New Mexico interim committee recommends taxing e-cigs at 4 cents per MG of nicotine ($28.80 on a 30 ml bottle of 2.4% nicotine)

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Will post more later:

UPDATE:

As its meeting today, the tobacco Settlement Revenue Oversight Committee voted to **recommend** or not recommend the following bills be introduced in the 2015 legislature:

(Again, these are just recommendations -- Republicans have control of the House for the first time since the 1950s and Gov. Martinez is unlikely to accept any tax increases since she seems to have aspirations to run for President or Vice President, so we have a lot of room to stop the tax)

(1) RECOMMEND that e-cigarettes be taxed at 4 cents PER MG of nicotine. A 30 ml bottle of 24 mg/ml contains 720 MG, which means that a 30 ml of 2.4% nicotine would have a $28.80 tax! (4-0 -- All 4 Democrats McSorley, Trujillo, Lopez, and Papen in favor; Republicans Youngblood left the room before the vote)

(2) RECOMMEND the re-introduction of last year's sales ban to minors that would not have classified e-cigarettes as tobacco products (3-1 -- Cisco against)

(3) DO NOT RECOMMEND a new bill that would ban sales to minors while also labeling e-cigarettes as a 'tobacco product' (2-2 -- Democrat Trujillo and Republican Youngblood against)

Edit: This post originally stated that Rep. Fajardo (R) didn't vote on the tax bill. It's true she did not vote, but that's because she is only an advisory member, not a voting member.

I'll also add that Rep. Youngblood (R) appears to have dedicated herself to running the clean youth access bill in 2015. New Mexico vapers need to support her and her bill as it faces attacks from the Cancer Society, Lung Association, etc.

 

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Additional notes:

- Liz Thomson, who lost her race to Conrad James, did not attend the hearing today.

- In regards to the 4 Democrats who voted for the tax, I've been told most or all of them are outside the mainstream of the NM Democrats in the Senate (i.e., they're far left of center).

- Cisco McSorley just joked as hearing ended that something can get funded "once the e-cigarette money starts rolling in."

- I had the opportunity to talk with NM Governor Susana Martinez about e-cigarettes this week for 10-15 minutes on her campaign bus. She is incredibly anti-tax (and clearly has political aspirations of running on the platform of reforming a state without raising taxes) and has no appetite for taxing e-cigarettes. She indicated she'd veto any bill to tax e-cigarettes.

- For the first time since Eisenhower, Republicans are in control of the New Mexico House. It seems unlikely that they'll have an appetite for raising taxes and especially not on a group of people that helped elect one of their new representatives. However, politics is politics, and things can always change.

 

[Mogar]

I am unable to locate this anywhere. I think the numbers are far from accurate, but I have been wrong before. I have been told of other taxes from different places but a 200 - 300% tax on a product is too high and it would most likely be squashed very quickly.

 

[Placebo Effect]

View attachment 197465 1.pdf

Above is the recommended tax bill. Page 11 -- 4 cents per mg of nicotine.

Attached below (197946 1.pdf) is the common sense bill to ban e-cigarette sales to minors without labeling it as a tobacco product.

 

[Nate760]

I would love to hear the rationale for creating a nicotine excise tax on vapor products, but not on tobacco itself or any other non-tobacco nicotine product.

This makes about as much sense as taxing the ethanol in beer and wine, but not hard liquor.

 

[Bill Godshall]

Nate wrote:

I would love to hear the rationale for creating a nicotine excise tax on vapor products, but not on tobacco itself or any other non-tobacco nicotine product.

New Mexico already taxes cigarettes and little cigars at $1.66/pack, and taxes OTP at 25% of manufacturer's price.

 

[Nate760]

New Mexico already taxes cigarettes and little cigars at $1.66/pack, and taxes OTP at 25% of manufacturer's price.

Right, but that's an excise tax on tobacco itself, rather than a tax on the nicotine it contains.

