A bill in Tennessee that would impose a state tax of up to 10% on vape products – a higher rate than tobacco – and effectively ban the sale of many vape products in the state by requiring application for FDA approval before products are sold is headed for a final Senate vote this week. Senate Bill 763 passed the Senate Finance Committee in a 9-2 vote, and a counterpart House panel with bipartisan support.
Bill sponsor Ken Yager said the bill is aimed at stopping “the influx of Chinese vape products that are addicting our children and wreaking havoc on our schools” ― not an attack on Tennessee’s vape industry. However, critics say it is a “legislative weapon for big tobacco to crush competition.”
“I don’t take my orders from big tobacco,” Yager told reporters.
If signed into law, the bill would ban the sale of vapor products including hundreds of disposable and flavored products in Tennessee that are not approved or in the process of being approved by the U.S. Food and Drug Administration. Currently, just 34 vapor products have been approved by the FDA, and all are tied to big tobacco companies. Most vape products sold in the U.S. are imported from China. If passed, the bill would fine vape retailers $500 to $1,500 per product illegally sold.
According to The Tennessean, Tennessee is one of about 20 states that does not currently levy a tax on vape products. If passed, the bill would impose a 10% tax on open system vape products and a 7% tax on closed system vape products. Tennessee taxes tobacco products at 6.6%. Yager told reporters his proposed tax on vape products “is really no different from the tax on other nicotine products.”
