Thirty U.S. states and the District of Columbia will begin taxing vaping products and e-cigarettes on January 1.
In 2015, only three states and the District of Columbia taxed vaping products.
According to the Federation of Tax Administrators, states with no e-cigarette taxes as of February 2022 are: Alabama, Arizona, Arkansas, Florida, Hawaii, Idaho, Iowa, Michigan states, Mississippi, Missouri, Montana, Nebraska, Oklahoma, Rhode Island, South Carolina, South Dakota, Tennessee and Texas.
At the time of writing, Indiana does not have a state vaping excise tax, but it will go into effect on July 1 of this year. Alaska does not have a statewide excise tax on e-cigarettes, but some cities in the state have local taxes, including Anchorage and Juneau.
“More states are likely to begin imposing excise taxes on vaping products soon. At our last count, 12 states were considering increasing specific vaping taxes,” Langer wrote. “In addition, two states currently have local jurisdictions that impose additional excise taxes on vaping products: Cook County and the City of Chicago in Illinois, and Montgomery County in Maryland.”
Lange said there were a lot of challenges in keeping up with GST. Most importantly, you must properly invoice your customers to ensure that you are charging the correct tax.