Carolina Lawmakers Adopt Tax On Electronic Cigarettes
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[May 30, 2014]
By Marti Maguire
RALEIGH N.C. (Reuters) - North Carolina,
the top U.S. tobacco-producing state, will levy a modest tax on
increasingly popular electronic cigarettes as part of legislation
adopted by state lawmakers and signed by the governor on Thursday.
Republican Governor Pat McCrory signed a measure that adds a tax
of 5 cents to each milliliter of the nicotine liquid that
e-cigarettes use. Smokers inhale through a battery-powered metal
tube, turning the liquid to vapor.
The tax was cleared by the state Senate and House in bipartisan
votes earlier on Thursday.
Sales of e-cigarettes have grown dramatically and are expected to
surpass traditional cigarette sales within a decade, yet they remain
largely unregulated. Several states have considered taxing them at a
rate much higher than 5 cents, on a level that is similar to
traditional cigarettes. So far, only Minnesota has adopted such a
North Carolina taxes traditional cigarettes at 45 cents per pack.
Large tobacco companies including Reynolds American Inc, which is
based in Winston-Salem, North Carolina, supported the 5-cent tax as
they seek to replace the declining market for traditional
The measure's supporters highlighted what they claimed are the
health benefits of e-cigarettes.
“Tobacco and vapor products have vastly differing health impacts,
manufacturing processes and business models,” Representative Ruth
Samuelson, a sponsor of the bill, said in an email on Thursday. “In
light of this, we must ... draw a clear distinction between how
North Carolina treats tobacco products and vapor products.”
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Opposition to the tax has come from both Democrats and Republicans.
Some Democrats argued that e-cigarettes should be taxed at a higher
rate, or that the state should wait to decide how to tax them until
the U.S. Food and Drug Administration unveils regulations on
e-cigarettes that are expected this summer.
Others said there should be no tax at all on a product that has been
touted as a less harmful alternative to regular cigarettes.
“It makes little sense in this fragile economy to impose higher
taxes on a product that provides consumers a viable and harmless
alternative to traditional tobacco products,” Grover Norquist,
president of Americans for Tax Reform, wrote in a letter to state
(Editing by Colleen Jenkins and Matthew Lewis)
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