Tuesday, April 9, 2013

Call to Action! Oklahoma Bill to Tax E-Cigarettes and More -- SB 802 (DEFEATED)

***URGENT UPDATE (4/15/2013) -- A New Threat to Oklahoma E-Cigarette Consumers***
UPDATE (4/09/2013) CASAA would like to thank the numerous individuals who attended the rally and hearing today.  The members of the House Public Health Committee ultimately voted to kill the entire bill.   

On Saturday, the Daily Caller published a piece by Matthew Bandyk on SB 802 that quoted CASAA Legislative Director Gregory Conley and Smokefree Pennsylvania's Bill Godshall.  The Washington Examiner's Timothy Carney also wrote about the bill. 


[full text of SB 802]  
[full text of proposed committee amendment]
[legislative tracking]

If enacted, this bill would:
  • Ban e-cigarette sales to minors, but would also...
  • Tax sales of “vapor products” (e-cigarettes and cartridges) and “tobacco-derived products” (e-liquid and cartomizers containing nicotine) at 5 cents per 1.48 ml of liquid.
  • Require e-cigarette retailers to obtain a license to sell tobacco products and abide by 30+ pages of regulations governing how tobacco products are sold. 
  • Make it a criminal offense for consumers to buy e-cigarettes online


SB 802 has been scheduled for a hearing on Tuesday, April 9th at 1:30 pm at the State Capitol Building in Oklahoma City (address information).  Vapers will be holding a rally outside the capital beginning at 9 am!  CASAA is requesting that all vapers attend and testify in opposition.  Please e-mail us at board@casaa.org if you plan to attend.

RJ Reynolds lobbyists have told vapor store owners in Oklahoma that SB 802 would represent a tax cut for their business and their customers.  In short, their argument has been that by instituting a small excise tax on e-cigarette products containing nicotine, vapor product users would no longer have to pay the 4.5% sales tax that is levied on sales of all consumer goods. 

The truth is that SB 802 would be a TAX HIKE for the multitude of Oklahoma residents who use e-liquid in their products.  The members of the House Public Health Committee need to hear this.

Currently, an Oklahoma citizen who buys any product in a brick & mortar vaping store pays a 4.5% sales tax (the same tax as if you buy a stereo, DVD, or iPad).  RJR claims that if SB 802 is passed, the sales tax would be replaced with a 5 cent tax applied to every "vapor product unit." A "vapor product unit" would be defined as approximately .05 oz of 'consumable material' (the equivalent of 1.48 ml of e-liquid).

In real-world terms, this means that a 30 ml bottle of e-liquid that currently incurs a 77 cent sales tax would instead be subject to a sales tax of $1.00 - $1.05.  That's a tax increase of 30%!  

Enactment of SB 802 would only benefit RJ Reynolds and other companies that sell or plan to sell disposable e-cigarettes (none of which hold a significant amount of e-liquid).  If RJ Reynolds sold its Vuse e-cigarette in Oklahoma for $10 today, it would be subject to a sales tax of 45 cents.  Vuse almost undoubtedly holds less than 1.48 ml of consumable material, so under SB 802, customers of a RJ Reynolds product would only pay 5 cents.
Additionally, as Americans for Tax Reform noted in a letter to members of the Public Health Committee, it "remains unclear" whether SB 802 would actually remove the requirement that sales tax be paid on e-cigarette purchases.  The Oklahoma law at issue (68 O.S. 2001, §1355) does not require sales tax to be paid on "cigarettes and tobacco products."  However, SB 802 specifically notes that 'vapor products' and 'tobacco-derived products' are NOT 'tobacco products.' 

This is bad legislation, and unless substantially amended, should be rejected. 


UPDATE (4/2/2013): 

RJ Reynolds (which makes Camel cigarettes, snus, dissolvables, etc. and will soon be marketing its own e-cigarette) is continuing to push for this bill.  RJ Reynolds has even put up a website encouraging Oklahoma tobacco consumers to support SB 802.  Why is Reynolds encouraging Oklahoma legislators to make it harder for Oklahoma e-cigarette stores to buy product?  Why is Reynolds trying to ban Internet sales?  Simple -- it will benefit RJ Reynolds by making it harder for adult consumers to purchase premium e-cigarettes.   

RJ Reynolds has its lobbyists out every single day fighting for SB 802 to pass.  This is why we need a strong, continuing response from Oklahoma vapers.  Please continue to contact the members of the House Public Health Committee with a simple message -- YES on banning sales to minors, NO on creating new taxes, NO on licensing, NO on Internet sales bans, and NO on supporting this cynical ploy by RJ Reynolds to snuff out competition. 

A new strategy being employed by supporters of SB 802 is to claim that SB 802 would actually represent a tax cut for Oklahoma citizens.  This is because e-cigarette sales are currently subject to Oklahoma's state sales tax.  If SB 802 is enacted, e-cigarettes sales would no longer be subject to this tax. However, sales of e-liquid would incur a tax increase (see 4/7/2013 Update). 

Thus, CASAA continues to oppose SB 802, and we encourage all of our Oklahoma members to do the same. 


As introduced by Senator Rob Johnson, SB 802 was 4 pages long and did not mention e-cigarettes once.  Without informing e-cigarette consumers and retailers, Senator Johnson introduced a 34-page substitute bill that would apply nearly every Oklahoma law regarding the sale of cigarettes to the sale of “vapor products” and “tobacco-derived products.” Because SB 802, as introduced, would not have impacted e-cigarettes, CASAA did not become aware of SB 802 until after it had already passed the Oklahoma Senate.

