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E-Cigarette Tax Fix Moves Forward In Kansas

A bill that will clarify how Kansas taxes electronic cigarette liquid gained approval Tuesday in the Kansas House.

The Kansas House voted Tuesday to substantially reduce a tax the state had struggled to enforce on e-cigarette liquid.

At the end of the historically long 2015 session, the Legislature approved a bill that included a 20-cent tax on the liquid used to create a vapor in electronic cigarettes. The tax technically came into effect at the start of 2017, but the Kansas Department of Revenue has yet to collect it due to confusion about whether the full volume of liquid or only the nicotine in it should be taxed.

This year’s legislative fix, Senate Bill 96, would lower the tax from 20 cents per milliliter to 5 cents per milliliter and authorize the revenue department to start collecting it on July 1. The Senate passed the bill unanimously and the House voted 123-2 in favor of it, although the House amended the bill so the Senate must concur or send it to a conference committee.

Vape store owners who already remitted some tax to the state will get a refund or a credit.

Spencer Duncan, who lobbies on behalf of vape shops, said the bill came out of a compromise between the industry and the state. The vape shop owners received the lower tax rate they wanted but gave ground on what substances will be taxed, he said. As the bill stands, liquids used in an e-cigarette will be taxed regardless of whether they contain nicotine.

“For now, (the bill) is just fine,” he said. “Like anything, over time, we’ll have tweaks.”

Testimony to committee

Robert Moser, president of the Kansas Public Health Association and former secretary of the Kansas Department of Health and Environment, testified in opposition to the billin February.

E-cigarettes haven’t been shown to be safe, Moser said, and maintaining a high tax could discourage young people from becoming addicted to nicotine.

“E-cigarettes are fairly new to the market and therefore do not have sufficient clinical research to prove their harm; however, early information and research on the harms of using other nicotine-based products indicate they are not safe, especially for children, adolescents and pregnant women,” he said in his written testimony.

Tom Rogers, co-owner of Lucky’s Convenience & Tobacco in Wichita, told the Senate committee considering the bill that many of his customers had used e-cigarettes to quit smoking.

“I urge each of you to talk with someone you know who vapes, as I do every day with our customers. I believe you’ll hear the same resounding support for the products from former smokers and even their physicians,”he said in his written testimony.

Some research has shown that e-cigarette users are exposed to lower levels of chemicals that can cause cancer than smokers are, but the long-term effects of vaping aren’t clear because most studies have followed users for less than two years.The differences among various brands and flavors of liquid further muddy the issue, as does the fact that some people use both e-cigarettes and tobacco.

Most states haven’t yet levied a tax on e-cigarettes,according to the Public Health Law Center. Approaches vary among those that do:

  • Louisiana: 5 cents per milliliter.
  • Minnesota: 95 percent of the wholesale price.
  • North Carolina: 5 cents per milliliter.
  • Pennsylvania: 40 percent of the price the retailer pays.
  • West Virginia: 7.5 cents per milliliter.

Still eyeing cigarette tax

Hilary Gee, Kansas government relations director for the American Cancer Society’s Cancer Action Network, said the group hasn’t taken a position on e-cigarette taxes in Kansas. But it is pushing for a $1.50 per-pack increase in cigarette taxes, which could come up in budget discussions, she said.

“Unfortunately, with something like a 50-cent (per-pack) increase, you don’t see the same health benefits” of smokers quitting, she said.

Rep. Henry Helgerson, a Democrat from Wichita, on Monday attempted to amend the e-cigarette bill to increase cigarette taxes by $1.50, with the extra revenue going to fund Kansas state employee pensions. The House voted down the amendment, which would have increased the cigarette tax to $2.79 per pack.

“This is one way of limiting individuals’ access to diseases and stopping people from getting addicted,” he said.

But Rep. John Carmichael, a Democrat from Wichita, said some people would go without other necessities, such as groceries for their families, because their addiction wouldn’t allow them to quit smoking.

“If you think taxing sick people is a really good idea, you should vote for this amendment,” he said.

Correction: An earlier version of this story misstated Rep. Carmichael's party affiliation.

Meg Wingerter is a reporter for the Kansas News Service, a collaboration of KCUR, Kansas Public Radio and KMUW covering health, education and politics in Kansas. You can reach her on Twitter @MegWingerter.