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On Wednesday, the Alabama House Ways and Means General Fund Committee passed HB529, introduced by state Rep. David Faulkner, R-District 46, which looks to levy an additional tax on the sale of “consumable vapor products” in the state.
Under Alabama law, a consumable vapor product includes “any nicotine liquid solution or other material containing nicotine that is depleted when used as a vapor product.” The proposed tax would apply to the retail sale of such products at a rate of 10 cents per milliliter of consumable vapor product, with consumers paying the cost of the tax in addition to the existing Alabama sales tax. Any local taxes which may already be applied to vape products would be repealed and replaced under the bill’s provisions.
The legislation outlines that 50 percent of the funds collected by the tax would go to the State General Fund, 25 percent would be distributed to the state’s counties by population, and the remaining 25 percent would be distributed to Alabama’s municipalities by population. Rep. Faulkner also explained that “at least 32 states” already have similar taxes on vape products in place.
Retailers would also be responsible for making monthly returns to the Alabama Department of Revenue under the bill, with violations resulting in prosecution by the Attorney General and the seller being barred from conducting further business. Untaxed vape products could also be confiscated and disposed by the Alabama Alcoholic Beverage Control Board or any other law enforcement official according to the legislation.
Additionally, HB529 would require retailers to apply for a $150 permit to sell consumable vapor products. Faulkner explained that the penalties for failing to acquire such a permit mirror those for a non-registered tobacco seller who fails to attain a proper license.
The revenue collected from the permit fee would be used by the ABC Board for the purposes of enforcing the bill’s provisions and to target the sale of illegal vape products in the state.
“The reason for this bill, for me, is to get enforcement, to get a handle on this, to protect our youth,” Faulkner said. “Illegal consumer vape products… are rampant in Alabama. It’s estimated that 80 to 85 percent of the vape products sold in stores are illegal, meaning they’re not on the registry. Right now there is no money or mechanism for enforcement. This bill will give the Alabama ABC Board the authority to create a new license fee to have enforcement out in the field.”
After receiving a friendly amendment to clarify language and ensure compliance with federal law, the bill quickly passed the committee with multiple members expressing their approval of its provisions. HB529 will now move to be considered by the House floor.
