Vaping Taxes by State in the United States 2023

Vaping has become a popular alternative to traditional smoking in recent years, but with its growing popularity comes increased regulation and taxes. As vaping taxes vary from state to state, it’s essential to understand the specific regulations and taxes in each state in the United States.

vaping tax by state

Let’s take a deep dive into the vaping taxes by state in the United States and provide a comprehensive guide to help you navigate the regulations and taxes for your state.

Understanding Vaping Taxes

As vaping continues to increase in popularity, it has become a common target for governments in search of tax revenue. The reason for this is that vapor products are frequently purchased by smokers and former smokers, causing tax authorities to assume that the money spent on e-cigarettes is money not being spent on traditional tobacco products. Governments have relied on tobacco products as a source of income for many decades.

The Federal vape taxes in USA

In the United States, vaping products are currently exempt from federal taxation. However, this may change in the near future as proposals for taxing these products have been introduced in Congress. Despite the attempts, none of these bills have yet gained enough support to become law.

The Debate on Taxing Vaping Devices and E-Liquids

Whether or not vaping devices and e-liquids should be taxed like tobacco products is a matter of ongoing debate. Governments see the shift of smokers away from tobacco and understand that the lost revenue must be compensated. With its appearance similar to smoking and substantial public health opposition, vaping has become an attractive target for politicians, particularly because they can justify the tax with a variety of questionable health claims.

Vaping Taxes by State 2023

In this section, we will take a look at the vaping taxes by state in the United States and provide a detailed breakdown of the regulations and taxes for each state.

Note: The taxes of OPEN and CLOSED vaping products maybe different in some states.

  • Open Vape is a type of vaporizer that allows the user to refill the liquid and has more freedom in voltage and nicotine levels..
  • Closed Vape is a type of vaporizer that uses pre-filled cartridges or tanks that are not refillable. Closed Vape systems are typically more convenient and easier to use than open systems.

Alabama
In Alabama, there is no specific tax on vaping products. However, the state does impose a 4% sales tax on all retail sales of tangible personal property and remit them to the appropriate authorities.

Alaska
In Alaska, there is currently no state-level tax on vaping products. However, some local governments may impose taxes on vaping products.

  • Juneau Borough, NW Arctic Borough and Petersburg Borough have identical 45% wholesale taxes on nicotine-containing products
  • Anchorage Borough has a 55% wholesale tax
  • Matanuska-Susitna Borough has a 55% wholesale tax

Arizona
In Arizona, there is currently no state-level tax on vaping products. However, some cities and counties in Arizona have imposed taxes on vaping products. For example, the city of Tucson imposes a 5% tax on the sale of vaping products.

Arkansas
In Arkansas, there is currently no state-level tax on vaping products. However, some cities and counties in the state may impose local taxes on vaping products.

California
In California, the tax on nicotine-containing vaping products is currently set at 61.74% of the wholesale cost of the product..

On July 1, 2022, California added a retail tax to the existing wholesale tax—12.5% on all nicotine-containing vaping products, including those bought online from retailers in other states

Colorado
In Colorado, the tax rate on nicotine-containing vaping products is currently 50%  of manufacturer’s list price. This rate will rise to 56% in 2024, and finally 62% in 2027.

Connecticut
In Connecticut, the tax rate on vaping products is 10% of the wholesale price, $0.40 per milliliter on e-liquid in closed-system vape products. This tax rate applies to all vaping products, including e-cigarettes, e-liquids, and other vaping accessories.

Delaware
In Delaware, there is a $0.05 per milliliter tax on nicotine-containing e-liquid.

District of Columbia
The vape tax rate in District of Columbia is 79% of the wholesale price of the product. The tax is imposed on the first sale of the product, and is collected by the retailer.

Florida
In Florida, there is no specific tax on vaping products. However, vaping products are subject to the state’s 6.5% sales tax.

Georgia
A $0.05 per milliliter tax on closed vaping products (ejuice, pods, cartridges, cigalikes), and a 7% wholesale tax on open and cloese vaping products. Apply to products with and without nicotine

Hawaii
In Hawaii, there is currently no state-level tax on vaping products. But House Bill 537 would subject vapor products to the state’s existing 70% wholesale tax on tobacco products (that aren’t cigarettes).

Idaho
In Idaho, there is currently no tax on vaping products.

Illinois
In Illinois, the tax rate for vaping products is 15% of the wholesale price. This rate is the same as the tax rate for cigarettes and other tobacco products. In addition to the statewide tax, both Cook County and the city of Chicago (which is in Cook County) have their own vape taxes:

  • Chicago assesses a $1.50 per unit tax on any vaping product containing nicotine and a separate $1.20 per milliliter tax on the liquid itself. (Chicago vapers have to also pay the $0.20 per mL Cook County tax.)
  • Cook County taxes products containing nicotine at a rate of $0.20 per milliliter

Indiana
In Indiana, the tax rate is 15% of the wholesale cost for closed vape system, and 15% retail tax on open vape system.

