Bill Would Equalize Taxes on Tobacco Products With Those Already Imposed on Cigarettes
TRENTON – A bill sponsored by Senators Joseph F. Vitale and Dick Codey that would impose a tax on electronic cigarettes and change the amounts taxed on other forms of tobacco to make them equal to those imposed on cigarettes was approved today by the Senate Health, Human Services and Senior Citizens Committee.
“E-Cigarettes are a fairly new product that is increasing in popularity across the state and around the country and we are still learning the health and safety risks and implications associated with them. With federal regulations not yet to be in place, these devices often contain toxic substances, carcinogens and unregulated amounts of nicotine,” said Senator Vitale, D-Middlesex, and Chairman of the Senate Health Committee. “This is especially concerning as the tobacco industry has begun to target young adults with these devices by making cartridges in flavors such as chocolate, strawberry and cookies ‘n cream. Hopefully, by increasing the tax on these items we can curb the usage of electronic cigarettes and keep young people from starting an unhealthy and often deadly habit.”
The bill, S-1867, would impose the New Jersey Tobacco Products Wholesale Sales and Use Tax on electronic cigarettes at a rate of 75 percent. The tax would be imposed on wholesalers at the time of sale to retailers. The tax increase was a suggestion by Governor Christie in his FY2015 budget and according to the Administration is expected to bring in an additional $35 million in the upcoming fiscal year.
“The days of Joe Camel and the Marlboro Man are gone, due to strong federal regulations of the tobacco industry. Unfortunately, those regulations haven’t caught up to the e-cigarette industry and companies are targeting young adults to bring them into this addictive habit early,” said Senator Codey, D-Essex and Morris. “When New Jersey increased the tax on cigarettes, we saw sales slow as more people kicked their addiction to save money. Hopefully with this legislation we will see people transition from E-cigarettes to a full cessation of their tobacco use.”
According to the Centers for Disease Control and Prevention (CDC), electronic cigarette usage has increased nationwide, including doubling in use among middle and high school children. Additionally, the CDC study indicates that electronic cigarettes are an entry point into conventional tobacco products by minors. The Senators note that even though New Jersey has been in the forefront in regulation of electronic cigarettes, including being the first state to ban the devices to minors and the first to ban the use in public places and workplaces, the change in tax structure is needed to avoid an unintended tax preferences of e-cigarettes.
Additionally, the bill would increase the tax on other forms of tobacco to be similar to the $2.70 per pack already charged on cigarettes. New Jersey Tobacco Products Wholesale Sales and Use Tax would increase the tax on:
- Cigars to $2.70 for each cigar;
- Cigarillos to 54 cents for each cigarillo;
- Little cigars to 13.5 cents for each little cigar;
- Moist snuff to $2.25 per ounce from 75 cents per ounce;
- Single-dose smokeless tobacco products to 13.5 cents for each dose; and
- Smokeless tobacco to $4.15 per ounce.
The bill would increase the tax on all other tobacco products from 30 percent to 68 percent. The increased taxes from non-electronic cigarettes are expected to bring in an additional $22 million in revenue each year.
Under the bill, the increased revenue will help support the New Jersey State Commission on Cancer Research, control and cessation initiatives through the Department of Health, substance abuse prevention programs through the Division of Mental Health and Addiction Services within the Department of Human Services, to fund opioid antidote distribution and to the state poison control.
The bill was approved with a vote of 5-2-2. It now heads to the Senate Budget and Appropriations Committee for further review.