The Indiana House has endorsed a bill to start taxing the liquids used in electronic cigarettes.
House members voted 53-40 Tuesday in favor of the proposal setting a 4 cents per-milliliter vaping liquid tax. The approval came after the tax rate in House Bill 1444 was cut in half.
The measure moves to the Senate for consideration.
Authored by Ways and Means co-chair Tim Brown, the original bill called for a tax of 8 cents per milliliter on e-liquids that contain nicotine. According to the Legislative Services Agency, the tax, to be paid by distributors, would generate between $4.16 million and $7.33 million in annual revenue for the state. Under the modified rate, it could bring in between $2 million and $4 million a year.
While some legislators questioned whether the bill would be creating a new tax, bill sponsor Rep. Tim Brown of Crawfordsville said the measure is aimed at taxing a nicotine-containing product similar to how cigarettes are taxed. Brown says the tax could also discourage vaping, which he argues leads many young users to cigarette smoking.
Eight other states currently tax e-liquids, but three states—California, Pennsylvania and Minnesota—tax it based on the wholesale value instead of by the unit.