Kansas e-cigarette tax among highest in nation

Published: Mar. 9, 2017 at 1:40 PM CST
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Proponents of electronic cigarettes or vaping use say it’s a healthier alternative to smoking, but vapor store owners say a new state tax might evaporate their business.

Antonio Saverino and his mother own The Vape Bar with locations in Manhattan and Junction City. They say the state’s e-cigarette tax is hurting their business.

“We averaged about 1200 sales a month at this store previous to this tax. Last month, we had about 900 sales since the tax has been enacted,” Saverino said.

The Kansas Vapor Association lobbyist Spencer Duncan said Kansas currently has the highest tax on e-cigarette liquid.

A 30 milliliter bottle of “e-liquid,” which is used to create the vapor in the e-cigarette, retails for $14.50 at Saverino’s store. The state adds an additional $6, a nearly 50 percent tax, which is in addition to the state, local and county sales taxes.

The tax was passed in 2015 while lawmakers were looking for ways to fill the state budget hole. It went into affect Jan. 1. Duncan said the tax was passed without going through the committee process.

Saverino said the high taxes are forcing people to buy their products online or in a neighboring state to avoid the extra cost. He also said vapor store owners in border towns are moving their businesses out of Kansas to other states to remain competitive.

Saverino, who is an active member of the Kansas Vapor Association, says he hopes lawmakers will find a tax rate that is more fair to the industry.

“Tax us, fine,” Saverino said, "but make it reasonable.”

Relief could be on the way for Saverino and other vapor store owners.

On Monday, the Kansas Senate Assessment and Taxation Committee advanced a bill that would lower the tax on e-liquid from 20 cents to 5 cents per milliliter.

Duncan said it’s difficult to know exactly how many vapor stores there are in the state, but he estimates the number at roughly 400 independent vapor stores. There are also hundreds of large retailers and convenience stores that sell vapor products.