SAVANNAH, Ga. (WSAV) — A bill that would impose a 7% excise tax on vaping products sold in Georgia now sits on the governor’s desk.

On June 26, the state Senate gave its final approval in a 45-8 vote of Senate Bill 375, following the House’s vote of 123-33 on June 25.

The bill would also allow only adults aged 21 and older to purchase vaping products in Georgia. 

“Convenience stores and gas stations are routinely selling these items to children, they had no reason to enforce the law because they didn’t have anything to lose except the sale itself,” said State Rep. Bonnie Rich, R-Suwanee, whose portion of the bill required any seller of vape products in Georgia to have a license from the Department of Revenue.

“Now, in order to have the right to sell, they’re going to have to follow the law and they’re going to have the Department of Revenue investigators kind of looking over their shoulders,” Rich told WSAV.com NOW.

In another effort to further protect youth from accessing vaping products, Senate Bill 375 also notes that no one, including adults or teachers, is allowed to have vape or tobacco products in school safety zones.

The bill’s 7% excise tax would be the first tax on vaping products in Georgia.

“The goal here was to put these vape products on par with the tobacco products, as the tobacco industry has, for a very long time, been paying excise taxes,” Rich said.

“It’s an issue of fairness to require these other nicotine delivery systems to pay an excise tax, as well, similar to what we did with respect to Airbnb and hotels, and Uber and taxis,” she said.

Nelson Hill, general sales manager of the Savannah-based Vape Loft, tells WSAV.com NOW that he believes the tax is fair. 

“We’re pretty happy with that,” Hill said. “We’re lucky to live in a state like Georgia where they don’t hate vaping; I think that there’s a lot of miseducation and misunderstanding about it.”

He says he doesn’t feel the tax would prevent his customers from enjoying vaping products.

“There’s money off some of these taxations that pay for and produce a lot of things that we need, like schoolbooks, and that’s where a lot of this tax money from Big Tobacco comes from,” Hill said, adding, “So with vaping, I think they’re just trying to figure out a place where they can use some of our tax money to help produce good, as well.”

The excise tax on vaping products could potentially raise between $9.6 million and $14.5 million in revenue.

Yaël Ossowski, deputy director of the Consumer Choice Center, says that the vaping tax would come at the expense of poor consumers and could push many Georgians back to traditional cigarette use, which would have a detrimental impact on public health.

“Vaping products don’t exist just for fun, these exist because they give an alternative to former smokers who want to quit, so because people have this option, they’re actually able to improve their life, they’re actually able to live longer,” Ossowski told WSAV.com NOW.

He says such a tax is almost like penalizing people for making a “more responsible decision.”

“People who have transitioned away from traditional tobacco products are now going to have to pay more for exactly what they bought yesterday, and the entire idea of this is that we need to raise money, but it’s really a drop in the bucket,” Ossowski said.

“If we look at what’s happening at the state level, there’s a lot of money in the rainy day fund, and we really think that trying to increase costs for consumers — specifically poor consumers — who are trying to make a better option for their lives is really unfair,” he said.

Now that the House has passed Senate Bill 375 and the Senate has made its final approval, Gov. Brian Kemp has until early August to decide whether to veto it or sign it into law.

“After those 40 days, if he does nothing, then the bill will go into effect; however, he also has the option of signing the bill within that 40-day period, which is kind of signaling that he really supports it,” Rich said.

The cigarette tax in Georgia remains the same at 37 cents per pack — one of the lowest cigarette tax rates in the country.

Originally published here.

The Consumer Choice Center is the consumer advocacy group supporting lifestyle freedom, innovation, privacy, science, and consumer choice. The main policy areas we focus on are digital, mobility, lifestyle & consumer goods, and health & science.

The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at consumerchoicecenter.org

It is unfortunate that President Cyril Ramaphosa did not use his 17 June announcement of modifications to South Africa’s level 3 lockdown as an opportunity to end the ill-considered ban on tobacco and related products.

Appropriately, on the same day, Africa Check confirmed that the government is losing around R35 million per day in excise taxes for tobacco products. South Africa is now one of the 20 most-affected countries by COVID-19 and case numbers keep rising. The tobacco sales ban will burden the health system with even more problems. Hence it’s time to stop this well-intended but harmful policy.

Ramaphosa claimed his silence on tobacco trading was because the matter is before court. But this was disingenuous. Over the last months, the government at multiple junctures changed lockdown regulations that were in the process of being challenged in court, likely in an attempt to save face. With the Gauteng High Court having dismissed the Fair Trade Independent Tobacco Association’s application to have the ban set aside, little stands in the way of government taking the initiative and doing away with this detrimental regulation that neither serves government’s nor consumers’ interests.

If it does not do so, it would defy belief that finance minister Tito Mboweni warned of the dangers of a cash-strapped government during the COVID-19 emergency budget while government persists with this fiscally irresponsible policy.

The amount of money lost in tobacco excise taxes government collects daily due to the ban is at least R35 million. This is not a mere number. Quantifying the opportunity costs to the South African economy that will occur once government grants South African Airways a contemplated R10.3 billion bailout, economist Jacques Jonker made some interesting calculations. A RDP house in South Africa is valued at around R158,000. An environmentally-friendly community clinic costs about R24.5 million. On those numbers alone, it seems that the state is losing what amounts to 30 RDP houses or 1.5 green clinics every day the cigarette ban continues.

Smoking legal tobacco products is not good for people’s health, but the sales ban did not stop people from smoking. Consumption has instead shifted to cigarettes purchased on the black market.

In the best case, this means just lost excise tax revenues for the government. Unfortunately, many cigarettes sold illegally do not come from legal manufacturers but from bad actors selling counterfeit sticks. Indeed, the counterfeit trade in South Africa has grown considerably since the lockdown began, according to Yusuf Abramjee. These products did not undergo any safety or quality tests and are much more harmful than legal products, potentially containing pesticides, arsenic, and rat poison.

On top of that, illegal street vendors do not comply with any health and safety or social distancing requirements. By banning the legal sales of cigarettes the government does, therefore, cause more harm than doing good.

But health is not and cannot be the only measure of an individual’s interests.

It is true that South Africa’s healthcare system is not up to standard, but that is no reason to keep cigarette sales banned. It is opportunistic and heavy-handed to use the government’s own historical shortcomings in building an efficient healthcare sector to justify curbing South Africans’ constitutional freedoms. It is also offensive to the Rule of Law, which requires reasonableness and impartiality in governance, not self-serving politicking.

It is also worth noting particularly with reference to COVID-19, however, that the danger to people with nicotine in their bodies – smokers – is less than the danger to others. The research in this regard ought not be ignored, as doing so has already caused government to enact policy that might see more people hospitalised for smoking counterfeit cigarettes. Keeping up the ban will cause an additional burden to South Africa’s hospitals, which is especially concerning given the rising numbers of COVID-19 cases in the country.

The continued ban on tobacco and related products is evidently irrational and counterproductive. It does not serve government, which as Mboweni’s emergency budget confirmed, is losing billions in revenue. It does not serve ordinary South Africans, who have certainly not stopped smoking but have turned to potentially dangerous, but available, cigarettes. And it does not serve the fight against COVID-19, as persons with nicotine in their bodies are at least at no greater risk for exposure, and at best have a smaller risk to contract the virus.

Originally published here.

The Consumer Choice Center is the consumer advocacy group supporting lifestyle freedom, innovation, privacy, science, and consumer choice. The main policy areas we focus on are digital, mobility, lifestyle & consumer goods, and health & science.

The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at consumerchoicecenter.org