Are there federal taxes on vape products?
There are currently no federal taxes on vape products, but that is not for lack of effort. The first draft of President Biden’s Build Back Better Act of 2021 included a tax on nicotine but was struck from the final version of the Inflation Reduction Act of 2022.
That’s not the case with tobacco, which according to the National Institutes of Health was one of the first consumer products to be taxed in North America. There have been federal taxes on tobacco since the Civil War.
Today, federal excise taxes on cigarettes, cigars, chewing tobacco, pipe tobacco, snuff, and other tobacco products are administered by the Alcohol and Tobacco Tax and Trade Bureau, or TTB. Cigarettes, small cigars, and smokeless tobacco are generally taxed per unit (e.g., per cigarette or pack of cigarettes), while large cigars are typically subject to an ad valorem tax (i.e., a percentage of the retail or wholesale price).
Do states tax vape products?
More than 30 states tax vapor products - a huge change since 2015 when only three states and D.C., levied taxes on vapor products. More states are likely to tax vapor products in the future or have already tried to do so.
A comprehensive list of state excise taxes can be found in spreadsheet and map format on this page.
Are there local taxes on vape products?
Currently, only a few states levy taxes on vapor products at the local level.
Alaska and Nebraska don’t tax e-cigarettes at the state level, but some jurisdictions apply local taxes.
Notably:
Anchorage Borough, Alaska
Juneau Borough, Alaska
Northwest Arctic Borough, Alaska
Petersburg Borough, Alaska
Omaha, Nebraska
On top of statewide taxes, there are local vape taxes in a few jurisdictions in Illinois (Chicago and Cook County) and Maryland (Montgomery County).
Alabama, Colorado, Missouri, New York, Ohio, Pennsylvania, and Virginia also allow local governments to levy local taxes on vapor products.