Vaping shops fear new tax

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Apr 15, 2019 10:14    Quote
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 Take a look around Get Your Vape Wholesale On in Emmaus and you'll see dozens of bottles of vaping liquid in every imaginable flavor, some you probably wouldn't imagine, and a selection of devices that turn it into vapor that can be inhaled.
But these days, all shop owner Dave Petrozzo sees is red ink. And he's not the only one. The statewide association that represents vape shops says about a third of its members have gone out of business since a new 40 percent wholesale tax on the industry took effect in October.
The new tax, which is paid by shop owners on all vaping liquid and accessories they stock, has taken a bite out of the bottom line at Get Your Vape On by forcing Petrozzo to pay 40 percent more for every item of inventory on his shelves. Until it sells, that's money he's simply out.
He marked up the price on his products to recover the cost of the tax, but that has pushed some of his customers to buy online, where he says sellers have been less than conscientious about remitting the wholesale tax.
"This is the first time I've ever been in debt," Petrozzo said. "It has affected the business dramatically. There are certain products I can't carry because a lot of people are buying online. Then we have to look for products that we can get at a decent price and sell them to make some money. But some of the stuff, it's impossible.Sen. Camera Bartolotta, a Republican who represents parts of Beaver, Greene and Washington counties, this week proposed a change in the state's vaping tax that would help store owners such as Petrozzo. It would replace the 40 percent tax with a 5-cent-per-milliliter levy on consumers when they buy vaping liquid, often referred to as "juice."
"It's much too burdensome on a burgeoning industry that could be providing revenue by way of taxes to Pennsylvania, but we are doing the opposite, we are killing off an industry expecting it to give us millions of dollars in revenue," she said.
Senate Republicans have not taken a position on the proposal and it's not clear if the plan will become part of 2017-18 budget discussions, which are just beginning to get underway, spokeswoman Jennifer Kocher said.The 40 percent tax has raised $6.1 million since it took effect in October, according to the Pennsylvania Department of Revenue, including $1.6 million in February. That doesn't include revenue from a "floor tax" provision that required retailers to make a one-time payment based on the value of items on their shelves when the tax kicked in.