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Vape shops see partial win in tobacco tax court case

It was back in 2016 when Joshua Sanders, owner of East Coast Vapor in Swatara Township, says the Department of Revenue told him he had to pay a 40 percent tax on all of his store’s inventory.

“For someone to come into our store and tell us, ‘Hey we’re going to pretty much shut you down because we’re taxing you so much money,’ I thought that was unfair,” said Sanders.

The measure was enacted by the legislature as a part of the state’s budget, and included inventory purchased before the tax was imposed.

“We're talking hundreds of thousands of dollars,” said Sanders.

He says that would have put him out of business.

According to the Tobacco Products Tax Act, also known as TPTA, an electronic cigarette is defined as an electronic oral device, such as one composed of a heating element and battery or electronic circuit, which provides a vapor of nicotine.

Sanders says only five percent of his store’s inventory meets this definition, and that’s when he filed a suit with the Commonwealth Court.

“We weren’t trying to make up words in the law. We just read the black and white letters and went by what it said and that’s what we thought we should pay the tax on,” said Sanders.

And finally, after more than a year of waiting, the courts agreed.

The 40 percent tax will now only be imposed on e-cigarette starter kits, not the accessories and vaping juice, and Sanders says he considers that a win.

Some people we spoke with, though, say they don’t agree.

“I mean, it;s still a form of smoking,” said one Harrisburg resident.

“Why should people that are smoking a pack of cigarettes and somebody smoking something else not pay the tax?” said another.

“Why shouldn’t they be taxed the same s regular cigarettes if people are using them to go and get nicotine?” said a third.

But Sanders says it’s for those same health concerns that he thinks e-cigarettes should not be taxed.

“When we started back in 2011, we gave my mom an electronic cigarette. She smoked three packs a day. She quit. So if she can do it, anyone can,” said Sanders.

There is no word at this time whether the Department of Revenue will refund the businesses that did pay the tax.

It is also worth noting, the tax did force several other vape shops to close their doors.