New Vaping Tax Laws: Everything You Need To Know

Posted by Auster Vape Co. on

It’s no secret that everything we do is taxed. When you eat out, you’re paying a sales tax. The same applies when shopping online, going to events, you name it. This is something we’ve learned to live with. Unfortunately, vapers have it worse.

Across the US, almost every state has some kind of tax for vape products. Some states, such as Pennsylvania, have it as high as 40%! According to some state laws, this doesn’t exclude online shopping(we’ll get to that). Taxes aren’t only applied to the buyer. Retailers also give a slice of the pie, from national chains to your local vape shop.

In this article, we’ll give you the rundown of what you need to know, and how to get around those nasty tax hikes.

Types of Taxes


Different states mean different tax laws. Some states charge the retailer by wholesale value. Some states charge by the fluid ounce. Let’s briefly touch on the type of tobacco taxes.

Wholesale Price

This tax is based on the purchase price of the wholesale value. This affects whoever is supplying the products. A 30% tax on a product that cost the retailer $100 would add an additional $30 worth of taxes.

This is not a sales tax, where the buyer pays a percentage of the entire purchase price.

Per Ounce or ML

A unit tax directly affects the buyer, taxing them a percentage per ounce or ml. Some states enact a minimum tax that applies when you purchase a single package.

New Vape Laws By State


Now that we know the two main tax types, let’s dive into the specifics! To know the exact numbers, there are websites that let you search by state. Make sure you’re updated on your state’s current tax laws! In this section, we’ll cover the top taxed states, and how to work around the tax barriers.

The Indirect Buyer’s Tax

You may not think a retailer tax will affect you, the buyer. From the perspective of a vape shop, what would they need to do in order to help offset the unfortunate costs? They have to charge the buyer more in some way. Not all shops do this, but it’s smart to keep this in mind.

If a vape shop is taxed 40% of the wholesale price, they may raise their product line by something like 10%. This is to offset costs while keeping their customers happy(by not surcharging too much). Some shops are forced to raise their prices by 20-30%, depending on the circumstances.

Top 5 Taxed States

These 5 states have it the worst, plain and simple. Not to panic, since shopping online remains a viable option. Let’s do a quick review.

  • Oregon: Comes at a whopping 81.25%! This is a huge hit on local shops, almost doubling their purchasing costs.

  • Rhode Island: Rhode Island comes behind at 80%. Rhode Island and Oregon are the only two states that charge in the eighties.

  • Hawaii: It’s no surprise Hawaii has it bad, since most imports are bombarded with taxes. The Hawaii wholesale tax comes in at 70%.

  • New Jersey: New Jersey taxes higher than Hawaii, at 75% of the wholesale price.

  • New York: Jersey’s sibling, New York charges the same amount for the wholesale value.
  • What About Buying Online?


    Based on the 5 listed states, it’s easy to see how ridiculous taxes can get. Online tax laws get a little tricky, but can ultimately be reduced, or avoided. Let’s dive into the details.

    How Online Shops Tax

    When shopping online, taxes depend on your current location. If you are a CA resident purchasing from an online CA retailer, your state’s taxes apply. Some states, albeit few, limit your ability to purchase from online shops. As of 2017, there are four states you need to worry about.

    Utah attempts to outright ban online vape sales. Pennsylvania requires you to file 40% of your vape related purchases when tax time comes. Though, this rule is often unenacted since consumers simply don’t pay it. This is done intentionally, or out of ignorance. How many of you PA residents knew you had to file vape purchases during the tax year? Exactly.

    If you live in states where online purchases aren’t heavily regulated, you’re in luck. By simply purchasing from a retailer outside of your state, you don't have to pay your state’s tax. Technically, you might have to file, but the rule is unenacted upon for the most part.

    Avoiding Unnecessary Surcharges

    Most consumers are ignorant of tax laws. Unfortunately, some online shops will exploit this. Most taxes are wholesale, meaning the retailer is responsible for paying the tax based on their bulk purchases. This never means a consumer is responsible for paying the entire tax. Though, the products are likely surcharged in some way.

    For example, if you’re a resident of PA and you shop online, you should never see a ridiculous 40% tax. Some shops do this, claiming they are following tax laws. This is simply misleading. Never pay a tax that isn’t a simple sales tax or a per ounce charge. Be vigilant.

    Summing It Up

    Almost every state has a vapor tax, but you can get around it by purchasing from an outside online vendor. Local prices will surge based on the tax amount, so check with your state’s tax laws! The main takeaway here is that most taxes are charged for the retailer, not you directly. Any online shop adding a hefty 40% tax is likely taking advantage of you. Stay current with your local laws, and watch out for unnecessarily high price surges, even locally. More importantly, happy vaping!

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