Missouri Vapers Are Unlikely To Pay More Sales Tax — And It's Costing The State Millions

KCUR | By Aviva Okeson-Haberman

Published January 2, 2020 at 5:00 AM CST

Vaping products in Missouri are subject to a sales tax, but not the tobacco tax.

More and more young people are vaping, which has led states like Vermont and Illinois to tax vaping products. That’s unlikely to happen in Missouri.

In 2014, Missouri lawmakers decided that vaping products and alternative nicotine products shouldn’t be taxed or regulated as tobacco products, part of a bill that banned selling vaping products to minors.

While a couple of bills introduced for this year’s session deal with vaping, none add a tax and the governor hasn’t indicated support for a tax. Illinois, meanwhile, expects to get about $15 million in 2020 due to a new 14.5% tax.

Mark Meaney, the deputy director at the Public Health Law Center’s Commercial Tobacco Control Programs at the Mitchell Hamline School of Law in Minnesota, said Missouri’s law is “completely unique.”

“I think for a long time, the lot of state legislators weren't sure how to treat these products,” he said, “whether they were treated should be treated as tobacco products or something kind of separate.”

In most states, tobacco taxes don’t apply to vape products because they were written before e-cigarettes came on the market, Meaney said. The exception is Minnesota, which had a broader definition of tobacco products that included any tobacco-derived product.

Gov. Mike Parson launched the "Clear the Air" campaign in November to address the rise in vaping.

Gov. Mike Parson launched a in November about the dangers of vaping. Two people died from vaping in Missouri, among 54 across the U.S. last year. About 24% of eighth graders and 46% of 12th graders have vaped at least once in their life, according to the National Institute on Drug Abuse.

But Parson wouldn’t commit to a tax on vape products when asked at a news conference.

At 17 cents a pack, Missouri has the lowest cigarette taxes in the nation, according to the Campaign for Tobacco-Free Kids.

“I don’t know that pricing it out of somebody’s reach is always the right answer,” Parson said on Nov. 18.

Back in 2014, groups like the American Cancer Society Cancer Action Network opposed the bill, and then-Democratic Gov. Jay Nixon vetoed it, which the General Assembly overrode.

“This bill appears to be nothing more than a thinly disguised and cynical attempt to exempt e-cigarettes from taxes and regulations protecting public health,” Nixon said at the time, according to Columbia Daily Tribune.

While there isn’t a lot of research on e-cigarette taxes because they are newer, Meaney said studies on the effect of cigarette taxes show they can reduce demand.

“We know that kids are more price-sensitive consumers for a variety of reasons because they haven't been using the products as long,” Meaney said. “And then also because they tend to have less disposable income, which means that the increase in the price is more significant.”

What's ahead?

A couple of prefiled bills for the 2020 General Assembly session address vaping. Rep. David Wood, a Republican from Versailles, introduced two after students at Morgan County R-II School District approached him about the issue.

One would prohibit people from vaping on school grounds, and another would require schools to include teaching about the effects of vaping. In neighboring Kansas, the state board of education took it a step further, approving vaping policy recommendations that ban students and staff from even having e-cigarettes on school grounds.

Wood voted for the 2014 bill and said at the time lawmakers viewed e-cigarettes as a “potential safe alternative to cigarettes.”

“You don't want to put an inhibitor like a tax in front of a purchase of a product that may be safer ... So now I think with the new evidence that we've had, we're going to have to revisit some of those things and take a new look at it through different eyes,” Wood said. “Because it's becoming more and more obvious that there are some dangers inherent to that industry.”

When it comes to adding a state tax to vaping products, Wood said he doesn’t know if that will happen, saying “it's very hard to add taxes to something in the current atmosphere.”

Aviva Okeson-Haberman is the Missouri government and politics reporter at KCUR 89.3. Follow her on Twitter: @avivaokeson .