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WARNING: This product contains nicotine. Nicotine is an addictive chemical.

2020 Elections and two new nicotine taxes

2020 Elections and two new nicotine taxes

 

Overall, this year’s election was a fairly drug positive election. Many states decriminalized marijuana. Oregon went one step further and decriminalized possession of hard drugs as well. Unsurprisingly, a few pieces of legislation that affected vapes and how they are taxed were passed as well.

The two state laws that affect vapers are Prop EE in Colorado and Measure 108 in Oregon. 

Colorado - Prop EE

Proposition EE in Colorado has likely passed at the time of writing, with around 68% voting for the proposition and around 32% voting against it.

Previously, electronic cigarettes and components were untaxed, while cigars and cigarettes were taxed at 20%. Prop EE raises taxes for both tobacco products, and places electronic cigarettes in a category of nicotine vapor products.

Taxes on nicotine vapor products will start at 30% in 2021, and will raise over time. Taxes on tobacco products will be increased to 30% in 2021 and also raised over time as well. Both tobacco products and nicotine vapor products will be taxed similarly at 62% by July 2027.

A notable exception to the increasing nicotine taxes are products classified to be MRTPs, or Modified Risk Tobacco Products. They have a different set of tax rules and appear to be taxed less, with the final tax amount being 21% in July 2027. So far, the only MRTPs approved have been snus and IQOS. 

Oregon - Measure 108 

Oregon’s measure 108 is a 65% tax on all nicotine inhalant delivery systems and their components.

All components, from hardware to e liquids, are included in the tax. The tax even includes products that are not exactly vapes but close - particularly IQOS. CBD vapes, however, are protected from this tax, as they are not nicotine vapes.

Cigars and cigarettes will also be taxed at 65%, but the tax on cigars is capped at $1 per cigar. The tax on cigarette packs will be increased from $1.11 a pack to $3.33 a pack.

Both taxes are not fun, as tax increases are generally not fun for anyone. However, they have been put to vote, and the voters have approved of them, so they will happen.

References

Colorado Proposition EE, Tobacco and E-Cigarette Tax Increase for Health and Education Programs Measure (2020)

Proposition EE will raise taxes on tobacco products in Colorado — with one very big exception

Oregon Measure 108, Tobacco and E-Cigarette Tax Increase for Health Programs Measure (2020)



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