Tax Amendment Scores Big Win For New Jersey Small Businesses and Consumers

(Trenton, NJ) Yesterday, Governor Murphy signed A5385/S3877 into law, marking a tremendous win for the small business retailers who sell vaping liquids and their customers. The legislation amended the approach to taxation that was enacted last July, which inadvertently created devastating results by imposing a $0.10 per milliliter wholesale tax on the sale of bottles of liquid and pods used in vaping.

The undue burden of this tax on vapor retailers caused the closure of at least 10% of the vape shops in New Jersey, the exodus of several large distributors out of the state, and the loss of hundreds of jobs. Since the bill passed last June, the New Jersey Vapor RIghts Coalition (NJVRC), under the leadership of President, Danish Iqbal, of Medusa Distribution, worked with Legislative leaders to craft A5385 and pushed it through to its passage.The key component of the bill is it changes the tax to a 10% point of sale tax on e-liquids, which is far less burdensome to vapers across the state.

This New Jersey legislation is the only one of its kind. In conjunction with other state partners and with the support and guidance of the Vapor Technology Association (VTA), the NJVRC was able to reform a standing law within one year. Assemblyman John Burzichelli was instrumental in crafting and passing this bill and has been a champion for these small business owners. The lead sponsor in Senate was Senator Paul Sarlo; and other prime sponsors included Senator Troy Singleton, and Assemblywomen Eliana Pintor-Marin and Verlina Reynolds-Jackson. These legislators were able to balance the revenue needs of the state with the concerns of industry participants.

“Over the past year, the NJVRC has worked with legislators to craft a smart, effective tax policy that will not only help the state address revenue concerns, but also ensure that the vape industry which is made up of small business owners, can continue to thrive,” said NJVRC President Danish Iqbal. “We are extremely pleased with the level of engagement from legislators across the state who listened to our concerns and suggestions. The NJVRC will continue to engage with legislators to make New Jersey a shining example of the vaping industry working with the government to address concerns about this new industry.”