USA: Ohio's Tobacco Tax Management Bill Clears Legislative Hurdles

HB 513, a recently passed bill, offers a glimmer of hope for vape sellers. Termed as a "tax deduction for cigarette wholesalers when retailers fail to pay," this legislation might be a rare instance where vapers find themselves somewhat content with the law.

A SUMMARY OF THE BILL:
Primarily focusing on tax matters and addressing outstanding debts from uncollected tobacco taxes, HB 513 particularly tackles the tax regime surrounding e-liquids in Ohio. With a relatively high tax rate of 10 cents (ZAR 1.88) per milliliter of juice, the accumulating tax burden incentivizes seeking alternatives to comply with tax obligations. However, confusion arises regarding the party responsible for remitting these substantial taxes, especially during wholesale transactions to retailers.

While the bill largely addresses tax handling, it's not the tax aspect that raises concerns among vapers. Rather, it's a component of HB 513 that Ohio Capital Journal describes as "A late amendment tacked on prohibitions for local tobacco regulations." The pertinent segments of the bill are outlined as follows:

"No political subdivision may enact, adopt, renew, maintain, enforce, or continue in existence any charter provision, ordinance, resolution, rule, or other measure that conflicts with or preempts any policy of the state regarding the regulation of tobacco products or alternative nicotine products."

WHAT COMES NEXT?
Dubbed a preemption bill, HB 513 effectively prevents regulations that exceed state tobacco laws from taking precedence. Presently, two major cities are poised to clash with this bill due to their existing laws. As HB 513 supersedes local ordinances with state regulations, it nullifies bans previously enacted by certain cities.

Columbus, for instance, had implemented a prohibition on all flavored tobacco products, a measure stricter than the FDA's permitted products. Scheduled to commence in January 2024, Columbus's ban may now be rendered ineffective following the passage of HB 513. Similarly, Toledo's ban on flavored cartridges faces conflict with HB 513.

While the law's enactment and its practical implications may differ, the passage of HB 513 signifies a comparatively positive development in legislation concerning vapers, marking a departure from the norm.

References:

What will DeWine sign? Lawmakers passed more than 30 bills on last day of session • Ohio Capital Journal