Iowa
In Iowa, there is currently no tax on vaping products. However, the Iowa Department of Revenue has proposed a tax on vaping products that would be imposed on wholesalers and retailers. The proposed tax would be a flat rate of 10% on the wholesale cost of vaping products. The proposed tax is currently under consideration by the Iowa Legislature.

Kansas
In Kansas, the tax rate is $0.05 per milliliter on all e-liquid. The tax applies to products with and without nicotine.

Kentucky
In Kentucky, the tax rate is 15% wholesale on bottled e-liquid and open vape systems, and a $1.50 per unit tax on prefilled pods and cartridges. The taxes apply to products with and without nicotine

Louisiana
In Louisiana, the tax rate is $0.05 per milliliter on nicotine-containing e-liquid.

Maine
In Maine, there is a 43% wholesale tax on all vaping products. The tax applies to products with and without nicotine

Maryland
In Maryland, there is a 12% retail tax on all vaping products and a 60% tax on vaping product containing 5ml e-liquid or more.

In addition to the state tax: Montgomery County imposes a 30% wholesale tax on all vaping products, including devices sold without liquid.

Massachusetts
In Massachusetts, a 75% wholesale tax on all vaping products applied. The tax applies to products with and without nicotine. The law requires consumers to produce proof that their vaping products have been taxed, or they are subject to seizure and a fine of $5,000 for the first offense, and $25,000 for additional offenses.

Michigan
In Michigan, there is currently no tax on vaping products.

Minnesota
In Minnesota, the tax rate of vaping products is 95% of wholesale cost. This tax rate applies to all vaping products, including e-cigarettes, e-liquids, and other vaping accessories. However, for bottled e-liquid produced in Minnesota, only the nicotine itself is taxed

Mississippi
In Mississippi, there is currently no state-level tax on vaping products. However, some local governments may impose taxes on vaping products. It is important to check with your local government to determine if any taxes are applicable.

Missouri
In Missouri, there is no specific tax on vaping products. However, the state does impose a sales tax on all retail purchases, including vaping products.

Montana
In Montana, there is no specific tax on vaping products. However, the state does impose a general sales tax of 6.9% on all retail sales of goods and services.

Nebraska
In Nebraska, there is currently no state-level tax on vaping products. However, some local governments may impose taxes on vaping products. For example, the City of Omaha imposes a 10% tax on the sale of vaping products.

Nevada
In Nevada, There is a 30% wholesale tax on all vapor products. The tax applies to products with and without nicotine.

New Hampshire
in New Hampshire, The tax rate is 8% of wholesale cost on open vaping systems (including nicotine-containing e-liquid), and $0.30 per milliliter on closed vaping systems (pods, cartridges, cigalikes)

New Jersey
In New Jersey, the vaping tax is 10% of the retail price for open vaping system, 30% of wholesale cost for devices, and $0.10 per milliliter in closed vaping system.

New Mexico
New Mexico taxes 12.5% of wholesale on open vaping systems, and $0.50 on closed vaping system. The taxes apply to products with and without nicotine

New York
20% of retail price been taxed for all vaping products in New York.

North Carolina
North Carolina taxes $0.05 per milliliter on nicotine-containing e-liquid or or non-liquid form vaping products

North Dakota
The North Dakota Department of Revenue does not currently impose a tax on vaping products. However, the state does impose a sales tax on tobacco products, including e-cigarettes.

Ohio
Ohio taxes $0.1/mL or gram depending on whether sold in e-liquid or non-liquid form. The tax rate is imposed on the wholesale price of the product, and is collected by the Ohio Department of Taxation.

Oklahoma
In Oklahoma, there is currently no state-level tax on vaping products. However, some cities and counties in the state have imposed taxes on vaping products. For example, Oklahoma City has imposed a tax of $0.20 per milliliter of vaping liquid.

Oregon
In Oregon, the tax rate on vaping products is 65% of the wholesale price. This tax rate applies to all vaping products, including e-cigarettes, e-liquids, and other vaping accessories.

Pennsylvania
In Pennsylvania, there is currently no tax on vaping products. However, the state does impose a 40% tax on all tobacco products, including e-cigarettes.

Rhode Island
In Rhode Island,there is currently no tax on vaping products.

South Carolina
In South Carolina, there is currently no tax on vaping products. However, the state does impose a sales tax on the sale of tobacco products, including e-cigarettes.

South Dakota
In South Dakota, there is no specific tax on vaping products. However, the state does impose a 4.5% sales tax on all retail sales of tangible personal property.

Tennessee
In Tennessee, there is no specific tax on vaping products

Texas
In Texas, there is currently no state-level tax on vaping products. However, some local governments may impose taxes on vaping products. For example, the City of Austin imposes a tax of 8.25% on the sale of vaping products.

Utah
In Utah, the tax rate on vaping products is 56% of the wholesale price. This tax rate applies to all vaping products, including e-cigarettes, e-liquids, and other vaping accessories.

Vermont
In Vermont, the tax rate on vaping products is 92% of the wholesale price.

Virginia
In Virginia, the tax rate on vaping products is $0.066/ml tax on nicotine-containing e-liquid or none liquid form vaping products.