 

[squee]

(Again, these are just recommendations -- Republicans have control of the House for the first time since the 1950s and Gov. Martinez is unlikely to accept any tax increases since she seems to have aspirations to run for President or Vice President, so we have a lot of room to stop the tax)

Since the Republicans have the house and it's a Republican governor, I don't see why you need any 'room' to stop the tax - Surely they won't pass a tax in the house and surely the Gov wouldn't sign it.

Just like all the rest of the states that now have Republican controlled state houses and/or governors. No need to do anything

Problem solved, right?

 

[Bill Godshall]

If nobody opposes proposed e-cig taxes, they are far more likely to be enacted into law (regardless of which political party controls the legislature and/or governor's office).

Besides, campaigning against and defeating an e-cig tax proposal in any state (and publicizing the victory) discourages governors and legislators in other states from proposing e-cig taxes.

 

[Nate760]

Besides, campaigning against and defeating an e-cig tax proposal in any state (and publicizing the victory) discourages governors and legislators in other states from proposing e-cig taxes.

If state legislators and executives see an opportunity for an easy cash grab that will provoke little opposition from the populace, they will take it. None will be dissuaded by any concerns over ideological purity, and by no means does this apply only to smoking or vaping.

 

[5150Marley]

Will this apply if the e juice is shipped to another state.. or just if the juice is purchased in NM?

 

[Placebo Effect]

Since the Republicans have the house and it's a Republican governor, I don't see why you need any 'room' to stop the tax - Surely they won't pass a tax in the house and surely the Gov wouldn't sign it.

Just like all the rest of the states that now have Republican controlled state houses and/or governors. No need to do anything

Problem solved, right?

I assume you're joking. There is no guarantee and we have to deal with the possibility of RJ Reynolds trying to convince the NM Legislature to pare down their tax and pass a "small" one like they are pushing in Michigan.

Will this apply if the e juice is shipped to another state.. or just if the juice is purchased in NM?

Yes. As with just about any state tax laws, it will be a violation of the law to import taxed products into the state if you do not report your purchases and pay taxes to the state government.

 

[Nate760]

Yes. As with just about any state tax laws, it will be a violation of the law to import taxed products into the state if you do not report your purchases and pay taxes to the state government.

I always report my online purchases to the state revenue board. And I've never downloaded copyrighted material from the internet without paying for it.

 

[Kent C]

Anything could happen before the newly elected majorities take office. In fact, it has been a practice to rush things through in just these situations, going back to John Adams packing the judiciary after losing the Presidency to Jefferson.

 

[Placebo Effect]

Anything could happen before the newly elected majorities take office. In fact, it has been a practice to rush things through in just these situations, going back to John Adams packing the judiciary after losing the Presidency to Jefferson.

Fortunately, as far as I know New Mexico does not have a 'lame duck' session.

 

[Placebo Effect]

New Mexico Vapers Alliance Joins AVA in Opposing Dramatic E-Cigarette Tax Hike - The American Vaping Association

 

[JimmyDB]

Just crazy... so my $50, 1000mL bottle of 10% nicotine... would carry a $4,000.00 tax on top of the $50 cost?! 8000% tax?!

 

[DrMA]

Just crazy... so my $50, 1000mL bottle of 10% nicotine... would carry a $4,000.00 tax on top of the $50 cost?! 8000% tax?!

Excellent example. This tax proposal is obviously beyond ridiculous. It is either a grandstanding move known to have zero chance of passage, or a thinly-veiled attempt to enact a de facto ban on e-liquid.

 

[Alto101]

Excellent example. This tax proposal is obviously beyond ridiculous. It is either a grandstanding move known to have zero chance of passage, or a thinly-veiled attempt to enact a de facto ban on e-liquid.

I am thinking it is just a first step in a negotiation process. They start off with a ridiculous amount and then offer to give in and lower it to something more "reasonable". Regardless, any tax is not right and I hope will be quickly defeated!

 

[pamdis]

My guess is they don't even know that e-liquid comes in different size bottles. They see the disposables and prefilled cartridges in the convenience stores, and think they are pulling a fast one by applying the tax by mg. So they haven't taken a 10, 30, or 60, etc. ml bottle into account.