In his 2020-2021 budget plan, Governor Newsom revealed one of the highest taxes that could affect vaping yet. The new tax is set to begin on January 1, 2020, and will charge 5 cents for every milligram of nicotine in a product. To calculate the milligrams of nicotine in a bottle, multiply the labeled nicotine strength and the size of a bottle.
To show how high California’s tax would be, let’s compare how some sample costs with two other anti-vape states: New York and Ohio. New York taxes vape products at 20%. Ohio taxes vape products at 10 cents per milliliter.
|
Sample Base Cost |
California Tax |
New York Tax |
Ohio Tax |
|
|
120ml 6mg |
$20.00 |
$36.00 |
$4.00 |
$12.00 |
|
120ml 3mg |
$20.00 |
$18.00 |
$4.00 |
$12.00 |
|
120ml 0mg |
$20.00 |
$0.00 |
$4.00 |
$12.00 |
|
60ml 6mg |
$15.00 |
$18.00 |
$3.00 |
$6.00 |
|
60ml 3mg |
$15.00 |
$9.00 |
$3.00 |
$6.00 |
|
60ml 0mg |
$15.00 |
$0.00 |
$3.00 |
$6.00 |
|
30ml 30mg |
$15.00 |
$45.00 |
$3.00 |
$3.00 |
|
30ml 50mg |
$15.00 |
$75.00 |
$3.00 |
$3.00 |
Wow. Under Newsom’s new tax rules, the tax on a 30ml, 50mg nicotine salt would cost more than most mods. Although a nicotine tax could encourage vapers to reduce nicotine intake over time, a tax at this expense is more likely to discourage any vaping altogether, even from current smokers. Right now, the most expensive part of switching over to vaping is the purchase of a proper setup. With California’s new taxes, the most expensive part would be figuring out what juice works for you.
The need to maintain coils or pods, the steeper learning curve of vaping, and a potential gigantic cost increase would deter even smokers away from vaping. However, killing vaping entirely seems to be the administration’s plan, rather than profiting off of vape. Included in the budget plan are the following statements:
“Revenues from the new tax are expected to be $32 million in 2020-21, will be deposited into a new special fund, and will be used for administration...”
“In addition to the tax, the Administration will support a statewide ban of all flavored nicotine products as of January 1, 2021.“
If that happens, Newsom is planning to make $32 million off of taxing unflavored vape.
Most dangerously, this turns vape into an expensive commodity that would be extremely attractive to the black market, especially in California where a black market is already a strong competitor to another overtaxed industry.
While cannabis is legal, anything cannabis related is highly taxed and very expensive. As a result, the cannabis black market is still thriving despite legalization and the alarm around illegal THC cartridges. If nicotine becomes too expensive for vapers to buy, then nicotine will become another drug that rises in popularity on the black market.
References:
Journey of a Tainted Vape Cartridge: A Leafly Investigation
Governor's Budget Summary 2020-21
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