NC State Economist Mike Walden – “Vapor Taxes”

Mary:  This is Mary Walden with economist MW, welcoming you to the economic perspective.  Today’s program looks at vapor taxes.   Mike, taxes are frequently changing, with rates going up or down, and entire taxes being added or dropped.  There have been major tax changes in North Carolina in recent years, with one of them being the addition of a vapor tax.  Please explain.

Mike:  Summary Answer

  1. Essentially a vapor tax is a tax on electronic cigarettes, which have enjoyed increased use
  2. Since June of 2015 – so for almost a year – North Carolina has taxed electronic cigarettes
  3. Paid by the seller of the product, and tax is based on the capacity of the electronic cigarette
  4. Currently NC is one of only five states and DC with a vapor tax, but two counties and one city in the country also have the tax
  5. But over 20 other states are considering
  6. Supporters say it puts electronic cigarettes on a level playing field with traditional cigarettes
  7. I’m MW

Mary: And I’m Mary Walden for the North Carolina Cooperative Extension Service