Last Minute Change in Kentucky Takes E-Cigarettes Off Tax Bill

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In an 11th-hour turn of events, the Kentucky legislature chose not to include e-cigarettes in its latest tax overhaul bill, despite state lawmakers claiming last week that they did.

House Bill 366 was originally supposed to include language imposing a 15 percent on e-cigarette products, and lawmakers were under the impression that this was the case when the bill was introduced and rushed through the legislative branch at the Capitol. However, the bill only referenced e-cigarettes once, and not on the page addressing taxation.

According to local website, Kentucky New Era, Senate Republican spokesman John Cox said that language about e-cigarettes was mistakenly included in the version sent to the media. This is quite the turnaround after weeks of reports by various sites that have sounded off on the state’s tax increase which could have been expected to raise $245 million over the next two years.  

Lobbying

The Kentucky Smoke Free Association was instrumental in lobbying against including vapor products as part of the tax changes. KSFA is a consumer advocacy group that focuses their lobbying concerns on tobacco harm reduction by encouraging smokers to quit combustible cigarettes using vapor products. Jason Underwood, a lobbyist on behalf of KSFA from Frankfort, said the fight was touch-and-go, but that their lobbying attempts were ultimately successful.

“I got the one-page summary they handed out Monday and saw the tax was in there. We were a little concerned,” Underwood said. “But those who had the final word clearly made the right decision.”

Underwood told Kentucky New Era that vaping saves money for Kentucky’s Medicaid budget because its practitioners tend to be people trying to quit smoking. Roughly one-third of the state population gets health coverage through Medicaid, which receives funding from both the federal and state governments.

“I can tell you that many of the conversations we had (with lawmakers) this year centered on the fact that vaping products should not be counted with tobacco products, because there is no tobacco in our products,” Underwood said.

What Now

Ultimately, the state’s tax bill fights aren’t over, because Governor Matt Bevin vetoed the law in its current form, which is something the legislature will have to deal with when it returns to Frankfort on Friday for the its last days in session. The House and Senate can override his veto with a constitutional majority — at least 51 members of the House and 20 members of the Senate.

As of 2014, Kentucky had the highest percentage of smokers in a state, topping the Gallup list with over 30 percent of its population, and it has shared one of the top two spots with West Virginia since 2008. With numbers like these, the state appears to be just the kind of place where tobacco harm reduction is needed most.