States Look to Tax E-Cigarettes

SUNSET, Utah— Taking a long inhale and blowing a cloud of vapor, Jason Jones, who has owned the Vapor Mania store here since 2011, considered what a tax would do to his business, which includes selling electronic cigarettes as well as manufacturing a wide variety of flavored nicotine liquids to go into them.

“I think we’d be out of business, or at least it would make it much harder to do business,” said Jones, 34. “I think it would drive people back to cigarettes because they would be cheaper.”

With an eye on the twin concerns of public health and raising revenue, Utah is one of many states considering taxing electronic cigarettes, the battery-powered devices that deliver vaporized nicotine and provide the look and feel of smoking without the smoke and tar of traditional tobacco products. Gov. Gary Herbert, a Republican, sparked this year’s debate when he included a footnote in his budget counting on $10 million from taxing e-cigarettes.

“I feel strongly that we should tax electronic cigarettes similar to the way we tax other tobacco products,” said Herbert, calling it a “public health issue.” Herbert and supportive lawmakers say a tax would slow the growing use of electronic cigarettes while raising revenue for the state.

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