Research & Commentary: Regulating and Taxing E-Cigarettes in Washington

Published February 25, 2014

Over the past five years, electronic cigarettes (e-cigarettes) have emerged as a popular alternative for smokers looking to quit or substantially reduce their cigarette use. Smoke-free, tobacco-free, and often nicotine-free, e-cigarettes are seen by many in the public health community as far safer than traditional combustible cigarettes and the best feasible option to help get smokers to quit voluntarily. As the use of e-cigarettes has grown, state and local governments across the nation have begun efforts to regulate and tax these products.

Multiple studies and surveys have shown a substantial number of smokers have switched to this far safer alternative. Research suggests e-cigarettes are particularly helpful for heavy smokers who have tried and failed to quit through traditional methods such as nicotine gum, the nicotine patch, and medication. That is why the American Association of Public Health Physicians has concluded e-cigarettes could “save the lives of 4 million of the 8 million current adult American smokers.”

The imposition of excise taxes on e-cigarettes will take away a prime economic incentive for smokers to improve their health and switch to e-cigarettes. Some tobacco control organizations see no difference between cigarettes and e-cigarettes and insist the two products be taxed similarly. Only one state, Minnesota, follows this policy, subjecting e-cigarettes to an excise tax of 95 percent of the wholesale price. Since Minnesota’s tax was enacted in 2010, similar attempts to tax e-cigarettes have failed in several states, including Delaware, Iowa, Maine, New Mexico, Ohio, Oklahoma, Oregon, and Utah. Earlier this year, Massachusetts Gov. Deval Patrick briefly sought support for a plan to tax e-cigarettes as a tobacco product, but he abandoned his plan when he found lukewarm support from legislators.

In Washington and most other states, e-cigarettes are subject to state and local sales taxes. Although certain rules pertaining to youth access and product safety are appropriate, Washington legislators should resist calls from activist groups to impose burdensome tobacco taxes on a product that is endorsed by many anti-smoking public health advocates as a way to greatly reduce the toll of smoking.

The following articles provide more information about electronic cigarettes and efforts to regulate their sale and use.


Health Board in New Territory with Vaping Ban
http://blog.thenewstribune.com/opinion/2011/05/05/health-board-in-new-territory-with-vaping-ban/
In 2011 the Tacoma-Pierce County Board of Health considered a regulation that would ban the use of electronic cigarettes wherever smoking is banned. After reviewing the evidence, the Tacoma News Tribune editorial board urged caution, writing, “[T]he scale is in favor of the least restrictive approach.” The Board of Health later did just that, enacting a compromise measure that permitted e-cigarette use in most workplaces in the county.

Smoke, the Chief Killer—Strategies for Targeting Combustible Tobacco Use
http://www.nejm.org/doi/full/10.1056/NEJMp1314942?query=TOC
Writing in the New England Journal of Medicine, three distinguished professors in the field of tobacco control endorse tobacco harm reduction as a way to reduce smoking-related disease and death. The authors report 98 percent of tobacco-related deaths are attributable to the inhaling of burning smoke, and they note evidence shows all noncombustible nicotine delivery systems (e.g., nicotine replacement therapies, smokeless tobacco, e-cigarettes) are far safer than smoking.

E-cigarette Regulation: Take Sensible Approach to Help Smokers Quit
http://news.heartland.org/editorial/2013/08/19/e-cigarette-regulation-take-sensible-approach-help-smokers-quit
Writing for the Heartlander, Jeff Stier, a senior fellow at the National Center for Public Policy Research, notes e-cigarettes provide both immediate and long-term health benefits. He argues any regulation should be carefully designed so as not to hinder use of e-cigarettes by those seeking to quit smoking cigarettes. 

Regulating, Taxing E-Cigarettes         
http://rodutobaccotruth.blogspot.com/2013/05/regulating-taxing-e-cigarettes.html
Heartland Institute Senior Fellow Brad Rodu argues new taxes on e-cigarettes are likely and makes suggestions on how states should implement these taxes. 

