How Much Is California Vape Tax? A Quick Guide to Understanding the State’s Vaping Tax Laws

If you’re a vaper in California, you may be wondering how much you’re paying in taxes for your e-cigarettes and vaping products. The answer to this question depends on a few factors, including the type of product you’re using and where you purchased it. In this article, we’ll break down the California vape tax and help you understand what you’re paying and why.

Starting July 1, 2022, all nicotine-containing vaping products sold in California are subject to a 12.5% excise tax, in addition to the existing wholesale tax. This tax applies to all retailers, regardless of whether they are located in-state or out-of-state. The tax is calculated based on the retail selling price of the product, which means that the more expensive your vaping device or e-juice, the more you’ll pay in taxes.

It’s important to note that the California vape tax is just one of many taxes that vapers may be subject to. Depending on where you live, you may also be subject to local sales taxes, which can add even more to the cost of your vaping products. By understanding how much you’re paying in taxes, you can make informed decisions about which products to buy and where to buy them from.

Understanding Vape Tax

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If you’re a vaper in California, you might be wondering how much you’re paying in taxes on your favorite e-juice or vape device. The answer is that it depends on a few factors, including the type of product you’re buying and where you’re buying it from.

California has implemented an electronic cigarette excise tax (CECET) that requires retailers to collect an additional 12.5% tax on all disposable vape and e-cigarette products. This tax went into effect on July 1, 2022, and applies to all electronic cigarettes that contain or are sold with nicotine at the time of sale.

In addition to the CECET, California also taxes vapor products at 59.27% of wholesale value. This means that if you’re buying a vape device or e-juice in California, you’re likely paying a significant amount in taxes.

It’s worth noting that other states have also implemented taxes on vaping products. As of July 1, 2023, Louisiana has the highest rate per mL in the country, after tripling its rate from $0.05 per mL to $0.15 per mL. The following map shows where state vapor taxes stand as of July 1, 2023:

Vapor products can deliver nicotine, the addictive component of cigarettes, without the combustion and inhalation of tar that come with smoking cigarettes. However, the long-term health effects of vaping are still being studied, and many health experts are concerned about the potential risks associated with vaping.

If you’re a vaper in California, it’s important to be aware of the taxes you’re paying on your vaping products. While these taxes may be high, they are intended to discourage young people from taking up vaping, and to help offset the costs associated with the potential health risks of vaping.

California’s Vape Tax Rates

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If you’re a vaper in California, you’re probably wondering how much you’ll have to pay in taxes for your favorite e-juice. As of July 1, 2022, California added a retail tax of 12.5 percent in addition to raising its tax to 61.74 percent on wholesale transactions, making it one of the highest vape tax rates in the country.

The California Electronic Cigarette Excise Tax (CECET) was introduced on July 1, 2022, which requires retailers of electronic cigarettes to collect from the purchaser at the time of sale the California Electronic Cigarette Excise Tax at the rate of 12.5 percent of the retail selling price of electronic cigarettes. This tax applies to both in-state and out-of-state retailers.

In addition to the CECET, California currently taxes vapor products at 59.27 percent of wholesale value. However, there is a proposal to impose an additional tax at a rate of $2 for each 40 milligrams of nicotine in the product, which is forecasted to raise $32 million in FY 2021. Collections would be allocated to administration.

It’s important to note that the tax rate on other tobacco products (products other than cigarettes) in California is equivalent to the combined rate of tax imposed on cigarettes, which is currently at 61.74 percent effective July 1, 2022, through June 30, 2023.

Overall, California’s vape tax rates are among the highest in the country, which may impact the affordability of vaping products for consumers.

Impact on Consumers

Financial Implications

If you are a consumer of vaping products in California, you will be affected by the state’s vape tax. As of July 1, 2022, retailers of electronic cigarettes (in-state or out-of-state) are required to collect from the purchaser at the time of sale the California Electronic Cigarette Excise Tax (CECET) at the rate of 12.5 percent (12.50%) of the retail selling price of electronic cigarettes containing or sold with nicotine. This means that the price of vaping products will increase by 12.5% due to the tax.

