On Wednesday,
legislation that would categorize alternative nicotine products and
e-cigarettes as smokeless tobacco as well as initiate a tax on these products
was introduced by Senate Majority Leader Randy Richardville (R-Monroe). The tax
on vapor products that would be established by this legislation is 15 cents per
1.5 milliliters and a proportional rate on all fractions of 1.5 milliliters.
Senate Bill 1018 would also change the way in which loose tobacco is taxed to
53 cents per ounce from the current ad volume rate of 32 percent. The bill will
also create a 15 cent per 500 milligrams and proportionate rate tax on nicotine
products meant to be consumed.
Mr. Richardville’s
spokesperson, Amber McCann, said that SB 1018 is a piece in the compromise
between the Legislature and the Governor regarding e-cigarettes. The Governor
has leaned towards treating the e-cigarettes as tobacco products so taxing them
may be a way to get the Governor to sign the bills. Mr. Richardville said that
Governor Snyder has met with the tobacco industry and is meeting with other
groups who hold interest in the bill to determine if the new bills are a good
compromise.
Currently smokeless
tobacco, non-cigarette smoking tobacco, and cigars are taxed at 32 percent of
the wholesale price causing opponents of the bill to deem the bills as a tax
cut for tobacco companies. The anti-tobacco industry sees the new
classification for e-cigarettes as a win for tobacco companies and as e-cigarettes
receiving an exemption to the rules.