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States and the Vape Tax Hammer - Why?


The calls to action for vape tax alerts have been popping out like chinchillas. I’m no expert, and normally a little behind the curve on current events, so I did a few searches to try and enlighten myself. I thought I’d share a couple of links, make a few comments, and see if it’s worthy of discussion, or if it just sinks into thread never never land.

Master Settlement Agreement payments, from tobacco companies by state:
Actual Tobacco Settlement Payments Received by the States (in millions)

Look up your state. I’ll use mine. Michigan received $256 million in 2017, from BT. If just 1 person in 20 (5%) switch from smoking to vaping (or just quit) that’s a 5% loss in MSA payment. That’s almost $13 million less MSA money coming in (for my particular state).

Now, from another site, I found this info about state’s ‘Tobacco Bonds’.
The Burning Truth About Tobacco Bonds

I was always under the assumption that the MSA payments to the states were tied to the Tobacco companies profits. Not so! It’s actually tied to the number of cigarettes shipped!
Ok, Tobacco companies sell ‘less’ cigarettes, so their profits must go down. Not so again! They just raise the price. In fact, their profits seem to be up! Selling less, but making more profits. I bet they’re laughing, as they hand out the bonus checks.

The states aren’t as fortunate. It appears the states couldn’t wait to get their greedy booger hooks on the money and sold bonds, against projected MSA payments they didn’t have yet. A drop in the MSA payments, due to less cigarettes shipped, means the states can’t make their payments.

Any wonder that the states are bringing down the vape tax hammer?

Anyway. I cannot vouch for the reputation, agenda, or moral standing of the two sites above. I know nothing about them. They just popped up in my search for more info.

I found the info somewhat enlightening.


There’s no accounting for bad accounting. :confused: States more often “run in the red”, so, any way they can squeeze a penny out of the locals for the love/need of their sins, they’re gonna do it! :face_with_symbols_over_mouth:

If government was smart enough to go easy on those taxes, they would make a metric crap ton more money in the end. Instead, they bring the hammer down so hard, they destroy (vape) businesses which could bring more money into their wicked little booger hooks.

And then there’s this quote from my latest favorite article, The Anatomy of a Moral Panic, concerning our culture:

“Politicians and regulators often react to moral panics by introducing legislation and regulations that are at best unnecessary and wasteful, at worst seriously harmful. Sometimes, when the subject of the panic is real but exaggerated you have the problem of a sledgehammer being used to crack a nut, an excessive and overbearing response. When the panic concerns something that does not actually exist, you can have laws that severely restrict people’s freedom or impose serious costs on them for no good reason whatsoever.”

…and thanks @d_fabes :nerd_face:, for sending me on a 2hr. internet exploratory jag, while I polished off a whole pot of coffee! :coffee::yum:


Totally agree. You’d think a reasonable tax on a growing industry would mean a revenue stream that grows with it.

Glad to be of service! :laughing:


The government is always trying to tax something that they think they can get money from. Vaping = New Tobacco taxes. Look at the states that taxed Marijuana when it became legal. Its money to them.

Do I agree, no. Just think in my opinion that they are trying to get a piece of something, because people are trying to go to vaping to quit smoking. One last attempt to get the taxes out of them.




Thanks for that, I’m heading to that right now. Vaping is an easy one to apply scare tactics to.


I was following your ‘If you are or know an Arkansas vaper’ thread, and that’s what lit my fuse, to go look a little deeper. Even though the topics are related, I didn’t want to derail your thread, so I started this one.