Vaping product taxes vary dramatically across U.S. states, with some states adding as little as $0.36 to the cost of a product while others impose taxes nearing $18. Minnesota and Washington lead the nation with the highest vaping tax burdens, each taxing products at approximately $17.90. Vermont follows closely with a tax burden of about $17.33.
Conversely, states like Delaware, Georgia, Kansas, Nebraska, North Carolina, and Wisconsin impose the lowest tax burden at $0.36 per product. Additionally, 16 states do not levy any statewide tax on vaping products. This patchwork of tax policies creates substantial price differences for consumers depending on their location.
Adam Hoffer, director of excise tax policy at the Tax Foundation, noted that vape taxes lack the conformity seen in other excise taxes, such as those on gasoline or cigarettes. This makes direct comparisons between states challenging.
"Vapor products get taxed sometimes by the amount of milliliters in the product, sometimes by the retail price, sometimes by wholesale price, sometimes it depends on the kind of vaping product it is," Hoffer explained. "And so it's really hard to do an apples-to-apples comparison across states when we look at vaping access."
Many states have increasingly turned to taxing vaping products as a revenue source, particularly as cigarette tax revenues decline due to falling smoking rates. Hoffer stated that some states are attempting to offset the reduction in cigarette tax collections by implementing taxes on vaping products.
This trend has contributed to particularly high tax burdens in some West Coast states. Hoffer highlighted Washington and Minnesota, where many vaping products are taxed at 95% of the wholesale price. In some instances, these taxes can nearly double the retail price of a product within a state.
The significant tax differentials can influence consumer purchasing habits, with individuals aware of lower-taxed neighboring states potentially crossing state lines to save money. This is particularly noticeable in the Washington, D.C., metropolitan area, where consumers can travel to nearby Maryland and Virginia to find lower prices.