Alaska Senator, Sen. Stevens, attempted to set up a vape tax for the third time with Senate Bill 89, introducing a 25% wholesale tax on vaping products and raising the minimum age for buying vapes to 21. However, Gov. Mike Dunleavy vetoed this yet again. Similarly, with Senate Bill 45 in 2022, a 35% wholesale vape tax was proposed, which was also opposed by Dunleavy.

In Canada, a vape tax is already in place, with the Canadian Vape Association recently suggesting that the tax removes the incentive for smokers to switch to a cheaper and safer alternative to smoking. Similarly, tobacco control experts Dr. Kenneth Warner and Cliff Douglas discussed Canada’s upcoming national excise tax and how it could potentially be a major public health mistake.

Meanwhile, Hawaii recently passed Senate Bill 975, a proposal for tax on vaping products, similar to the tax system for other tobacco products. The bill will be signed into law by Gov. Josh Green and will go into effect on July 1.

What do studies reveal about the impact of vape and tobacco taxes?

Several studies show that higher vape tax rates lead to a reduction in vaping and increased usage of traditional cigarettes, and vice versa. For example, a recent study looking into the potential effects of tobacco taxes in Argentina found that the increase would generate job shifts from tobacco sectors to other sections of the economy and improve public health. Another study found that setting tax on vaping products leads to an increase in cigarette sales, with the burden of the tax placed mostly on consumers.

Further, data indicates that vapes and cigarettes are economic substitutes, so an increase in one’s consumption leads to a decrease in the consumption of the other. Studies further establish that an increase in vaping prices results in a switch back to smoking cigarettes.