WASHINGTON D.C. – The American Vaping Association (AVA), a leading advocate for the benefits of electronic cigarettes, supports the Independent Vapor Outlets of Michigan (IVO-MI) in its opposition to a state senate bill that would add a new tax to vapor products and incorrectly classify them as tobacco products.
In addition to imposing a potentially crippling financial burden on the state’s vapor business owners in the state, Michigan State Senate Bill 1018 would inexplicably require vapor businesses to obtain a tobacco license to sell their tobacco-free products. Unlike combustible cigarettes, e-cigarettes are battery-powered devices that heat a liquid nicotine solution to create an inhalable vapor. E-cigarettes are not tobacco products. Instead, they help smokers quit the habit.
“In the past year, e-cigarette taxes have been rejected by states as diverse as Vermont, New Jersey, Hawaii, and Indiana. Why would Michigan legislators levy a sin tax on something that is helping smokers move away from traditional cigarettes?” said Gregory Conley, AVA’s president.
The proposed tax is the result of Big Tobacco lobbying efforts. Altria and R.J. Reynolds, which derive more than 90 percent of their revenue from combustible tobacco products, are asking Michigan lawmakers to cut taxes on their smokeless tobacco ”snuff” products while simultaneously instituting a new tobacco tax on non-tobacco vapor businesses.
“Michigan vapor businesses are wise to see through this transparent attempt by tobacco companies to benefit their bottom line by weighing their competition down with taxes and red tape. We urge Michigan legislators to stand with them,” Conley added.
You can learn more about AVA and vaping by visiting the AVA website.
Testimony of the Independent Vapor Outlets of Michigan on Senate Bill 1018
September 16, 2014
We write to you today to ask you to oppose Senate Bill 1018, which would add a new tax to the sale of vapor products, weigh down our small businesses with paperwork, and inhibit or remove our ability to grow and prosper within the State of Michigan.
The Independent Vapor Outlets of Michigan (IVO-MI) is a coalition of Michigan-based businesses that manufacture, wholesale, or sell vapor products, of which one common type are electronic cigarettes (‘e-cigarettes’). Our small businesses employ hundreds of Michigan citizens, serve Michigan consumers directly, pay state and local taxes, and occupy storefronts, office buildings, and production labs.
The companies represented in this letter consider themselves technology companies, not tobacco companies. We sell products that are smoke-free, tobacco-free, and increasingly being recognized as smarter alternatives to combustible cigarettes and the 4,000 plus chemicals that they emit when smoked. Our customers – the majority of whom are middle-aged smokers looking to transition away from combustible cigarettes – are passionate about our products. We are proud to be a part of an industry that is separate from the cigarette and tobacco industries.
Enactment of SB 1018 would destroy that division by requiring our businesses to obtain a tobacco license to sell our tobacco-free products. We would be mandated to purchase our products only through licensed tobacco wholesalers and distributors, a segment that is dominated by businesses whose primary clients are tobacco companies. While the tobacco industry and their associates can easily afford to comply with the regulatory burdens brought by tobacco tax licensing, the same cannot be said for all our businesses. Businesses may be forced to close or lay off employees, and cost conscious consumers may seek out products from out-of-state retailers on the Internet or through cross-border sales.
We are very concerned that tobacco lobbyists have created the impression that the vapor product industry supports the new taxes contained in SB 1018. This is false. Indeed, SB 1018 is the result of an alliance between two tobacco companies that derive 90%+ of their revenue from the sale of combustible cigarettes – Altria and R.J. Reynolds. In effect, Altria and Reynolds are asking the Legislature to cut taxes on their smokeless tobacco ‘snuff’ products while simultaneously instituting a new tobacco tax on non-tobacco competitors that will protect them from competition and increase their profits.
SB 1018 is wrong for Michigan and should be viewed for what it is — a tax deal designed at its inception to benefit Big Tobacco at the expense of their small business competitors. Please stand with our businesses, employees, and customers and oppose SB 1018.
[For a list of Michigan businesses cosigning this letter as of September 16th, please view the PDF of the letter]
About the American Vaping Association
The American Vaping Association is a nonprofit organization that advocates for fair and sensible regulation of vapor products, otherwise known as electronic cigarettes, with the goal of maximizing the number of adult smokers who use these products to quit smoking. The AVA was founded by Gregory Conley, a consumer and industry advocate with a long track record of advocating for vapor products dating back to 2010.
We are dedicated to educating the public and government officials about public health benefits offered by vapor products, which are battery-powered devices that heat a liquid nicotine or nicotine-free solution and create an inhalable vapor. The AVA is not a trade group and does not speak for any particular businesses, including our industry sponsors.