Vaping Tax Revenues in the United States

    Vaping pens and materials are taxed in the United States. When you’re talking about vaping devices, there’s a standard sales tax that applies to retail products. Nicotine content in vape juice is a primary focus for excise taxes.

    The increase in state revenue can be seen as a positive. However, there is balance between the attractiveness of tobacco products and the safety of vaping. In comparison to smoking, nicotine-free vape juice is not a tobacco product. On the other hand, vape pens are versatile devices with a lot of choice and variety.

    Is Vaping Taxed Like Tobacco?

    Legislation on vaping in Kentucky shows what a reasonable tax strategy can look like. In order to reduce accessibility and attractiveness to a younger demographic, they create a tobacco tax law. It’s a levy on vaping products, including vape juice that contains nicotine.

    The market for vape pens and refillables is projected to increase. Specifically, people who are smokers are a prime candidate for a vaping solution, with a much more likely increase in demand. It’s a similar response to taxing tobacco, especially since this variety of vape juice is also a tobacco product.

    In the same sense, it’s only one aspect of vaping. The influence of nicotine-free vape juice is associated with the tobacco industry. However, the differences between the variety of cigarettes and vape juice can vary drastically. This is also true when comparing high concentrations of nicotine to flavored vape juice with none.

    How Vaping is Taxed in America

    There is a major difference in legislation on vaping in each state. Some states, including Colorado, Michigan and San Francisco have moved on banning flavored vapes. There’s a lot of funding and political movement in responding to the imbalance in vaping demographics.

    Looking at the e-cigarette tax by state, we see municipal and statewide vaper excise taxes. Some states levy $0.05-$0.20 or more per milliliter of vape juice, while others charge 30-96% of wholesale transactions. In Illinois, there’s a $1.50 per-unit levy.

    Generally, states are able to respond to vaping trends in their area. There is a big response to the overuse of vape pens and their exposure to grade-school students. Thinking rationally, the adult audience and market for vaping is still significant, and makes up the majority of the total vape market. However, these rates may vary by state, and are being responded to.

    Is Vaping Legal?

    As mentioned previously, some states have acted on banning vaping. However, with the overall market for vaping projected to steadily increase, it shouldn’t hurt its popularity in the United States and abroad.

    In some cases, it’s handled similarly to tobacco products. More and more people are switching to a vape pen and buying different flavors of vape juice with varying levels of potency. At the same time, the THC market will account for some of the demand.

    There’s also the aspect of vaping equipment. This includes complete kits and devices with all-in-one convenience for vaping flavored juice. At the other end of the spectrum, enthusiasts are using custom vape parts, including atomizers, batteries, cartridges and devices. These are each considered differently, with some United States companies even specializing in vaping technology.


    The vaping industry is versatile, with many different demographics. While taking responsibility for youth exposure is important, the overall market is projected to grow. It’s made up a large part of the revenues of many states. This includes those with specific excise taxes per millimeter of vape juice, as well as those with a wholesale levy on vaping devices and materials.