Interim Committee Studies Taxing Vaping Products

The Interim Taxation committee discussed taxation of electronic smoking devices and even reviewed a draft of a potential bill to tax liquid nicotine. This is a conversation happening across the country. In

NCSL: State E-Cigarette Tax

early 2020, 21 states and D.C. have enacted vaping taxes according to the National Council of State Legislatures. States have different approaches to taxing these new products by either percentage of price, amount of e-liquid or a combination of the two.

Currently in North Dakota there is no tax on liquid nicotine or e-cigarettes. Traditional tobacco products are taxed at a minimal rate. In fact, the American Lung Association gives North Dakota a F grade for tobacco taxes due to the low tax rate which is the 4th lowest cigarette tax in the country.

The conversation at the interim taxation committee centered around two main ideas. Lawmakers received information regarding usage of e-cigarettes and testimony supporting a tax increase to help reduce usage, especially with youth.

The North Dakota Department of Health (NDDOH) provided testimony regarding vaping-related

illnesses in North Dakota. NDDOH has identified 20 confirmed and probable cases of vaping-related illnesses in 8 counties. Those are cases where the individual was hospitalized. Most of those illnesses are individuals 18-24 years old. In addition, 59 individuals have self-reported illnesses to NDDOH.

Raising the legal age to 21 to purchase tobacco products may help curb usage, but several who testified emphasized how that alone is not enough. The federal law was enacted Dec 20, 2019 which raised the age from 18-21. T21, as it’s called, has been a push by public health officials in several states including North Dakota over the past few years.

Tobacco Free North Dakota (TFND) Executive Director Heather Austin shared data showing how the percentage of high schoolers using cigarettes have decreased over the past 20 years but the percentage of those who are using e-cigarettes has dramatically increased to 27.5%. Austin also encouraged lawmakers to follow CDC practices and rates when exploring setting a tax rate for e-cigarettes.

Robin Lang, with the North Dakota Department of Public Instruction (DPI) also testified. She referred to statistics as reported by the Youth Risk Behavior Survey. This voluntary survey is conducted every other year for students in grades 7-12. Findings for 2019 showed 1/3 of ND high school students who took the survey reported using electronic vapor products which were mostly purchased at the store or online.

The Committee welcomed two students from Jamestown High School who shared their thoughts and concerns regarding the issue. Low prices with no tax raise during their lifetime and easy access to products were reasons the students gave for supporting increased taxation for cigarettes as well as establishing a tax for vaping products.

Sue Kahler, Bismarck-Burleigh Public Health Tobacco Prevention and Control Coordinator added

that the products are made to be concealed making it difficult for teachers to identify. The Fargo Cass Public Health reports an “alarming trend in Cass County regarding tobacco use, including e-cigarettes (vaping devices) and the number of citations given to minors” by School Resource Officers. The number of citations issued has nearly quadrupled in the last five years emphasizing how e-cigs have made an impact. Most recently elementary school students (ages 10-11) were cited.

The interim committee will continue its work to study the feasibility and desirability of applying an alternative or additional tax on liquid nicotine and electronic smoking devices. The committee did not take any action on the bill draft.

NDACo & NDCCA boards approved a resolution supporting the regulation and taxation of liquid nicotine products and electronic smoking devices.

2019‐16. Taxation of liquid nicotine and electronic smoking devices. The target marketing of electronic smoking and vaping devices has created an epidemic among North Dakota’s youth. While electronic smoking devices are defined as a product that may be used to deliver any aerosolized substance containing nicotine, the sale of such products is weakly regulated and is taxed like regular consumer products. State law regulates and taxes tobacco products separately, and at a higher rate, as it is recognized that tobacco use is the state’s number one cause of preventable disease and death, having devasting economic and serious health consequences. In order to treat all forms of nicotine delivery equally while deterring their use, particularly among youth, county officials support equitable regulation and taxation of liquid nicotine products and electronic smoking devices as part of the North Dakota Tobacco Products Tax. This Association further urges the Legislature to place a moratorium on the sale of liquid nicotine and electronic smoking devices until research and proper regulation can ensure the safety of the consumer.