Louisiana Vape Tax Increasing Starting on July 1, 2023
The Impact of Louisiana’s Vape Tax Increase on the Industry
The world of vaping in Louisiana is bracing for a major shift, as recent changes in tax law threaten to drastically alter the economic landscape of this flourishing industry. With this article, we aim to provide a detailed analysis of the new regulations, their implications for retailers and consumers, and the reactions within the vaping community.
Starting this Saturday, the excise tax rate that wholesalers and retailers pay on vapor products and electronic cigarettes in Louisiana will surge from 5 cents per milliliter to a staggering 15 cents per milliliter. This threefold increase is a result of Act 414 of the 2023 Regular Session of the Louisiana Legislature. This act increased the excise tax rate for consumable nicotine liquid solution or other materials containing nicotine that are depleted as a vapor product is used.
Under the new law, retailers who purchase these products tax-free directly from authorized online manufacturers are now required to pay the excise tax to the Louisiana Department of Revenue on a monthly basis. The stakes are high for compliance, as penalties, fines, and license forfeitures will be levied on tax delinquent wholesalers and retailers. As such, stores selling vapor products can anticipate a surge in inspections by enforcement agents.
Moreover, every vapor product manufacturer and alternative nicotine product manufacturer with products sold in Louisiana must register each product with the Louisiana Office of Alcohol and Tobacco Control (ATC) from October 1. A directory of these products will be available on the ATC website by November 1.
Reactions from Vape Store Owners
State taxes on vape products and e-cigarettes are set to rise this week, and local vape store owners predict that this will strike a blow to both businesses and consumers alike.
“I support that the ATC does need more employees to hold everyone to the proper standards and laws that they have now because that’s not the case here in Lake Charles,”
said Tracy Slaughter, owner of Elite Vapors. “I don’t appreciate that it’s coming at the consumer and small business owner’s expense.”
Bill Bingham, owner of High Volt Vapor in Sulphur, echoed this sentiment, stating that a bottle of vape juice would now cost $37, compared to the $27 he was previously paying.
Bakes Ghani, co-owner of Deja Vu Smoke Shop in Baton Rouge, expressed his resolve despite the price increases, saying, “Regardless of if it’s a couple more dollars or it’s a few dollars cheaper it’s not off the shelves and we’re still up and running.”
Impact on Customers
Slaughter mentioned she would be forced to raise her prices, something she has avoided for years. “It’s going to be a big hit to any vape shop owner, to any manufacturer and the consumer,” she said. The ripple effects of these price hikes are expected to be significant, and consumers will bear the brunt of these changes.
The Louisiana Department of Revenue’s Statement
The Louisiana Department of Revenue has been clear in outlining these changes, confirming that the excise tax rate for vapor products and electronic cigarettes will increase in Louisiana from five cents per milliliter to 15 cents per milliliter starting July 1, 2023.
The excise tax rate that wholesalers and retailers pay on vapor products and electronic cigarettes will increase in Louisiana from five cents per milliliter to 15 cents per milliliter on July 1, 2023.
Act 414 of the 2023 Regular Session of the Louisiana Legislature increased the excise tax rate for consumable nicotine liquid solution or other materials containing nicotine that are depleted as a vapor product is used.
Retailers purchasing these products tax-free directly from online authorized manufacturers are required to pay the excise tax to the Louisiana Department of Revenue monthly. Compliance with payment of these taxes will be strictly enforced. Penalties, fines, and license forfeiture shall apply to tax delinquent wholesalers and retailers. Stores selling vapor products should expect increased inspections by enforcement agents.
Beginning Oct. 1, 2023, every vapor product manufacturer and alternative nicotine product manufacturer whose products are sold in Louisiana, whether directly or through a wholesale dealer, retail dealer, or similar intermediary or intermediaries, must register each product with the Louisiana Office of Alcohol and Tobacco Control (ATC). The Vapor Product and Alternative Nicotine Product Directory will be available on ATC’s website by Nov. 1, 2023.
In summary, the vape tax increase in Louisiana has significant implications for wholesalers, retailers, manufacturers, and consumers. While it represents a revenue source for the state, the repercussions on small businesses and customers, especially during these economically uncertain times, may far outweigh the benefits. The vape community, in particular, will be hit hard by this tax increase, prompting discussions around alternative solutions and paths forward.