with at least $2.19 billion in long-term health care cost savings from the cigarette tax, the increases will have a tremendous positive impact both on the state budget and for health care consumers in Pennsylvania.”
The average cost of a pack of cigarettes in 2015 in Pennsylvania was about $7. With the new $1 tax increase, smoking a pack a day would cost around $2,900 a year.