2016 Bills

HB 333: Growing Government through an 86% E-Cigarette Tax

This bill was defeated in committee on a 5-7 vote.

Libertas Institute opposes this bill.

Last year, Representative Paul Ray introduced legislation, which passed the legislature and was signed into law, that imposes restrictions on the manufacture, distribution, and sales of e-cigarettes. This year, he has has proposed House Bill 333, which would add an 86% tax to sales of electronic cigarettes, nicotine inhalers, and the substances they use.

Revenue generated by the tax would be used to employ nurses or athletic trainers in schools throughout rural areas of Utah, though some legislators have proposed establishing this tax as a means of paying for Medicaid expansion; House Bill 302 imposes the same tax, but diverts the money to offsetting the state’s fiscal burden of Medicaid expansion.

Representative Ray claims that this punitive tax would discourage underage youth from using it, though he has not presented any evidence that the tax would achieve his goals. Further, it is improper to punish adults financially simply because some youth may be violating the law that already prohibits them from purchasing and possessing these items.

This tax could very well crush a fledgling industry that relies on attracting cigarettes smokers to abandon those more harmful products in favor of electronic cigarettes and nicotine inhalers. Placing the same 86% tax on the latter products would remove the incentive to migrate away from cigarettes, thus decreasing the rate at which Utahns quit smoking.

The desire to address underage use of harmful substances is a noble one, but it hardly provides justification for adding a punitive tax on all users of the product. Government should not be grown through “sin taxes” and other misguided social engineering efforts.