Vaping would cost a little more in Omaha than surrounding communities if the City Council expands the city’s tobacco tax this month.
Council President Chris Jerram has proposed erasing the existing city ordinance’s exemption for nicotine delivery devices.
Mayor Jean Stothert told The World-Herald last week that she supports extending the tax to vaping for public health and tax fairness reasons.
The proposed change would add the city’s 3% occupation tax on tobacco products to e-cigarettes and other vaping products.
City finance officials estimate that expanding the tobacco tax to vaping would raise about $1 million more than the $3.5 million to $3.7 million a year it raises now.
Vaping retailers said they plan to fight the tax. The public hearing on the issue is Oct. 22.
Jerram said his goal is to prevent a new generation of young people from vaping and getting addicted to nicotine.
Public health experts at the Mayo Clinic and John’s Hopkins University have said that young people first exposed to nicotine by vaping are more likely than their unexposed peers to use tobacco products.
Jerram also said he wants to apply the tobacco tax fairly. The city’s tax law shouldn’t treat people who vape nicotine any differently from the people who smoke it, he said. Local smokers pay the tax.
“It’s the kids that have really driven me on this,” he said. “And equity.”
But people who sell and use vaping products say the city is targeting them unfairly. E-cigarette retailers say they don’t like to see their product treated like smoking because it’s less harmful. They market to smokers trying to quit.
Nebraska recorded its first vaping-related death in May, state health officials said. At least a dozen others have been reported nationally.
Many who died had vaporized cartridges of liquid that contained THC, the active ingredient in marijuana, not nicotine, federal health officials say.
Local retailers, who defend the safety of vaping nicotine, say they do not buy Omaha’s public health argument. They say the tax won’t deter young people.
“I think the city needs money,” said Sarah Linden, who owns Generation V, a chain of vaping stores with outlets in Omaha and Lincoln.
Jerram said he had not yet earmarked any purpose for the additional revenue.
Jerram said he hopes to persuade Stothert and his council colleagues to aim some of the funds toward local research on the effects of vaping.
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Research on the public health effects of vaping is in its infancy. Much of what’s available has been funded by private companies with interest in the results.
The national push to restrict access to e-cigarettes and vaping is often tied to previous research on the effectiveness of tobacco taxes.
Academics who study those taxes found that increasing the price of an addictive product can shrink the pool of young people who try it out.
The University of Nebraska Medical Center has cited research showing that a 10% increase in cigarette prices reduced youth smoking by 6.5%.
But there is a reality about taxing vaping that cigarettes don’t face, Linden said. People can legally buy vaping products online, she said, and they will.
Or they’ll drive across city and state lines to save money, as they do for cigarettes, she said.
Eric Johnson, who owns local shop Caterpillar Vapes, said a 3% tax might not be what drives people away from Omaha businesses.
“The bigger issue is once you get a city tax, you get into a state tax, then you can reach a critical juncture,” he said.
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