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New Jersey Considers Taxing E-Cigarettes as Traditional Cigarettes

Legislation also would expand the cigarette tax to cigars and other tobacco products.
May 21, 2014

​TRENTON, N.J. – N.J. Gov. Chris Christie has proposed taxing electronic cigarettes at the same rate as traditional cigarettes, and state lawmakers are taking that one step further by considering adding the same tax to cigars, smokeless tobacco and other tobacco products, NJ Spotlight.com reports.

E-cigarette and tobacco wholesalers, retailers and consumers are expressing their opposition to the bill (S-1867), while public health advocates applaud the measure. Both sides point to the doubt about e-cigarettes as bolstering their arguments.

The governor’s planned tax hike on electronic cigarettes would generate $35 million for the next fiscal year, which starts July 1. However, state Sens. Joseph Vitale and Richard Codey have put forth a bill that would also add the tax to other tobacco products, which would bring in an additional $22 million. The Senate bill would designate those funds for smoking cessation, prevention and control programs, as well as drug abuse treatment and prevention and research on cancer.

Members of the New Jersey Gasoline Convenience Automotive Association opposed adding e-cigs under the state’s cigarette tax because of the upswing in e-cigarette sales. “They have always used tobacco products as an important profit center,” said Sal Risalvato, executive director of the association.

New Jersey’s cigarette tax stands at $2.70 per pack, which translates to 75% of the wholesale price. That would mean e-cigarettes would be taxed at 75% of the wholesale cost.

Last month, the U.S. Food and Drug Administration said it expected to release proposed rules on electronic cigarettes “very soon.” Meanwhile, NACS is urging retailers to treat e-cigarettes as any other tobacco product and follow appropriate age-restrictions when selling the product.