Arkansas legislators are considering two bills that would implement a new tax on electronic cigarettes and vaping devices and increase the tax on combustible cigarettes. Unfortunately, draconian taxes on tobacco harm reduction products is a disservice to public health and negatively impacts small businesses. Instead, lawmakers should promote these products and not burden them with gratuitous taxes.
Currently, e-cigarettes and vaping devices are subject to Arkansas’ sales tax. Under tobacco taxes, “smoking tobacco, moist snuff, cigarettes and other tobacco are taxed” at 68 percent the manufacturer price. SB 347 would impose the same 68 percent tax on vaping devices to include “a vapor product or an e-liquid product.” The first $10 million in revenue generated by the tax will go to the University of Arkansas for Medical Science National Cancer Institute Designation Trust Fund. All other funds generated will be deposited in the Medical Sciences’ cash account.