In addition, California currently taxes vapor products at 59.27 percent of wholesale value. The state has also proposed an additional tax at a rate of $2 for each 40 milligrams of nicotine in the product. This tax is forecasted to raise $32 million in FY 2021 and would take effect on January 1, 2021. These taxes will likely increase the cost of vaping products for consumers.

Health Considerations

While the financial implications of the vape tax are clear, there are also health considerations to keep in mind. Vapor products can deliver nicotine, the addictive component of cigarettes, without the combustion and inhalation of tar that come with smoking cigarettes. However, vaping products still contain chemicals and other substances that can be harmful to your health.

According to the California Department of Public Health, vaping can cause lung damage, heart damage, and other health problems. Additionally, the use of vaping products by young people has become a significant concern in recent years. The state has approved a new 12.5% excise tax on electronic cigarettes to be paid by California consumers to boost public health programs and curb teen use.

In summary, the vape tax in California will have financial implications for consumers, as the cost of vaping products will increase due to the tax. Additionally, there are health considerations to keep in mind when using vaping products, as they can be harmful to your health.

Impact on Businesses

Profit Margins

The California vape tax has had a significant impact on the profit margins of businesses that sell vaping products. The tax is calculated based on the nicotine content of the product, with a rate of $1 for every 20 milligrams of nicotine in a product. This has resulted in a significant increase in the price of vaping products, which has led to a decrease in sales.

Businesses that sell vaping products have had to adjust their pricing strategies to account for the tax. Some have chosen to absorb the cost of the tax, which has resulted in a decrease in profit margins. Others have passed the cost of the tax onto the consumer, which has resulted in a decrease in sales.

Regulatory Compliance

In addition to the impact on profit margins, businesses that sell vaping products in California must also comply with a range of regulations. These regulations include requirements for packaging and labeling, age verification, and licensing.

Businesses that fail to comply with these regulations can face fines and other penalties. This has resulted in increased costs for businesses, as they must invest in the necessary infrastructure to comply with the regulations.

Overall, the California vape tax has had a significant impact on businesses that sell vaping products. While some businesses have been able to adapt to the new regulations and pricing strategies, others have been forced to close their doors.

Comparison with Other States

When it comes to vape taxes, California is not alone. Many other states have implemented taxes on vaping products. Here’s a quick comparison of California’s vape tax with other states:

• Minnesota: This state has the highest vaping tax in the country, with a 95% tax on the wholesale price of vaping products. This means that for every $10 spent on vaping products, $9.50 goes to the state in taxes.

• Kentucky: Kentucky has one of the highest per-unit taxes in the country, at $1.50 per closed system cartridge.

• Louisiana: Louisiana has the highest rate per milliliter in the country, at $0.15 per milliliter. This is a significant increase from their previous rate of $0.05 per milliliter.

• New Jersey: New Jersey has a 10-cent per milliliter tax on e-liquid, which is the same rate as California’s.

• Pennsylvania: Pennsylvania has a 40% tax on the wholesale price of vaping products.

It’s clear that California’s vape tax is not the highest in the country, but it’s also not the lowest. However, it’s important to note that the tax rate is just one factor to consider when looking at the cost of vaping products in different states. Other factors, such as the cost of living and the availability of products, can also play a role.

Legislation and Future Changes

The California vape tax has undergone several changes in recent years. In 2021, Governor Gavin Newsom approved a new 12.5% excise tax on electronic cigarettes to be paid by California source. This tax is aimed at reducing teen vaping, which has become a growing concern in recent years.

The state of California also imposes a tax on electronic cigarettes and other tobacco products. The California Department of Tax and Fee Administration (CDTFA) recently approved a new tax rate of 61.74 percent effective from July 1, 2022, through June 30, 2023 source. This tax rate applies to other tobacco products, including cigars, pipe tobacco, and chewing tobacco.

It is worth noting that California’s tax on vapor products is higher than most other states in the US. Currently, California taxes vapor products at 59.27 percent of wholesale value source. This tax rate does not include the new 12.5% excise tax on electronic cigarettes.

There is a possibility that the tax rate on electronic cigarettes and other tobacco products may change in the future. However, any changes to the tax rate would require approval from the California State Legislature. It is, therefore, essential to keep up-to-date with any changes to the tax rate on electronic cigarettes and other tobacco products in California.