Lawmakers mulling steep tax hike on E-cigarettes

TACOMA, Wash. -- State lawmakers are looking to levy a hefty tax on electronic cigarettes.

A House committee approved a 75 percent tax on the devices after originally considering a whopping 95 percent tax increase.

E-cigarettes are growing in popularity as more and more people look to quit their expensive and dangerous tobacco habits. Five years ago roughly 50,000 people owned E-cigarettes, but that number has skyrocketed to more than 5 million devices sold last year.

At the Steampunk Vapory Lounge in Tacoma, there's a speakeasy feel and a fruity aroma in the air. The customers aren't smoking tobacco or pot, they're vaping away on electronic cigarettes, or E-Cigs. And while it looks like smoke, they're actually exhaling water vapor.

"If it looks like a duck and quacks likes a duck, it's a duck, and that's the way they view E-cigarettes. It looks too much like smoking," said Natalie Durflinger, co-owner of Steampunk Vapory Lounge.

Marc Jarrett's company creates the nicotine infused juices that are vaporized in the E-cigarettes. He said most people use the nicotine to quit cigarettes.

"You would think that would be the case that people would gradually want to increase their dosage, but what we found is absolutely the opposite," he said.

In a hastily-written bill, state lawmakers are looking to tax E-cigarettes like tobacco. After originally mulling a 95 percent tax, they decided to move forward with a 75 percent tax, which is higher that currant taxes on cigarettes, pot and liquor.

Jeff Call ran a vapor bar that included marijuana until he was forced to shut down. He believes lawmakers don't know the difference between vaping and smoking.

"They let money get in the way of everything. They are blinded by money," Call said.

At the Vaporium, which was one of the first E-cigarette shops in the state, they are already facing stiff competition.

"We are already handicapped by the internet, because internet sales don't charge any tax. We already pay 10 percent higher than the internet," said shop co-owner Steve Thompson.

If the 75 percent tax is approved, Thompson said he'd be forced to shut down.

"There's no way we have margins to compete with 70 percent," he said. "I'm certain we would be shutting our business down."

The proposed tax is a long way from becoming law. The plan must now go before the House of Representatives. If the House approves it, it still needs the Ok from the Senate and Governor Jay Inslee.