Anti-Tobacco Lobby Disappointed: No Tax Hike In New Vaping Law

Gov. Gretchen Whitmer recently signed into law a pair of bills that prohibit the sale of vaping products to minors — and forbids anyone under the age of 18 to possess them. Neither the governor nor the professional anti-tobacco lobby is satisfied with the bills, however, for a reason they are sometimes coy about expressing. Specifically, the legislation does not extend the state’s tobacco tax to vaping products.

The legislation that did pass lets prosecutors charge minors with a misdemeanor or civil infraction for getting caught with any nicotine product. It also extends to vaping products the current rules and sanctions on retailers who sell tobacco to minors. The misdemeanor crime comes with a $50 fine, or alternatively, community service or, in the words of the legislation, participation in a “health promotion and risk reduction assessment program.”

Whitmer touched on the tax issue in correspondence she sent to legislators when she announced her approval of both bills. The governor said she had significant reservations because the bills “instead of making clear that . . . tobacco taxes . . . apply to E-cigarettes it muddies the waters.”

The term of art used by Whitmer and others who favor imposing tobacco taxes on vaping products is that they should be “regulated like tobacco.” Whitmer’s letter referred to other tobacco regulations like smoking bans in restaurants and other public places, but the real dispute is over taxes.

That became apparent from statements made in earlier committee hearings on the bill. According to Gongwer Michigan Report, Rep. Vanessa Guerra, D-Saginaw, was impatient with colleagues who would not agree to defining vaping products as tobacco:

“The reality is, when it comes to the Legislature, we have a population of people who don’t want to tax folks,” she said. “So, that’s really it at the end of the day. We have folks who don’t want to treat this as a tax issue, which is what it really is.”

Anti-tobacco lobbying groups that have pressed policymakers to extend tobacco taxes to vaping products also expressed dismay.

“After weeks of calling on Gov. Whitmer to veto Senate Bills 106 and 155, the American Cancer Society Cancer Action Network is disappointed that the governor has signed these bills into law,” says Andrew Schepers, the network’s director of government relations in Michigan. “The Legislature failed to create and pass comprehensive legislation that defines and regulates e-cigarettes as tobacco products to protect Michigan’s youth from Big Tobacco’s predatory practices.”

The legislation Whitmer reluctantly approved defines “alternative nicotine products” as “a noncombustible product containing nicotine that is intended for human consumption, whether chewed, absorbed, dissolved, or ingested by any other means.”

The bills define a “vapor product” as “a noncombustible product that employs a heating element, power source, electronic circuit, or other electronic, chemical, or mechanical means, regardless of shape or size, that can be used to produce vapor from nicotine or any other substance, and the use or inhalation of which simulates smoking.”

Opponents of regulating and taxing e-cigarettes as tobacco point out that the products contain no tobacco flora.

“I don’t expect this to change the market in Michigan in very noticeable ways,” said Michael LaFaive, the senior director of the Mackinac Center’s Morey Fiscal Policy Initiative, in an email. “The evidence — at least from Europe – is that alternatives to combustible tobacco, such as vaping products, are a legitimate harm reduction strategy. If true, then not regulating (or taxing) these products may be a better approach on net balance.”