The state’s excise tax on tobacco products does not apply to vaping products, and Rep. Sara Hannan, D-Juneau, sees this as an opportunity to generate more revenue for the state.
Hannan’s second bill, House Bill 94 was referred to the Labor and Commerce Committee and the Finance Subcommittee on Labor and Commerce on Wednesday. The bill would apply the state’s 75 percent excise tax on tobacco products, to “electronic smoking,” or vaping products, too.
“In looking at potential taxes and revenues it is an untaxed area of a market that is flourishing,” she told the Empire. “There’s lots of sales from it. Juneau gets its sales tax off of it. Otherwise there’s no taxation coming off a product that in most places have a tax on it. All its comparables have a tax on it.”
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The excise tax would certainly increase the price on vaping products. Hannan says she is OK with the price increase likely being a deterrent to vape use, but it is “not the prime mission” of the bill.
“I was looking for revenue and looking for places where people can talk about taxes where people won’t be repelled,” Hannan said.
Hannan sees this bill as a starting point to starting a larger conversation about taxes in Alaska.
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“To get to very complex conversations of what should be the tax rate of oil and gas or other complicated — a progressive income tax — if we can’t just talk about a tax that should be simple, we’ll never get to the more complex tax issues,” Hannan said.
An exact revenue figure is unknown at this point.
“This isn’t going to generate billions. It’s not even going to be tens of millions,” Hannan said. “There should be a few million bucks.”
Would Hannan’s bill affect cannabis vaping products? She said it wouldn’t. Laws have already been enacted to levy taxes on the marijuana industry. According to Hannan, the tobacco tax laws have not been updated in more than a dozen years, which is before the proliferation of vaping products as an alternative to traditional cigarettes.
HB 94 has been referred to the House Labor and Commerce Committee and the Finance Subcommittee on Labor and Commerce.
• Contact staff writer Kevin Baird at 523-2258 or kbaird@juneauempire.com. Follow him on Twitter at @alaska_kev.
