Vapouround magazine Special Issue 03 | Page 12

NEWS CALIFORNIA VOTES FOR CIGARETTE AND E-CIGARETTE TAX HIKES WHICH WILL PUSH UP PRICE OF VAPING PRODUCTS Cigarettes and e-liquids containing nicotine will cost more in California after voters approved a controversial new tax hike on tobacco products. Following the November 8 vote, a new $2-per-packet tax will apply to cigarettes to fund health care and smoking prevention initiatives and research. The new California Healthcare, Research and Prevention Tobacco Tax (also known as Proposition 56) will impose an equivalent tax increase on other tobacco products and on electronic cigarettes containing nicotine. It is thought the new measure will increase annual tax revenues by up to $1.4 billion by 201718. Prior to this change, California’s tobacco tax of 87 cents per pack had remained the same since 1999. 12 VAPOUROUND MAGAZINE USA Tom Steyer from the Yes on Prop. 56 Campaign, said the tax hike was a good thing. He said: “We had a historic coalition that included business, health care, labor, doctors and nurses, and policemen who said, ‘enough is enough.’ Steyer said the new tax revenue would allow much more to be done to tackle the leading cause of avoidable death in California. The tax increase will move California from the 35th to the ninth highest place in the country for tobacco taxes. However, e-cigarette retailers are now worried that the new tax could force them out of business especially as the vaping industry is still reeling from the new Food and Drugs Administration regulations for vape products. According to The Sacramento Bee online, Proposition 56 passed by a margin of 62 per cent with more than 5 million votes counted. Opponents such as tobacco companies raised millions in California to defeat Proposition 56 but many voters supported the measure in raising the tobacco tax and adding a whole new tax on e-cigarettes. Research by the U.S. Centers for Disease Control and Prevention found that increasing the price of cigarettes led to a reduction in demand for them and this was particularly the case for teenagers and young adults. Under Proposition 56 Medi-Cal will receive the largest portion of the tax revenue — between $710 million and $1 billion in 2017-18. Schools will receive $20 million for tobacco prevention education and five percent of the tax revenues will go to the University of California to conduct medical research into tobacco-related diseases.