Worse, Senator Johnson has been spreading lies and misinformation about e-cigarettes.  For example, Senator Johnson has claimed that the reason e-cigarettes are sold in malls is to attract children.  (In Senator Johnson's defense, he has been an avid proponent of tobacco harm reduction.)

SB 802 is now awaiting a hearing before the Oklahoma House Public Health Committee.  
If you may be able to testify against this bill at a committee hearing in Oklahoma City, OK, please email us at board@casaa.org.  

Please call or write members of the House Public Health Committee below 

1. Inform them that while you support banning e-cigarette sales to minors, SB 802 goes too far by imposing an unwarranted sin tax on e-cigarette sales, mandating retailer licensing, and prohibiting consumers from buying e-cigarettes online.

2. Tell your story on how switching to an e-cigarette has changed your life.

3. Inform the legislators that by taxing vapor product liquid at 5 cents per 1.48 ml of liquid, you would see your taxes INCREASED if SB 802 is enacted.  In fact, a consumer buying a 30 ml bottle of e-liquid for $17 would see their tax liability raise approximately 30%!

4. Explain the vast majority of SB 802 is unnecessary and will have unintended consequences on Oklahoma-based small businesses and Oklahoma e-cigarette users.

5. Suggest that instead of taxing e-cigarettes and nicotine-containing products, the Public Health Committee instead amend Oklahoma’s tax statutes to make clear that there is to be NO tax imposed on these products.  Oklahoma vapers do not oppose continuing to pay sales taxes on e-cigarettes (as they do with thousands of consumer goods they purchase every year).

6. Note that the citizens of Oklahoma do not support new taxes and burdensome regulations. Further explain that imposing such wide-ranging laws on e-cigarette sales only serves to protect cigarette markets and will hurt small businesses in Oklahoma.

7. Explain that there is no evidence that any significant number of youth are using e-cigarettes, let alone buying them on the Internet.  A recent survey of 228 adolescents that was published in the Journal of Adolescent Health did not find a single nonsmoking youth who had even tried an e-cigarette.

8. Inform them that SB 802 would not only require e-cigarette sellers to obtain a license to sell tobacco, but would also mandate that the only buy their products from an Oklahoma-based distributor or wholesaler.  This provision would impact the availability of hundreds of speciality e-cigarette products, as there are no Oklahoma businesses wholesaling these products.

8. Direct them to the CASAA.org website for more information.

House Committee on Public Health -- Who to Contact

Rep. David Derby (Chairman) (R)
2300 N. Lincoln Blvd.
Room 408
Oklahoma City, OK 73105
(405) 557-7377
Email: david.derby@okhouse.gov

Rep. Glen Mulready (Vice-Chairman - R)
2300 N. Lincoln Blvd.
Room 338
Oklahoma City, OK 73105
(405) 557-7340
Email: glen.mulready@okhouse.gov

Rep. Doug Cox (R)
2300 N. Lincoln Blvd.
Room 331
Oklahoma City, OK 73105
(405) 557-7415
Email: dougcox@okhouse.gov

Rep. Jon Echols (R)
2300 N. Lincoln Blvd.
Room 316
Oklahoma City, OK 73105
(405) 557-7354
Email: jon.echols@okhouse.gov 

Rep. John Enns (R) 
2300 N. Lincoln Blvd.
Room 434
Oklahoma City, OK 73105
(405) 557-7321
Email: john.enns@okhouse.gov

Rep. Randy Grau (R)
2300 N. Lincoln Blvd.
Room 537A
Oklahoma City, OK 73105
(405) 557-7360
Email: randy.grau@okhouse.gov

Rep. Rebecca Hamilton (D)
 2300 N. Lincoln Blvd.
Room 510
Oklahoma City, OK 73105
(405) 557-7397

Email: rebeccahamilton@okhouse.gov

Rep. Arthur Hulbert (R)
2300 N. Lincoln Blvd.
Room 321
Oklahoma City, OK 73105
(405) 557-7310

Email: arthur.hulbert@okhouse.gov

Rep. Jeannie McDaniel (D)
2300 N. Lincoln Blvd.
Room 508
Oklahoma City, OK 73105
(405) 557-7334

Email: jeanniemcdaniel@okhouse.gov
Rep. Mike Ritze (R)
2300 N. Lincoln Blvd.
Room 303A
Oklahoma City, OK 73105
(405) 557-7338
Email: mike.ritze@okhouse.gov

Rep. Mike Shelton (D)
2300 N. Lincoln Blvd.
Room 539
Oklahoma City, OK 73105
(405) 557-7367
Email: mikeshelton@okhouse.gov

Comma delimited list:
david.derby@okhouse.gov, glen.mulready@okhouse.gov, dougcox@okhouse.gov, jon.echols@okhouse.gov, john.enns@okhouse.gov, randy.grau@okhouse.gov, rebeccahamilton@okhouse.gov, arthur.hulbert@okhouse.gov, jeanniemcdaniel@okhouse.gov, mike.ritze@okhouse.gov, mikeshelton@okhouse.gov


Strick Nyne said...

Mailed them all Thanks for the bulk e-mail list!!!

Jennifer Askew said...

The bulk email list does help in addressing the email. I just sent my email off as well. I hope they will take my email into consideration even though I am not a resident of Oklahoma.

Carmen B said...

Emailed all on the list and my Rep, and received a reply from Rep. McDaniel stating "thanks, I agree".

Katt Smith said...

Thank you for the Bulk email list!!!

Erik Hauck said...

Thank you sooooooo much for the means to contact my reclusive representatives about this ludicrous law!

Alicia C said...

Thank you... HUGE issue to me, as well! I sent in my opinions to all of them, and sent emails to friends and family encouraging them to do the same, and hoping some in the OKC area may even be able to attend!

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