Utah Imposes E-cigarette Registration and Taxes

Published on September 2, 2015

E-cigarette in Salt Lake City For anyone unfamiliar with e-cigarettes, they’re electronic devices that use vapor to simulate the feeling of smoking without the tobacco. It’s been marketed as a healthier alternative to inhaling cigarette smoke, which has helped drive its popularity among young adults. It also doesn’t hurt that using e-cigarettes is statistically cheaper in the long run, but that might be about to change.

The Electronic Exemption

Because the devices don’t always have nicotine, e-cigarettes can’t be classified as tobacco products under the traditional definition of the term. This means that the devices – and by extension the sellers – aren’t covered under the normal tax schemes that govern such products. This allows e-cigarette providers the luxury of selling their wares at lower costs, allowing them to gain a wider audience.

This situation changed, however, as the Utah State Tax Commission passed a resolution placing taxes specifically on such products, becoming effective on July 1st. According to the announcement, sellers of e-cigarettes and e-cigarette supplies who are not selling other cigarette or tobacco products will need to register with the Tax Commission.

The E-Cig Registration

The process will require the sellers to pay a $30 licensing fee, which will allow them to continue their business within the State of Utah. Only the owners of businesses that sell e-cigarettes and e-cigarette supplies can register for the license; private citizens will not be issued a license.

The registration of e-cigarettes places the businesses under the tax compliance schemes of Salt Lake City and other major territories of the State. These schemes will require businesses to take careful stock of their inventory, be more careful about the age of their clientele, as well as guard the maintenance of their license.

Overdue and Welcome Regulation

This will take some adjustments on the part of business owners, which will most probably affect the size of their regular customer base. Fortunately, e-cigarette business owners can turn to the best practice models of their tobacco counterparts for guidance whenever they get stuck on a compliance or filing matter.

Taxes on e-cigarettes aren’t the end of the world for the industry; it’s simply a form of regulation that the industry needs to beef up their credibility with the American public.