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E-Cigarettes Could Be Taxed By States Missing Out on Tobacco Revenue

  • At least 29 states considered a tax, four approved so far
  • Vaping market projected to triple to $15.9 billion in 2019

To the average user, everything about e-cigarettes and vaping devices -- the look, the smell, the taste, the satisfaction -- feels as good or better than the traditional match-lit version. But to cash-craving states, there’s one important thing missing: taxes.

U.S. cigarette smoking rates are falling, and the number of Americans who vape is on the rise. While the long-term public health effects aren’t certain, the impact on state budgets is clearer. After peaking at $17.1 billion in 2011, state cigarette tax receipts fell to $16.3 billion in 2014, according to a report from the Orzechowski & Walker market research firm posted by the Federation of Tax Administrators. Four states have already approved levies on e-cigarettes and related products, and the West Virginia legislature is considering its own tax.