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Utah could impose a 86.5 percent tax on e-cigarettes, the same that is on other non-cigarette tobacco products — under a bill proposed Friday.
E-cigarettes "are not taxed now because they are relatively new and they have never been put into the tax code, or into any code, as a tobacco product," said Rep. Paul Ray, R-Clinton, sponsor of HB333. "It has nicotine in it, so it is a tobacco product."
Ray says the tax aims to cut down on use of e-cigarettes by underage youths.
"The data we have shows that across the country, the higher the price point is for tobacco products, the less kids use them," he said. "That's the whole idea, to drive kids away from e-cigarettes and make them less accessible."
He introduced the bill following a report earlier this week said that e-cigarette use by Utah teens has quintupled since 2011.
State surveys show that one of every 10 youths in grades 8, 10 and 12 now report vaping e-cigarettes within the past 30 days, and nearly a quarter report that they have used them at some time in their lives. State health officials recommended raising taxes on e-cigarettes as a step to combat this trend.
State health officials blame increases on advertising depicting e-cigarettes as safer than regular cigarettes, although they say nicotine in them is addictive and dangerous for young people. They said it also has led some young Mormons to believe that e-cigarettes do not violate that faith's ban on tobacco use.
"E-cigarettes are targeting youth," Ray said. "When you have banana split and root-beer flavorings, they are not going after adults."
Ray's bill would use extra revenue from the tax to improve health care in rural areas. But lawmakers also are considering using such a tax to help fund expanding Medicaid to people now not covered in Utah.
Senate President Wayne Niederhauser said Friday that if e-cigarette taxes are used to expand Medicaid, "it creates a greater argument to pass a bill on e-cigarettes because it would have a purpose."
But Senate Democratic leader Gene Davis, D-Salt Lake City, warned, "Who becomes addicted: the state or the person smoking e-cigarettes?"
Ray said high school students have gathered 10,000 signatures in favor of his bill, and several city councils have passed resolutions endorsing it.
Meanwhile, The e-cigarette industry attacked the proposed tax hike.
"Seeking a punitive tax on vapor products is the wrong approach. It's time Utah embraced harm-reduction, instead of a regressive tax that pushes vapers back to combustible tobacco or one that creates a black market," said Shilo Platts, with the Utah chapter of the Smoke-Free Trade Alternatives Association.
"Let's focus on enforcing our current laws, and continue to work together to keep these products out of the hands of minors," he said, "while ensuring that vapor products remain a viable option for adult smokers."