A key Georgia House committee approved a 7% tax on vaping products Wednesday but declined to take on a hike in tobacco taxes.
Vaping products could be taxed at as much as 7% of the wholesale price, depending on the type of device. That would add about $6 million per year to the state’s general fund, according to the Georgia Budget and Policy Institute.
The rate is designed to be similar to the 37-cent tax for tobacco products, said Rep. Bonnie Rich, a Suwanee Republican.
“The imposition of the excise tax is meant to create parity,” Rich said. “This is a nicotine delivery system. It’s only fair that there will be a comparable tax, similar to the Uber versus taxi issue, similar to the Airbnb versus hotels. So we’re just trying to achieve parity here. The tax attempted to mirror as closely as possible the cigarette excise tax that we already have, which is, as we all know, is low.”
Georgia has one of the lowest cigarette taxes in the nation.
The vaping bill would not change that, even though some have pushed hiking the cigarette tax as a way to offset the coming budget shortfall by raising hundreds of millions of dollars a year.
A tobacco tax hike is just not in the cards, said House Ways and Means Committee Chairman Brett Harrell, a Republican from Snellville.
“This is very narrowly tailored for that one single category of products, and that being the vapor products,” he said. “I am fully aware that there’s a number of representatives and constituencies that would like to see modifications to other products and other rates change. Right, wrong or indifferent, that will not be a part of this bill.”
House Minority Leader Bob Trammell, a Luthersville Democrat, asked whether Harrell would entertain amendments.
“I could entertain them if your desire is to kill the measure,” Harrell said. “That’s your prerogative.”
Trammell said after the meeting he wanted to raise the tax per cigarette pack to $1.35, the same price a group of Senate Republicans pushed for the day before.
Lawmakers scuttled a different proposed tax on vape products in March, before COVID-19 prompted lawmakers to suspend the 2020 legislative session. Stay-home orders in April caused a deep recession as businesses closed, which sparked a massive budget shortfall set to cause painful budget cuts.
Though Georgia schools won’t reopen until August at the earliest and other gathering spots are closed, young Georgians are still at risk of becoming addicted to nicotine, Rich said. She said she hopes the bill will help steer them away from that.
“The vaping epidemic among our youth has not subsided,” she said. “We have had some really big problems before us in the last few months, but this has not gone away. It is still very, very important to our families, to have the partnership to make sure that this new nicotine delivery system is regulated in the way that our other nicotine and tobacco products are regulated.”