Washington
In Washington, the tax rate on vaping products is $0.09/ml for open vaping systems larger than 5 ml and $0.27/ml for closed vaping system smaller than 5 mL. .

West Virginia
In West Virginia, the tax rate is $0.075/ml on all e-liquid or none liquid form vaping products.

Wisconsin
In Wisconsin, the tax rate is $0.05/ml on all e-liquid or none liquid form vaping products.

Wyoming
In Wyoming, the tax rate for vaping products is 15% of the wholesale price.

Get a lite table version of the Vaping Tax by State below:

Alabama N/A N/A
Alaska N/A N/A
Arizona N/A N/A
Arkansas N/A N/A
California 61.74% wholesale, additional 12.5% of retail N/A
Colorado 50% wholesale N/A
Connecticut 10% wholesale open, $0.40/ml closed N/A
Delaware $0.05/ml N/A
District of Columbia 79% wholesale N/A
Florida N/A N/A
Georgia 0.05/ml closed replaceable cartridge, 7% wholesale open & single-use closed Yes
Hawaii N/A N/A
Idaho N/A N/A
IlliN/Ais 15% wholesale Yes
Indiana 15% wholesale closed, 15% of retail on open Yes
Iowa N/A N/A
Kansas $0.05/ml Yes
Kentucky 15% VAL open, $1.50/cartridge closed Yes
Louisiana $0.05/ml N/A
Maine 43% wholesale Yes
Maryland 12% of retail, 60% of retail on 5ml or more N/A
Massachusetts 75% wholesale Yes
Michigan N/A N/A
Minnesota 95% wholesale N/A
Mississippi N/A N/A
Missouri N/A N/A
Montana N/A N/A
Nebraska N/A N/A
Nevada 30% wholesale Yes
New Hampshire 8% wholesale open, $0.30/ml closed N/A
New Jersey 10% of retail open, $0.10/ml closed N/A
New Mexico 12.5% of wholesale open, $0.50/cartridge closed Yes
New York 20% of retail Yes
N/Arth Carolina $0.05/ml N/A
N/Arth Dakota N/A N/A
Ohio $0.10/ml N/A
Oklahoma N/A N/A
Oregon 65% wholesale Yes
Pennsylvania 40% wholesale Yes
Rhode Island N/A N/A
South Carolina N/A N/A
South Dakota N/A N/A
Tennessee N/A N/A
Texas N/A N/A
Utah 56% wholesale Yes
Vermont 92% wholesale Yes
Virginia $0.066/ml N/A
Washington $0.09/ml open, $0.27/ml closed Yes
West Virginia $0.075/ml Yes
Wisconsin $0.05/ml Yes
Wyoming 15% wholesale N/A

Update: Taxation of E-cigarettes / Vaping Products 2023

Taxation of E-cigarettes Vaping Products

Taxation of E-cigarettes Vaping Products Click the image above to download the PDF version Source: https://www.taxadmin.org/

The highest and lowest vape tax rate by state

Assessing the taxation rates for vaping products can be challenging as different states have varying methods of taxation, either through a per unit rate or a percentage of wholesale prices.

Minnesota boasts the highest percentage-based wholesale tax rate, standing at an imposing 95%. On the other hand, Kentucky imposes one of the highest per unit taxes, charging $1.50 for every closed vaping system.

There are states that do not impose any excise taxes on vaping products. Among the states that do tax these products, New Hampshire has one of the lowest percentage-based taxes, at just 8% of the wholesale price for open vaping products. Meanwhile, Delaware, Kansas, Louisiana, North Carolina, and Wisconsin have some of the lowest per unit taxes, at just $0.05 per milliliter.

Why governments tax vaping products?

Governments impose taxes on vaping products for several reasons. Excise taxes, which are taxes on specific products, are often levied to raise revenue for the government, alter the behavior of those being taxed, and offset the costs incurred by the use of the products, such as medical and infrastructure expenses. For instance, taxing alcohol is aimed at discouraging excessive drinking, while taxing gasoline helps pay for road maintenance.

Tobacco products have been a popular target for excise taxes for a long time. Proponents of these taxes argue that tobacco consumers should bear the cost of the harm that smoking imposes on society, such as medical expenses for smokers. These taxes are often referred to as “sin taxes” as they also aim to discourage the behavior of smokers and drinkers, and help convince them to quit.

However, the government’s dependence on tax revenue from tobacco products can result in a financial shortfall if the smoking rate decreases. To make up for the loss of revenue, the government may have to find another source of income or reduce spending. For most governments, the cigarette tax is a significant source of revenue and is levied in addition to the standard sales tax imposed on most consumer products.

What is vape tax revenue used for?

The revenue generated from taxes on vaping and e-cigarettes are utilized for a range of purposes, which vary depending on the jurisdiction.

In some states, a portion of the tax revenue is earmarked for supporting smoking cessation programs and healthcare initiatives. Meanwhile, in many cases, the revenue generated from these taxes is directed into the general fund, to be used for a variety of purposes as determined by the government.