Vapers in Louisiana are about to feel the sting of a significant tax increase. A new law will triple the state’s vape tax overnight, raising costs for retailers and inflating prices for consumers.
Vaping’s Rising Popularity in Louisiana
The vaping industry has exploded in popularity nationwide over the last decade. This growth trend holds true in Louisiana. Vape shops are a common sight from New Orleans and Baton Rouge to smaller local communities.
According to recent surveys, vaping rates among Louisiana youth now outpace conventional smoking threefold. This rising trend has lawmakers concerned about teenage nicotine addiction.
In hopes of curbing underage use, Louisiana legislators passed a bill hiking taxes on all vape products containing nicotine. Governor John Bel Edwards signed the bill into law soon after.
Current Vape Taxes and Revenue
Louisiana currently taxes consumable vaping products at 5 cents per milliliter (ml) of nicotine liquid. This tax applies to items like vape juice, disposables, and cartridges.
Retailers pay the tax when purchasing wholesale vape inventory. They pass along the cost by raising consumer prices. A 1ml vape cartridge carries a 5 cent tax under the current rate.
This modest 5 cent tax brings the state approximately $5 million in annual revenue. But the new law will soon triple the rate.
New Law Increases Tax Rate Starting July 1st
Beginning July 1st, 2022, the Louisiana vape tax climbs from 5 to 15 cents per ml of nicotine fluid. This equates to a 15 cent tax on standard 1 ml cartridges.
Based on projections, the rate hike should generate around $9.8 million in additional annual tax revenue for Louisiana. Surplus funds may assist other health and safety programs if collections exceed $22 million.
This drastic overnight price increase aims to discourage vaping, especially among youth. But it also stands to impact many adult consumers.
Why Target Vaping with Steep Tax Increases?
Legislators pushed the law through based on public health concerns around teenage vaping. According to recent surveys, over 20% of Louisiana middle school students and 36% of high schoolers have tried vaping.
By using tax policy to drive up prices, lawmakers hope to curb access and make vapes less affordable for youth. But the impact on adult vapers raises questions.
Effects of Taxes on Adult Consumers
While increased prices may deter some teenagers, the tax hike also stands to negatively affect adult consumers who rely on vaping.
With a sudden 300% tax increase, retail prices will spike accordingly beginning July 1st. This could push some adult vapers to seek risky alternatives, like black market products.
Public health officials argue however that protecting youth outweighs the tax impact on consenting adults. But if prices climb too high, it could counterproductively lead to an uptick in cigarette sales.
Only time will tell whether the tripling of Louisiana’s vape tax actually discourages underage use without unduly burdening adults. One thing is certain – vaping in Louisiana is about to get more expensive.
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