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1 Scott Drenkard, Vapor Products and Tax Policy 1 (2016)

handle is hein.taxfoundation/vapprotx0001 and id is 1 raw text is: TAXS FOUNDATION FISCAL FACT No. 505 Mar. 2016 Vapor Products and Tax Policy By Scott Drenkard* Economist, Director of State Projects Key Findings As of January 1, 2016, four states, the District of Columbia, and three local jurisdictions have enacted taxes on vapor products (electronic cigarettes), but their methods and levels of taxation vary dramatically. * In 2015, at least an additional 23 states considered excise taxes on vapor products. * Vapor products are generally found to have a much lower risk profile than traditional incinerated cigarettes. * Public Health England, housed in the British Department of Health, issued findings that vapor products are 95 percent less harmful than cigarettes and can serve as an effective tobacco-cessation method. * Vapor products likely have much lower externalities than traditional cigarettes, and it follows that the excise taxes on the products should be lower or nonexistent. * Punitive taxes on vapor products could inadvertently close out options for cigarette users looking to quit. The Tax Foundation is the nation's leading independent tax policy research organization. Since 1937, our research, analysis, and experts have informed smarter tax policy at the federal, state, and local levels. We are a 501(c)(3) non profit organization. ©2016 Tax Foundation Distributed under Creative Commons CC BY NC 4.0 Editor, Melodie Bowler Designer, Dan Carvajal Tax Foundation 1325 G Street, NW, Suite 950 Washington, DC 20005 202.464.6200 . The author would like to thank Ben Bristor for his assistance on this report. taxfoundation.org