Some Delaware E-Cigarette Businesses Fear Losing Competitive Edg - WBOC-TV 16, Delmarvas News Leader, FOX 21 -

Some Delaware E-Cigarette Businesses Fear Losing Competitive Edge Because of Possible Taxes

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SEAFORD, Del. -- Some business owners in the e-cigarette industry are concerned about a proposal in Delaware Gov. John Carney's budget plans that call for classifying e-cigarettes under a taxable category of tobacco products.

The plan was part of Carney's budget proposal, unveiled last month in Dover, and contributed a relatively small chunk to an estimated $16 million in revenue from increased taxes on cigarettes and other tobacco products.

Under the plan, Delaware would raise a 15 percent excise tax on the wholesale price of "Other Tobacco Products" to 30 percent. E-cigarettes would be reclassified to fall under that category, as would moist snuff products.

But Dave Eisenhour, owner of the Delmar Vapor Lounge chain, said he was unhappy with the idea because it could eat into revenue used to pay employees and the cost of paying tax on products would trickle down to consumers in the form of price increases. 

"If our prices are higher than that, it's going to be very difficult for us to compete with the Internet, especially, and our neighboring states such as Maryland and New Jersey, which do not have taxes on e-cigarette products," he said.

Delaware's Department of Finance said it expects e-cigarette tax revenue to be an estimated $200,000 in fiscal year 2018, then $400,000 in fiscal year 2019.

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