Local Vape Shops Concerned Over New 40 Percent Tax
PITTSBURGH (NewsRadio 1020 KDKA) -- A 40 percent wholesale tax will be imposed on vapor smoking items owned and bought by vape shops starting Oct. 1, and some small business owners are worried that their companies will be crippled.
Gov. Tom Wolf and state lawmakers are imposing the tax in accordance with the 2016-17 state budget, which also imposes higher taxes on cigarettes, digital downloads, and subscription services like Netflix.
Logan Massey, a manager at Swirling Wind Vapors on Route 51, says many vape shops will have to scale back their inventory, raise their prices, or close their doors.
"We're trying our hardest to keep everything in the store," Massey tells KDKA's James Garrity. "People have their favorite stuff, and we don't want to get rid of it."
Vaping is the practice of inhaling vapor produced by electronic cigarettes and other Electronic Nicotine Delivery Systems. According to the FDA's website, vapor is produced by a liquid containing nicotine, flavorings, propylene glycol, glycerin, and other ingredients. It's often advertised as a safer alternative to smoking cigarettes, and a way to help smokers quit.
Vape shops already face a statewide sales tax, and FDA fees and regulations.
"A lot of shops definitely thrive off of their house juice, which would be the line that they made," Massey says. "They would have to pay astronomical numbers to get it approved by the FDA."
Tracy Raport, owner of Smoke Alternatives Vape Shop in Squirrel Hill, says closing down isn't an option for her.
"I took out a loan three years ago to open this business," she says. "This 40 percent tax will cost me up to $10,000 just to keep our doors open. I would not be able to close because I am still paying back my small business loan."
She says they may have to sell other products and raise prices to pay their bills.
"It feels illegal to me that I could be buying products and paying taxes regularly, and all of a sudden be hit with a one lump-sum tax on everything that's already in my store," she adds. "There's no way I could have budgeted for that, it's coming out of nowhere."