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Wisconsin – [Concluded] Stop a Vapor Tax (2021-23 Budget)
- April 6, 2021
current status
Budget
proposed
public
hearings
passed
House/Senate
Signed by
Governor
Wisconsin’s Budget Process
- Budget instructions are sent to state agencies in June 2020.
- State agencies submit budget requests in September 2020.
- The governor submits his or her proposed budget to the Wisconsin State Legislature in January 2021.
- The legislature adopts a budget in June or July 2021. A simple majority is needed to pass a budget.
- The biennial budget cycle begins in July 2021.
The 2021-2023 Wisconsin budget is moving toward a series of public hearings, starting on Friday, April 9.
Friday, April 9th – Whitewater
10:00 AM to 5:00 PM
University of Wisconsin-Whitewater
Irvin L. Young Auditorium
930 W. Main St.
Whitewater, WI 53190
*All attendees will be directed to park in Parking Lot #1
Wednesday, April 21 – Rhinelander
10:00 AM to 5:00 PM
Hodag Dome
665 Coolidge Ave.
Rhinelander, WI 54501
Thursday, April 22 – Menomonie
10:00 AM to 5:00 PM
University of Wisconsin-Stout
Great Hall of the Memorial Student Center
302 10th Ave E
Menomonie, WI 54751
Wednesday, April 28 – Statewide Virtual
10:00 AM to 5:00 PM
Virtual
*Details pending
This year, Governor Evers is proposing a 71% wholesale tax on vapor products which would bring them under the same tax rate as other tobacco products, including some combustible products. Other proposals include banning vaping in the same places where smoking is prohibited and funding an anti-vaping education program.
While smokeless tobacco–also very low risk compared to smoking–is lumped into this category, there is no justification for adding yet another low risk nicotine product to tobacco control taxes intended to discourage use.
With the decline in smoking flattening out in response to 1) the pandemic and 2) strict regulation of vapor products (e.g. flavor bans and high taxes), it does not make sense for Wisconsin to enact a new tax on products that are helping people quit.
People who smoke deserve access to affordable low-risk nicotine products and the extra tax proposed by Governor Evers will likely keep people away from safer alternatives.
Take Action Now!
Wisconsin residents are invited to submit comments either in support of or in opposition to provisions in the state’s proposed budget..
The “E-cigarette Excise Tax” is item 16 in Governor Evers’ 2021-2023 budget proposal.
- “The Governor recommends imposing a tax on vapor products at the rate of 71 percent of The manufacturer’s list price. This tax would replace the existing tax of 5 cents per milliliter which only applies to vapor liquid. The recommended tax would apply to an electronic cigarette, electronic cigar, electronic cigarillo, electronic pipe, or similar product or device, as well as any container of a solution or other substance that is intended to be used with these items. The fiscal impact is an estimated increase in tax revenue of $12.7 million in FY22 and $16.6 million in FY23.”
The budget also includes a recommendation to ban vaping indoors just like smoking (item 65 “Indoor Vapor Product Use”).
- Please include your opposition to this proposal as well. Businesses and workplaces in Wisconsin already have the authority to prohibit or allow vaping as they see fit. This proposal is simply more of the same in terms of conflating the risks of smoking with safer alternatives like vaping.
- Share your experience with switching to vapor products. If affordability compared to continuing to smoke was a motivating factor for trying vaping or other smoke-free products, be sure to include that in your comments. Conversely, if the already high initial cost of these products delayed your first purchase, highlight this instead. Be sure to include any changes in your health that you’ve experienced as a result of switching to safer nicotine or tobacco products.
- Taxes on traditional cigarettes are intended to discourage use. But, e-cigarettes and other smoke-free tobacco products are estimated to be 98 – 99% less harmful than smoking, and discouraging their use is counter to the goals of reducing smoking rates.
- Other governments are taking exactly the opposite approach. Public Health England (the government public health agency) recently explicitly endorsed a policy of encouraging smokers to switch to e-cigarettes and vapor products (https://www.gov.uk/government/publications/e-cigarettes-an-evidence-update).
- Sin taxes are regressive. People who smoke and those who switch to vaping and other smoke-free alternatives are disproportionately poor and low income people. Sin taxes place unnecessary burdens on an already financially challenged group. To make matters worse, people in the low-income bracket are less likely to be insured and lack access to health care providers. The affordable resources available to these people have low success rates.
- Imposing a tax on these products will drive consumers to shop in neighboring states that do not have a similar tax. Concurrently, consumers will be encouraged to shop online for better deals, sending even more money out of the community. Local businesses will not be able to compete, be forced to close their doors, and jobs will be lost. This is bad for the state and will result in less revenue, not more.
- It is important to note that vapor products are already subject to a general sales tax.
- Taxing smoke-free tobacco and nicotine products in a manner similar to how combustible tobacco products are taxed sends a confusing and inaccurate message to would-be adopters that these two very different products present similar risks. The result of this message is that more people, those that otherwise would have switched to a smoke-free product, will be encouraged to continue smoking.