Senate Bill 407 ~ Short Title: Modify Tax on Vapor Products
This bill is sponsored Senator Ben Clark. Senator Clark (D- Cumberland/Hoke) is a second term Senator that is seen by the Republican senate leadership as someone they can work with. Senator Clark recently took heat from his own party for voting for the Senate’s version of the “Religious Freedom” Bill.
This bill would change the tax on vapor products from the current five cent per fluid milliliter
(.05 X fluid milliliter) to a new formula. The new formula would tax both the nicotine concentration as well as fluid milliliter at a rate of 3 cent. (.03 X Nicotine Concentration) + (.03 x Fluid Milliliter) = Total Tax
This is concerning for a variety of reasons beyond the obvious tax increase on much of the industry’s products. Creating a more complex tax formula creates greater strain on the industry and makes future adjustments more complex and less likely to be transparent. This added tax on small business also makes entry level vapors that are attempting to transition from traditional nicotine products pay a higher tax rate.
Lobbyiest Jason Joyner will be working with Senator Clark and his staff to ensure in understands the implications of his desire to change the tax code. We will actively work to ensure that this bill doesn’t become law first through educating Senator Clark and then through a variety of legislative maneuvers
Senate Bill 286 ~ Short Title: Regulate the Sale of E-Liquid Containers
This bill is sponsored by Senator Stan Bingham (R-Davidson/Montgomery) and Senator Don Davis (D- Greene, Lenoir, Pitt, Wayne). Senator Bingham is a republican that is serving his eighth term in the NC Senate. Senator Davis is democrat serving his third term in the NC Senate. Both are well received within their respective caucus and have the ability to move legislation forward. They are also both men of logic that will listen to opposing viewpoints and attempt to understand the implications of what they are doing.
This bill would do the following:
(b) It shall be unlawful for any person, firm, or corporation to sell, offer for sale, or introduce into commerce in this State an e-liquid container unless the container meets all of the following requirements:
(1) Constitutes child-resistant packaging.
(2) Is labeled with safety warnings consistent with rules adopted by the North Carolina Commission for Public Health.
(c) Any person, firm, or corporation that violates the provisions of this section shall be liable in damages to any person injured as a result of the violation and also shall be guilty of a Class A1 misdemeanor
This bill is concerning as it would make the vapor industry in NC compete in an international market with restrictions that apply only to North Carolina. We will work to educate both Senators to educate them on the harm this bill could do to the industry in North Carolina in its current form. We will work with them on new language that is consistent with the current federal legislation so that the industry in NC is not forced into a competitive disadvantage. The bill makes the penalty the highest level misdemeanor, which is something that needs to be corrected regardless of any other specific point as it could place a small business owner in jail over a misunderstanding or misinterpretation of the law.
We must work to delay the implantation of this bill as its effects would be immediate as of December 1st, 2015 regardless of the status of pending federal legislation. As with any legislation that we undertake for SFATA-NC/NCVC all options are on the table in regards to strategy for correcting the negative impact of this bill. We will ensure that the message is sent that SFATA-NC/ NCVC is in favor of child resistant packaging and that we are working to implement that on a federal level.
Senate Bill 19 ~ Short Title: Revenue Laws Technical Changes
This bill is any example of common technical corrections in regards to tax policy that can hurt the industry if they are not monitored constantly. The bill allows for outside manufacturers to apply for a waiver of their tax increases by applying with the secretary of state.
The bigger issues with any proposed changes to the tax structure or revenue laws is that currently North Carolina treats the vapor industry’s products as both tobacco products as well as vapor products. Double classification can and ultimately will lead to double taxation if the industry doesn’t educate lawmakers about the industry and ensure a single, evidence based classification.
The 2014 short session bill that amended revenue laws resulted in the 5 cent per milliliter tax on vapor products. Bills involving tax or revenue laws must be monitored to ensure that the industry and the community at large are protected.
Lobbyist Jason Joyner will be meeting with the members of both financial committees to disucess SFATA's concerns reguarding regulation and taxation in NC.