Clinton lawmaker poised to raise taxes on e-cigarette products

Friday , February 20, 2015 - 10:33 AM

SALT LAKE CITY -- A Davis County lawmaker is poised to unveil legislation to regulate and tax e-cigarette products on par with their tobacco counterparts.

Rep. Paul Ray, R-Clinton said Thursday that he expects his bill to get numbered and become public within a couple of days and the measure will essentially mirror regulations put in place by the Weber-Morgan Health Department last fall -- except for one significant difference.

Ray intends to levy an 86 percent tax on e-juice, atomizers and any equipment associated with e-cigarettes, which would place all of the items in the “other tobacco products” category.

“So I”m taking (Weber-Morgan’s) regulations and putting those into state regulation. Even the vapor people like those,” Ray said. “The part of the bill we’ll have a fight on is the tax increases.”

That dramatic price increase will put the products beyond the reach of youth under the age of 19, Ray hopes.

“Right now you have a tobacco product not being taxed. In Weber and northern Davis County, you’ve had a 500 percent increase of kids using e-cigarettes in the last couple of years,” Ray said. “It’s epidemic proportions -- 20 percent of all kids (between eighth and 12th grades) in Weber County use e-cigarettes, If we push the price point up through a tax, it makes it harder for these kids to get e-cigarettes.”

Ray expects the tax to bring in about $10 million in revenue, money he said his bill would reserve for school nurses, regulation enforcement and tobacco cessation programs.

Aaron Frazier, executive director of the Utah Smoke-Free Association, a nonprofit made up of member vaping businesses, said that Ray’s bill will have the opposite effect of what he intends.

“I see it as nothing more than a tax grab against an industry that the Governor and Ray see as an easy target,” Frazier said. With higher prices on e-cigarettes, “there will be no advantage for smokers to quit, so it protects cigarette smokers and harms the Utah public.”

Frazier also predicts that if Ray’s legislation passes, it will force about 45 “main street (vaping) businesses” to shut down because they can no longer compete globally.

“We’ve estimated that about 500 Utahns are employed in our industry statewide. It will put them out of work,” Frazier said.

The Weber-Morgan regulations currently in place ban self-service displays and vending machines and allow only direct, face-to-face sales of e-cigarette products It also prohibits all sales to minors, requiring anyone appearing to be under the age of 27 to show identification.

Area vaping shops must also obtain an Electronic Nicotine Delivery System (ENDS) retail permit in addition to a business license, and e-liquid manufacturing facilities must have a manufacturing endorsement from the Weber-Morgan Health Department along with their ENDS permit.

That endorsement establishes e-liquid production safeguards and also requires that e-liquid containers be leak-proof and have child-proof caps and labels that define nicotine content, ingredients, the vendor’s name, address and phone number, and a warning that states “Keep away from children.” It also sets maximum allowable nicotine content at 36 milligrams per milliliter or 3.6 percent by volume.

Contact reporter Cathy McKitrick at 801-625-4214 or Follow her on Twitter at @catmck.

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