A Fresh Look at Tobacco Harm Reduction: The Case for the Electronic Cigarette
http://heartland.org/policy-documents/fresh-look-tobacco-harm-reduction-case-electronic-cigarette
Riccardo Polosa, Brad Rodu, Pasquale Caponnetto, Marilena Maglia, and Cirino Raciti identify the health effects of e-cigarette use and consider the acceptability, safety, and effectiveness of this product as a long-term substitute for smoking. 

Will Taxes and Regulation Rein In the Booming E-Cigarette Market?
http://www.forbes.com/sites/danielfisher/2013/10/02/will-taxes-and-regulation-rein-in-the-booming-e-cigarette-market/
Daniel Fisher of Forbes discusses the effect new regulations and taxes will have on the emerging e-cigarette market. Fisher quotes from several sources on both sides of the debate. 

Research & Commentary: Electronic Cigarettes
http://heartland.org/policy-documents/research-commentary-electronic-cigarettes
In this Research & Commentary, Heartland Institute Senior Policy Analyst Matthew Glans examines electronic cigarettes, tobacco harm reduction, and various proposals to regulate e-cigarette use. E-cigarettes have become one of the most popular nicotine replacement products and a key building block in tobacco harm reduction strategies. 

Research & Commentary: Age Restrictions for Electronic Cigarettes
https://heartland.org/policy-documents/research-commentary-age-restrictions-electronic-cigarettes
Matthew Glans of The Heartland Institute outlines the debate over how to regulate electronic cigarettes and describes efforts to regulate their sale to and use by minors. 

Electronic Cigarettes at a Regulatory Crossroads
http://heartland.org/policy-documents/electronic-cigarettes-regulatory-crossroads
Writing for Regulation magazine, Thomas Hemphill outlines the various regulatory paths the state and federal governments may take in their efforts to regulate e-cigarettes.

Tobacco and Tobacco Products at a Crossroads in the 21st Century
http://heartland.org/policy-documents/tobacco-and-tobacco-products-crossroads-21st-century
Tobacco and health policy consultant Scott D. Ballin outlines several considerations he says must be part of the debate if further improvement in harm reduction is to continue. 

The Clueless Crusade to Ban E-Cigarettes
http://reason.com/archives/2013/08/28/the-clueless-crusade-to-ban-e-cigarettes#comment
Writing for the Reason Foundation, Nick Gillespie discusses the effort to ban e-cigarettes and the motivation behind such bans. 

Electronic Cigarettes Are the Tobacco Harm Reduction Phenomenon of the Year—But Will They Survive?
http://heartland.org/policy-documents/electronic-cigarettes-are-tobacco-harm-reduction-phenomenon-year-will-they-survive
Paul L. Bergen and Courtney E. Heffernan provide a brief history of the e-cigarette and discuss the merits and limitations of e-cigarettes in tobacco harm reduction. 

The Electronic Future of Cigarettes
http://www.theatlantic.com/health/archive/2013/06/the-electronic-future-of-cigarettes/277057/
In this article in The Atlantic, Brad Rodu examines the effectiveness of e-cigarettes as a method of nicotine harm reduction and criticizes the efforts of opponents and regulators to hinder the companies that produce them: “The body of highly credible research and roster of public health experts endorsing tobacco harm reduction continues to grow, providing more science-based support for smokers to switch. In the absence of rational FDA regulation, nicotine-addicted smokers would do well to quit cigarettes and avail themselves of the many smoke-free harm reduction products that are currently on the market.”

Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this and other topics, visit The Heartland Institute’s Web site at http://heartland.org, and PolicyBot, Heartland’s free online research database, at www.policybot.org. 

If you have any questions about this issue or the Heartland Institute Web site, contact Heartland Institute Government Relations Director John Nothdurft at [email protected] or 312/377-4000.