Hawaii Passes Bill to Tax E-Cigarettes at the Same Rate as Tobacco

May.02.2023
Hawaii Passes Bill to Tax E-Cigarettes at the Same Rate as Tobacco
Hawaii's legislature passed a bill to tax e-cigarettes at the same rates as cigarettes, with a 70% wholesale tax.

On April 30th, the Hawaii State Legislature passed a bill (SB 975 SD2 HD3) related to electronic cigarette taxation. The bill proposes to impose the same tax rate on electronic cigarettes as traditional cigarettes, with a wholesale tax of up to 70%.


Currently, there is no tax imposed on e-cigarette products in the state of Hawaii. However, a proposed bill aims to categorize e-cigarette products as tobacco products. Bill 975 seeks to amend the definition of "tobacco products" in the Cigarette and Tobacco Tax Law to include e-cigarettes and e-cigarette liquids.


This means that electronic cigarette products will be subject to the same tax standards as tobacco products such as cigarettes. Tobacco or nasal snuff products in Hawaii will be subject to a state consumption tax of 70% of the wholesale price as well as federal consumption tax.


Furthermore, the bill proposes an increase in the licensing fees for distributors and retailers of cigarettes and tobacco products.


Before this year's legislative session ended, the bill was passed by both Hawaii House of Representatives and Senate.


If Governor Josh Green signs the bill, it will become law in the state of Hawaii and go into effect on January 1, 2024.


Earlier, according to a report by 2FIRSTS, two bills relating to electronic cigarettes in Hawaii were terminated in the legislative process and did not receive passage in the legislature.


The proposed Senate Bill 1447 suggests allowing each county to reintroduce its own tobacco regulations, with the aim of overturning the 2018 legislation of Hawaii. However, the bill was not scheduled for a hearing in the Hawaii Finance Committee (FIN) by April 6th, thus rendering the bill unable to move forward. The flavor ban on tobacco products bill (HB511) reintroduced by Hawaii lawmakers in 2023 was not scheduled for a hearing on March 23rd, indicating that the bill will not continue to advance in the state legislature.


The SB975 SD2 HD3 has become a bill that has been passed by both houses of Congress, but it is still uncertain whether it will become law.


In 2022, the bill to ban flavored e-cigarettes in Hawaii was vetoed by then-Governor David Ige. He did not support the ban on flavored tobacco and refused to sign the bill.


Further reading:


Hawaii to Reinstate Flavor Ban, Experts Say it May Lead to Increase in E-Cigarette Black Market.


The "flavor ban" in Hawaii, which aimed to restrict flavored tobacco products, did not pass the state legislature, while another anti-smoking bill has been added to the legislative agenda.


A new law in California will prohibit individuals born after 2002 from possessing, purchasing, or using tobacco or electronic cigarettes.


Hawaiian legislators introduce new electronic cigarette tax bill while original electronic cigarette regulation bill remains delayed.


References:


After a nine-year battle, advocates against vaping are celebrating as vape products will now be taxed at a level similar to tobacco. The victory has left them feeling overjoyed.



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