Connecticut Gov. Malloy Wants 75 Percent Wholesale Tax on E-Cigarettes, Vaping Fluid

Amid a bevy of proposed tax increases, Connecticut Gov. Dannel Malloy has called for a new 75 percent wholesale tax on electronic cigarettes and other vaping products—part of an effort to close a $3.5 billion deficit.

As you might expect, vape shop owners are not happy with the idea.

"Just do the math," Christine Mazzotta, who owns three vape shops in Connecticut, told the Hardford Courant. "A tax that high is simply going to push business out of Connecticut. It's going to close stores."

That's not just speculation. Pennsylvania passed a 40 percent vaping tax last year, and the law has decimated the state's vape shops—just as some of those same businesses predicted it would. Ten months after the tax was approved, more than 150 vape shops have closed across the Keystone State.

Now Connecticut's tax "threatens to close approximately 80 small businesses," Gregory Conley, president of the American Vaping Association, told The Daily Vaper, an online trade publication for the vaping industry. Those businesses aren't responsible for running up a $3 billion deficit, but they will pay the price for Connecticut's fiscal profligacy. Retailers worry that the tax will compel customers to purchase their vaping equipment online, shutting down as much as 90 percent of the state's nascent vaping retail industry.

Under Malloy's budget plan, released this week, the tax is expected to generate $4.3 million during the current fiscal year and an estimated $8 million in following years. Needless to say, those projections don't consider the possibilily that Connecticut vapers will simply stop going to vape shops and instead take their business online.

So the state will end with less tax revenue than anticipated, but at least it will also have driven a bunch of entrepreneurs out of business.