WASHINGTON, D.C. — Today, the American Vaping Association, a nonprofit that advocates for sensible regulation of vaping products, reacted to a provision in President Donald Trump’s proposed FY2020 budget (p. 47) that would give the Food & Drug Administration the power to collect an additional $100 million in tobacco product “user fees,” including a new fee on manufacturers of vaping products and electronic cigarettes. Under the proposal, the FDA Center for Tobacco Products’ current annual user fee cap of $712 million would be increased by $100 million and future user fee caps would be indexed to inflation.
As with most elements of presidential budget proposals, this provision becoming law is far from guaranteed. President Trump can make recommendations, but elected member of Congress ultimately hold the power to decide which executive branch requests, if any, become law. Fiscal year 2020 does not begin until October 1, 2019, so there will be time for discussions with U.S. House and Senate members on this issue.
Of the many unanswered questions about this proposal, perhaps the most important is how the Tobacco Control Act’s user fee statute would be applied to vaping products. As the FDA outlines on their website, user fees for traditional tobacco products — cigarettes, smokeless tobacco, cigars, and loose tobacco — are determined by a formula that considers federal excise tax collections and relative market sizes using data from the Alcohol and Tobacco Tax and Trade Bureau. However, vaping products are not currently subject to federal excise taxes, so it is an open question how the FDA would determine the market shares of potentially thousands of registered manufacturers and importers.
Gregory Conley, President of the American Vaping Association, issued the following statement:
“President Trump should fire whoever duped his office into proposing this $100 million tax increase on adult consumers trying to quit smoking. This is nothing more than a virtue tax that will cost jobs and lives. Over 50 percent of the vaping industry is held by small- and medium-sized businesses, meaning that any user fee will inevitably be passed along to consumers in the form of price increases.
“Before even considering an expansion of the FDA’s tobacco regulatory budget, Congress should examine why the FDA believes its current tobacco budget of $712 million is inadequate. In the nearly two-year tenure of outgoing FDA Commissioner Scott Gottlieb, the FDA Center for Tobacco Products has failed to issue substantive guidance documents needed by the vaping industry to comply with upcoming regulatory deadlines. It is hard to believe the FDA’s performance would have been better the past two years if they had an extra $100 million in their budget.”
Americans for Tax Reform also issued a rebuke of the proposed user fee increase.
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.