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NJ E-Cigarette Tax Hike Bill Advances [AUDIO]

A 75 percent tax would be imposed on electronic cigarettes under a new bill approved Monday by the state Senate Health Committee, but that’s only the tip of the iceberg.

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E-Cigarettes
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The tax on traditional cigarettes would remain unchanged at $2.70 per pack, but the legislation was amended so that the existing tax on most other tobacco products would more than double.

“This would be an additional increase on top of the 7 percent (state sales tax),” said David Sutton, senior manager of media relations with tobacco company Altria. “It wouldn’t go away, so what you effectively have there is double taxation. It will certainly incentivize the consumer to look for other places to purchase the product to avoid this very, very excessively high tax.”

The e-cigarette tax is expected to raise $35 million in revenue. The amended version of the measure would also raise a predicted $22 million more by increasing the tax on almost all other tobacco products from 30 to 68 percent. The new tax on cigars would be $2.70 for each cigar; 54 cents for each cigarillo; little cigars would be taxed at a rate of 13.5 cents each; the moist snuff tax would be $2.25 per ounce, up from 75 cents per ounce; single-dose smokeless tobacco products would be taxed at 13.5 cents for each dose; and smokeless tobacco would be taxed at $4.15 per ounce.

“There are sin taxes and there are sin taxes, and this is one of them,” said bill co-sponsor, Sen. Joe Vitale (D-Woodbridge). “It’s to raise money for addiction research, for addiction treatment and for prevention. What we’re doing with e-cigarettes, particularly those companies, they’re addicting an entirely new generation of people.”

It is Vitale’s hope that most, if not all of the additional $22 million in revenue generated by expanding the bill could be dedicated to the New Jersey Commission on Cancer Research, control and cessation programs, state poison control, substance abuse prevention programs, and funding for opioid antidote distribution.

“Any attempt to raise revenue by changing the current tax rate on e-cigarettes must be weighed against the decline in sales tax revenues that would occur as a result,” said Sal Risalvato, executive director of the New Jersey Gasoline, Convenience Store, and Automotive Association in a statement. “The sponsors and the administration projected that this e-cigarette tax would raise $35 million in revenue for the state, but I have not seen or heard one report which supports that claim.”

The bill cleared the health committee with a vote of 5-2-2. It now heads to the Senate budget panel for consideration.

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