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The Legislature’s e-cigarette tax showdown

A woman smokes an e-cigarette. Credit: Photo: Michael Dorausch

Are they 'God's work' or just another harmful tobacco product? Either way, Rep. Reuven Carlyle, D-Seattle, has introduced a bill this session to tax electronic cigarettes similarly to tobacco cigarettes. Carlyle's bill would install a 95 percent "Other Tobacco Product Tax" on e-cigarette wholesalers and make it illegal for kids 18 and younger to use e-cigarettes.

At the Friday hearing on the bill, the crowd protested the legislation to the House Finance Committee, of which Carlyle is chairman.

An e-cigarette, which looks a little like an actual cigarette, is really just a tube with a heated atomizing device in it. A flavored liquid — either laced with nicotine or nicotine-free — is poured in and the heating atomizer turns the fluid into vapor, which is then inhaled or "vaped".

It's a way of smoking tobacco and other products that's exploded in popularity: Between 2008 and 2012, the number of e-cigarettes sold grew from 50,000 to 5 million, according to USA Today.

Carlyle's tax would raise an estimated $3.44 million in fiscal year 2014-2015, $38.8 million in 2015-2017 and $76 million in 2017-2019. Most of that money would go toward paying for state education improvements required by a 2012 Washington Supreme Court ruling. Sen. Andy Hill, R-Redmond, has introduced a companion bipartisan bill in the Senate. 

The devices cost anywhere from $35 to $200 and Friday's testimony indicated that 10 milliliters of the vaping liquid cost just $8, but equal the nicotine content of five packs of tobacco cigarettes. A pack of cigarettes on the other hand costs between $7 and $10, of which slightly more than $3 is the state tax on tobacco products.

Medical professionals are still split about the health effects of e-cigarettes. A July 2013 World Health Organization report ruled that available research cannot say how safe e-cigarettes are. Susie Tracy, representing the Washington State Medical Association at Friday's hearing, said that the medical association supports the tax on e-cigarettes. 

Still, a February 2011 article in the Journal of Public Health Policy was cautiously optimistic, saying that e-cigarettes are healthier than tobacco cigarettes.

Carlyle is not convinced. "The medical data is not making the case that it is less deadly," he said Friday.

"It is clear this is a nicotine product infusing nicotine into the bloodstream in a direct way."

During testimony Friday against the bill, opponents contended that supposedly safer e-cigarettes help smokers wean themselves off of tobacco cigarettes and keep kids from graduating to more dangerous tobacco products. A tax, they said, would only send e-cigarette sales to other states. E-cigarette smokers, they argued, rarely move up to tobacco cigarettes.

"It's called a cigarette, but it's not a cigarette at all," said Zack McLain, co-owner of Future Vapors in Seattle's Capitol Hill neighborhood. "… It's a healthy alternative to a cigarette. … If this excessive tax goes down, it'll discourage newbies from coming in and giving it a shot."

"The most egregious part to me: Why take it away from the kids?" said finance committee member Rep. Cary Condotta, R-East Wenatchee. Another committee member Rep J.T.Wilcox, R-Yelm, thought the bill is a blatant tax grab.  

Rep. Dick Muri, R-Steilacoom and not on the committee, testified that the military routinely recommends e-cigarettes as alternative to tobacco. "These people are doing God's work," he said. "… Not only should we not tax them. We should tax-exempt them."

"We have 10,000 customers at two stores," said Kim Thompson, owner of  Pierce County's The Vaporium. "That means we've converted 10,000 people from smoking to vaping."

"Overtaxing small business will mean the end of small businesses," he asserted.

Jim Oliver, a co-owner of the Steampunk Vapor Lounge in Tacoma, put it more dramatically. "You're telling smokers to either quit or die."

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