UPDATE (5/22/2013): CASAA is disappointed to report that HF 677, which used the same tax language found in the below bills, passed the Minnesota Legislature. Minnesota's tax on e-cigarettes is now 95% wholesale price.
Minnesota: 95% Wholesale Tax on E-Cigarettes, Smokeless Tobacco, and Dissolvable Tobacco Products (HF 91 / HF 509 / SF 144 / SF 209)
In 2010, while e-cigarette advocates were busy fighting proposed bans on the sale of e-cigarettes, the Minnesota State Legislature quietly amended their tobacco tax statutes. The definition of "tobacco product" was changed so as to encompass any nicotine-containing product that is derived from tobacco. As of August of 2010, there has been a tax of 70% applied to the wholesale price of e-cigarettes with nicotine, as well as smokeless tobacco and dissolvable tobacco.
Minnesota is the only state in the United States to tax e-cigarette sales [for more details on the 2010 bill, see this ECF post].
HF 91, HF 509, SF 144, and SF 209 are all currently awaiting hearings before the House Committee on Taxes (HF 91), the House Committee on Health and Human Services Finance (HF 509), and the Senate Committee on Taxes (SF 144 and 209). If you are from the Minnesota area and think you could attend and testify at a legislative hearing on this subject, please e-mail us at email@example.com. In the meantime, the collective action of all vapers is needed to stop these tax increases.
House Bill 91 (HF 91): [full text] [legislative tracking]
House Bill 91 (HF 509): [full text] [legislative tracking]
Senate Bill 144 (SF 144): [full text] [legislative tracking]
Senate Bill (SF 209): [full text] [legislative tracking]
If enacted, any of these 4 bills would:
Increase the tax on "tobacco products" like e-cigarettes, smokeless tobacco, and dissolvable tobacco to 95% wholesale price.* That represents a 36% increase from the already excessive 70% wholesale tax imposed under the 2010 bill.
* This Call to Action previously indicated that the proposed tax was 110%. It's actually 95%.
Please call or write the members of the House Committee on Taxes, the House Committee on Health and Human Services Finance & the Senate Committee on Taxes below:
What to say:
1. You oppose HF 91 / HF 509 / SF 144 / SF 209 because the bills would further raise the arbitrary and counter-productive tax on products like e-cigarettes, smokeless tobacco, and dissolveable tobacco.
2. Tell your story on how switching to a smoke-free tobacco product has changed your life.
3. Explain that the purpose of increasing cigarette taxes has been to cover governmental healthcare expenditure caused by smoking and to discourage smoking. But since all smoke-free tobacco products are 98-99% less hazardous than cigarettes, there is no fiscal or public health justification for such a hefty tax.
4. Since many/most e-cigarette sales are made online, enactment of this legislation would send more e-cigarette consumers online to buy e-cigarettes. Convenience stores and brick-and-mortar stores in MN would be unable to compete against out-of-state and international online suppliers.
5. Highlight how Minnesota is the only state that taxes e-cigarettes, and that bills to do so in other states have failed in committee.
5. Many smokers who switch to less hazardous electronic cigarettes do so because e-cigarettes are less expensive than cigarettes. Increasing the costs of e-cigarettes to that of cigarettes would discourage many smokers from switching to e-cigarettes. It could also encourage some e-cigarette consumers to go back to cigarette smoking.
6. Remind them that under current law, Minnesota's cigarette tax is $1.23 per pack. If an e-cigarette retailer purchases a disposable e-cigarette for $4.00 at wholesale, the retailer currently pays a tax of $2.80 (70% of $4.00). Under HF 91 / SF 209, the tax would be $3.80 (95% of $4.00)! Ask them to explain why an e-cigarette user should pay a higher effective tax rate than cigarette smokers.
7. Ask them to consider introducing an amendment to modify Minnesota's definition of "tobacco product" so that the State no longer imposes any taxes on e-cigarettes.
House Committee on Health and Human Services Finance (to oppose HF 509) -- comma delimited list:
Senate Committee on Taxes (to oppose SF 144 & SF 209) -- comma delimited list:
Members of House Committee on Taxes (to oppose HF 91):