CARSON CITY — Liquid nicotine would be classified as “other tobacco products” and be subject to tax under a bill the Assembly Taxation Committee considered Tuesday.
Assembly Bill 269 would impose a tax of 5 cents per fluid milliliter of “consumable product,” defined as “any nicotine liquid solution or other material containing nicotine that is depleted as a vapor product is used.”
Under the bill, wholesalers of e-cigarettes and liquid nicotine as well as retail vape shops would have to be licensed by the Department of Taxation.
Assemblywoman Irene Bustamante Adams, D-Las Vegas, said her bill aims to bring the state’s tax structure up to date with emerging products.
“Technology has created new markets that were not included in our tax structure,” Bustamante Adams told committee members.
The tax would raise a projected $1 million a year. For a 60 milliliter vial of liquid nicotine, the tax would add $3 to the cost.
She said she wanted to avoid a discussion on health issues related to vaping and focus on tax policy. She noted other bills are pending to address those other issues.
Bryan Wachter of the Retail Association of Nevada supported the bill.
“We tax nicotine in Nevada and we should tax nicotine in its new and evolved forms,” he said.
But industry representatives and vape shop owners said many people are drawn to vaping as a way to quit smoking. They argued it was punitive to tax them when they’re trying to improve their health.
“Health should be a very important part of this discussion,” said Nevada Vapor owner Natasha Supancheck, who described vaping as a “harm reduction technology” similar to seat belts.
“If you’re going to go after liquid nicotine, why not go after vegetables?” she asked, adding that nicotine is also contained in eggplant.
Her comment riled Assembly Speaker Jason Frierson, who told Supancheck that if she has evidence supporting her claim, she should provide it to the committee.
Michael Hackett of the Nevada Public Health Association supported taxing vapor products but said the bill doesn’t go far enough. He said vaping products should be taxed like “other tobacco products” under state law, which are taxed at 30 percent of wholesale.
The Nevada Vaping Association and shop owners argued the levy will punish people who are trying to quit smoking, jeopardize jobs and stifle the industry in Nevada, which is attracting similar businesses fleeing California because of higher taxes.
Bustamante Adams urged the committee to discount those arguments.
“They’re moving to Nevada for a reason, because it’s booming,” she said. “If not now, then when?” she asked.
The committee took no action on the measure.
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