New Jersey Governor Chris Christie is trying to hit his state’s e-cig shops with a new tax to help with the state’s $807 million dollar deficit. New Jersey is the only U.S. state that spends none of its own money to combat nicotine addiction; New Jersey would use the estimated $35 million in annual revenue for general spending. Christie’s plan follows a deal on tobacco bonds in March that contributed to a credit downgrade for $2.4 billion in state general-obligation debt. While this tax will surely raise the prices of e-cigs and their liquid vapors, will the increase in prices really deter e-cig users?
The Governor has put a task force in place to figure out what to do with the funds. The task force’s suggestions included opening “recovery high schools” to support teens in treatment, launching a public awareness campaign that explains how addiction is an illness, expanding treatment services, and mandating that doctors take part in the state’s prescription monitoring program. The task force also believes that even more revenue could be made for drug treatment and smoking cessation programs by raising the tax rate on smokeless tobacco products, which is a 30 percent levy for retailers who purchase the product wholesale. However, the tax hike may not deter e-cig buyers, as the tobacco cigarette tax hike did not deter many of its purchasers.
Now, many know that the rise in cigarette taxes a few years ago did little to deter hardcore tobacco cigarette smokers from quitting. The same may happen with e-cigs if these new taxes are enacted. People will want to smoke will smoke, and at times will budget someone out so that they can afford their cigarettes, or in this case, e-cigs. The process to raise taxes on e-cigs may be easy, as they are not FDA-approved as a smoking cessation product, as many vendors and marketers say that they are. Only time will tell if these taxes are enacted, what the excess is used for, and if customers will continue to purchase e-cigs. However, the e-cig customer base seems strong, the tax hike may not matter at all, and New Jersey e-cig shops may not be majorly affected.