(The Center Square) – A Tennessee bill that would establish a database for vaping products and sales would generate millions for the state’s general fund, the bill’s sponsor said Tuesday.
Senate Bill 763 would require vaping stores to register with the state. The legislation bans retailers from selling products. Civil penalties for failing to comply with the registry range from $500 to $1,500 for retailers and up to $10,000 for a manufacturer that sells a noncompliant product.
The legislation adds 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 bill initially directed revenue to a special fund. The Senate Finance, Ways and Means Committee agreed to amend the bill Tuesday and send revenue to the general fund.
The estimated revenue is about $16 million, but the costs to maintain and establish the database are not known, said bill sponsor Sen. Ken Yager, R-Kingston.
Retailers told committees the bill would decimate the industry.
“This bill would immediately put 99% of vapor products off the market,” Danny Gillis, president of the Tennessee Smoke-Free Association and the owner of three vape stores, told a House committee earlier this month. “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.”
Yager said that is not the bill’s intention.
“We are not all advocating the closure of any vape stores,” Yager said. “What we are doing is that we are setting up guardrails to make sure that the practices in these stores do not in any way harm the lives of young people and comply with the laws of Tennessee.”
The committee recommended approval 9-2, sending it to the full Senate for consideration. Its House companion has a hearing before the House Finance, Ways and Means Committee on Wednesday.
