Vapouround magazine Special Issue 02 | Page 14

NEWS Protest signs: Fat Cat Vapor Shop “ The 40% tax is economic terrorism,” and “Only PA would try to balance a budget by bankrupting small businesses.” tax on hundreds of small mom and pop businesses in PA. The law also requires them to take an inventory on Oct 1st, and write a check to the state for 40% of the wholesale value of their entire inventory at that time. “Most shops, mine included, could never hope to do that, so I will be closing in mid September.” Chris then put signs in his shop windows protesting about the law which has sent him and other vape store owners out of business. Amongst the signs were ones which read: “The 40% tax is economic terrorism,” and “Only PA would try to balance a budget by bankrupting small businesses.” Chris is not alone in having to close his doors because of the tax. Comments on his store’s Facebook page tell of other business owners who have also had to shut up shop because they could not afford to pay the tax. Vaper Darren Gallant wrote: “I stopped at another vape shop in Wellsboro today at lunch break and they are having a going out of business sale. I was told 7 more shops he knew of were closing as well.” As Vapouround Magazine was going to press a massive rally was being organised for Monday September 26 to be held on the Capital Steps at Harrisburg, PA. 12 VAPOUROUND MAGAZINE USA The Harrisburg Capital Rally has been timed to coincide with the State Senate going back into session and protestors have been asked to conduct themselves “in a professional, calm, and civil manner while in the march and on the steps.” Pennsylvania has now become the sixth state to impose a vape products tax and joins Kansas, Louisiana, Minnesota, North Carolina and West Virginia in doing so. Many other states are also considering imposing similar taxes. The Pennsylvania tax, as well as being prohibitively high also carries very tough penalties indeed. Evading the tax is a felony for which courts can impose fines of up to $5,000, jail terms of up to five years or both. The fines and jail terms apply for both selling any tobacco product for which the proper tax has not been paid and also for possessing any untaxed tobacco product. The provisions are contained in the General Assembly of Pennsylvania House Bill 1198 and imposes a 40% tax on the purchase price paid by retailers to manufacturers or dealers who supply their products. In addition retailers may only purchase tobacco products from licensed dealers. Manufacturers, distributors, and retailers who want to do business in PA must first obtain licenses from the state and retailers can only buy vaping products and e-liquids from licensed distributors or wholesalers. Vapers who buy vaping products for which the tax has not been paid, such as those buying online or from out-ofstate suppliers, are termed ‘unclassified importers’ for the purposes of the new law. Should they bring an untaxed vaping product or e-liquid into PA then they will have to pay a tax of 40% of the purchase price. They will be required to file reports and make payments monthly or face hefty fines or jail terms for non-payment. The ‘floor tax’ provision, which is the main aspect of the law which many store owners say is forcing them out of business, comes into effect on October 1 with store owners having just 90 days to make the payment. The vaping tax is part of a package of measured designed to bring in $1.3 billion revenue and also increases the tax on cigarettes from $1.60 to $2.60 per pack and imposes a 55-cents-per-ounce tax on roll-your-own tobacco. The state sales tax will be extended to the download of digital videos, books, games, music, and applications.