(The Center Square) – Bills that would regulate the vaping industry in Tennessee and add a new taxing structure are not meant to harm the industry, the sponsors said.
“It is an effort though to clean up the street from the influx of illegal Chinese vape products that are addicting our children and wreaking havoc on our schools,” said Rep. Ken Yager, R-Kingston, the main sponsor of Senate Bill 763.
Yager’s bill and House Bill 968, sponsored by Rep. David Hawke, R-Greenville, set up a universal carding system that requires retailers to check for identification “on the basis of appearance that the prospective purchaser or recipient may be under 30 years of age” to enforce the law that bans the sale of the products to anyone under the age of 21.
Lawmakers have had major concerns for several years about the presence of vaping products in the schools, Hawk told the House Government Operations Committee on Monday.
A January report from the Tennessee Advisory Commission on Intergovernmental Relations said Tennessee youth use vaping products at twice the rate of the nation – 22% to 10%.
But the bills also add a tax on closed-system vapor products of 7 cents per milliliter of consumable material contained in the vapor product and a 10% tax on the wholesale price of open-system vapor products. The tax could add $16 million to the general fund annually, according to the bill.
A vapor product registry would oversee and collect the taxes. The state would need four employees for the office at a cost of more than $442,000 in the first year and $281,000 in future years, according to the bill.
If passed, the bill would do significant harm to the vaping industry, Danny Gillis, president of the Tennessee Smoke Free Association and the owner of three vape stores said.
“This bill would immediately put 99% of vapor products off the market,” Gillis said. “It will create a new and unfair wholesale tax structure. If this bill passes, it will put 700,000 adult nicotine consumers in Tennessee without access to safer, alternative products and approximately 700 stores will end up closing, including three of my own, and approximately 2,220 jobs will be lost.”
The report from the Tennessee Advisory Commission also cast doubt on the effectiveness of taxes and a registry.
“Yet there is limited research showing whether a vape directory would decrease youth vaping rates,” the report said. “Convenience store owners support the idea, but vape shop owners say a state directory would be redundant with the Food and Drug Administration’s list of authorized vapor products, would be difficult to maintain, and wouldn’t reduce youth access to vapor products.”
The House Government Operations Committee agreed Monday to defer the bill to March 10. The Senate version of the bill passed the Senate Commerce and Labor Committee last week and was referred to Senate Finance, Ways and Means.
