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House Bill Would Tax E-Cigarettes, Boost State Revenue

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Wednesday, January 29, 2020   

FRANKFORT, Ky. -- Kentucky lawmakers are considering putting an excise tax on e-cigarettes sold in the Commonwealth. The tax would be equal to the current tax on traditional cigarettes, which is $1.10 per pack.

State Rep. Jerry Miller, R-Louisville, the bill's primary sponsor, said his colleagues are struggling to come up with a state budget amid the worst projected revenue growth in decades, largely attributable to tax cuts. He said House Bill 32 would bring in much-needed state revenue while improving Kentuckians' health.

"But this tax has the added benefit - and the primary benefit, really - of reducing use by young people, pregnant mothers, just simply because they are more price sensitive," he said.

Gov. Andy Beshear on Tuesday announced his budget plan for the next two years. According to the latest Kentucky Health Issues Poll, three out of four Kentucky adults approve taxing e-cigarettes and vaping products. That support includes 78% of Democrats, 76% of Republicans and 72% of independent voters.

Miller said e-cigarettes are the only tobacco products currently not subject to a state excise tax.

"The intent is to raise the price of e-cigarettes and certain other tobacco products," he said, "putting a 27.5% of the wholesale price tax."

In addition to being a potential revenue source for priorities such as education and public pensions, Miller said, the Commonwealth could save money down the road in terms of health-care costs.

"Not only are we not getting people weaned away from nicotine, we're getting them more hooked," he said. "And particularly because these cartridge-based systems appeal to youth, it has the prospect of really hooking another generation on these products."

The bill now is in the House Appropriations and Revenue Committee. If passed, it could take effect as early as August. A handful of states, including Illinois and West Virginia, already tax e-cigarette products.

The text of HB 32 is online at leglslature.ky.gov, and the KHIP survey is at healthy-ky.org.


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