Currently, the United States does not impose federal taxes on e-cigarette products, but each state has implemented its own e-cigarette tax policy. As of early 2024, a total of 32 states, the District of Columbia, Puerto Rico, and some cities have taxed e-cigarette products. Here is a detailed overview of U.S. state tax policies:
1. California
California’s wholesale tax on “other tobacco products” is determined annually by the state’s Fair Political Practices Commission. It reflects a percentage of all taxes levied on cigarettes. Originally equivalent to 27% of wholesale costs, e-cigarette taxes increased significantly after Proposition 56 raised the cigarette tax from $0.87 to $2.87 per pack. Effective July 1, 2023, the tax rate on all nicotine-containing products will be 56.32% of wholesale cost.
On July 1, 2022, California added a retail tax to the existing wholesale tax, imposing a 12.5% tax on all nicotine-containing e-cigarette products, including products purchased online from retailers in other states.
2. Colorado
Colorado’s e-cigarette tax was approved by voters in 2020 and takes effect in 2021. It will initially be 30%, increase to 35% in 2022, 50% in 2023, and 56% in 2024. It is expected to increase by 2020. Reach 62% by 2027.
For products granted Reduced Risk Tobacco Product (MRTP) status by the FDA, there is a 50% tax reduction (although no liquid e-cigarette product manufacturer has yet applied for MRTP authorization).
3. Connecticut
The state imposes a two-tier tax on nicotine-containing e-cigarette products: $0.40 per milliliter of e-liquid for closed-system products, and a 10% wholesale tax on open-system products (including bottles of e-cigarette liquid and open devices).
4.Delaware
A tax of $0.05 per milliliter is imposed on e-liquids containing nicotine.
5. Georgia
There is a $0.05 per milliliter tax on e-liquids for closed system products and a 7% wholesale tax on open system devices and bottled e-liquids. The tax applies to products with or without nicotine.
6.Hawaii
All e-cigarette products are subject to a 70% wholesale tax.
7. Illinois
All e-cigarette products are subject to a 15% wholesale tax, regardless of whether they contain nicotine. In addition to the statewide tax, Cook County and the city of Chicago (in Cook County) have their own e-cigarette taxes:
- Chicago imposes a $1.50 per unit tax on any nicotine-containing vaping product (bottled e-liquid or prefilled device) and a $1.20 per milliliter tax on the oil itself (vapers in Chicago must also be Cook County Pay tax of USD 0.20 per ml). Due to high taxes, some in Chicago sell zero-nicotine e-liquid and DIY nicotine to escape the high taxes.
8. Indiana
A 15% tax on gross retail sales of all e-cigarette products,
regardless of nicotine content.
9.Kansas
All e-liquids are taxed at $0.05 per milliliter. The tax applies to products with or without nicotine.
10.Kentucky
There is a 15% wholesale tax on bottled e-liquids and open system devices, and a $1.50 per unit tax on prefilled pod devices and pods. The tax applies to products with or without nicotine.
11. Louisiana
A tax of $0.15 per milliliter is imposed on e-liquids containing nicotine.
12. Maine
All e-cigarette products are subject to a 43% wholesale tax. The tax applies to products with or without nicotine.
13. Maryland
A 6% retail tax is levied on all open e-cigarette products (including nicotine-containing e-liquid), and a 60% tax is levied on nicotine-containing e-liquid in containers with a capacity of 5 ml or less (cartridge or disposable) .
In addition to state taxes, Montgomery County imposes a 30% wholesale tax on all e-cigarette products, including devices that do not contain e-cigarette oil.
14. Massachusetts
All e-cigarette products are subject to a 75% wholesale tax. The tax applies to products with or without nicotine. State law requires consumers to provide proof that their vaping products have been taxed or they will be confiscated and subject to fines of $5,000 for a first offense and $25,000 for subsequent offenses.
15. Minnesota
In 2011, Minnesota became the first state in the United States to tax e-cigarettes. The tax was initially 70% of the wholesale cost and later increased to 95% of the wholesale cost. For bottles of e-liquid produced in Minnesota, only the nicotine itself is taxed.
16.Nebraska
Nebraska has a two-tiered tax based on the size of the e-liquid container (or prefilled e-cigarette). For products containing less than 3 ml of e-liquid, the tax is US$0.05 per ml. Products 3ml and above are subject to a 10% wholesale tax. The tax only applies to products containing nicotine. In addition to state taxes, Omaha’s vaping products are subject to a 3% tobacco tax.
17. Nevada
All e-cigarette products are subject to a 30% wholesale tax. The tax applies to products with or without nicotine.
18. New Hampshire
An 8% wholesale tax is levied on open system e-cigarette products (including nicotine-containing e-cigarette oil) and a wholesale tax of $0.30 per milliliter on closed system products.
19. New Jersey
New Jersey imposes a $0.10 per milliliter tax on nicotine e-liquid, a 10% tax on the retail price of bottled e-liquid, and a 30% tax on devices.
20. New Mexico
New Mexico imposes a two-tier tax on e-cigarette oil: a 12.5% wholesale tax on bottled e-cigarette oil and a $0.50 tax on each disposable e-cigarette or cartridge with a capacity of less than 5 milliliters. The tax applies to products with or without nicotine.
21. New York
All e-cigarette products are subject to a 20% retail sales tax. The tax applies to products with or without nicotine.
22. North Carolina
A tax of $0.05 per milliliter is imposed on e-liquids containing nicotine.
23. Ohio
A tax of $0.10 per milliliter is imposed on e-liquids containing nicotine.
24. Oregon
A 65% wholesale tax is imposed on all non-cannabis “inhalation delivery systems,” including hardware and its “components” (including e-liquids). The tax also covers heated tobacco products such as IQOS, but does not apply to all vaping products sold by licensed cannabis dispensaries. The tax applies to products with or without nicotine.
25. Pennsylvania
A 40% wholesale tax is imposed on e-cigarette oil and equipment containing e-cigarette oil. The tax applies to products with or without nicotine.
26. Utah
A 56% wholesale tax is levied on e-cigarette oil and pre-filled e-cigarettes. The tax applies to products with or without nicotine.
27. Vermont
A 92% wholesale tax is imposed on e-cigarette oil and equipment. The tax applies to products with or without nicotine.
28. Virginia
A tax of $0.066 per milliliter is levied on e-liquids containing nicotine.
29. Washington
A tax of US$0.27 per milliliter is levied, and for volumes exceeding 5 ml, a tax of US$0.09 per ml is levied. The tax applies to products with or without nicotine.
30. West Virginia
All e-liquids are taxed at $0.075 per milliliter. The tax applies to products with or without nicotine.
31. Wisconsin
The tax of $0.05 per milliliter is only imposed on e-liquids in closed system products. The tax applies to products with or without nicotine.
32. Wyoming
A 15% wholesale tax is imposed on all vaping devices and nicotine-containing e-liquids.
33. District of Columbia
The U.S. Capitol classifies e-cigarettes as “other tobacco products” and taxes them at a rate tied to the wholesale price of cigarettes. Currently, the tax is 91% of the wholesale cost of e-cigarette equipment and nicotine-containing e-liquids.
34.Puerto Rico
E-cigarette oil is taxed at $0.05 per milliliter and $3 per unit per e-cigarette.
35.Alaska
Alaska has no state tax on e-cigarettes, but some cities in the state are imposing taxes:
- Juneau, the Northwest Arctic and Petersburg impose a 45% wholesale tax on nicotine-containing products.
- Anchorage imposes a 55% wholesale tax.
- The Matanuska-Susitna Borough imposes a wholesale tax of 55%.
Post time: Apr-03-2024
