MuskogeePhoenix.com, Muskogee, OK

Oklahoma News

April 21, 2013

Battle over e-cigarettes fought in Capitol

— OKLAHOMA CITY (AP) — As more people turn to smoke-free, electronic cigarettes to help them quit smoking, a new industry is blossoming across Oklahoma: mom-and-pop stores that sell “vapor” products that use a heating element to convert nicotine into an inhalable water vapor.

But many of these small businesses fear that big tobacco companies are trying to cut them out of this growing market and have found themselves engaged in a political fight at the state Capitol.

“I was a mechanic for 15 years and then I got into this business,” said John Durst, who has opened two stores in the last year — OKC Vapes and Norman Vapes — with his wife. “Now I feel like a politician. I’ve learned more about the political system in the last six weeks than I knew all of my life.”

State Sen. Rob Johnson introduced a bill this session, supported by two of the country’s largest tobacco companies, that would limit access to e-cigarettes and other vapor products to those older than 18 and would limit taxes on those products to 5 cents per unit. Taxes would be capped at one-tenth of the state tax on a pack of cigarettes.

The bill drew dozens of members of the self-described “vapor community” to the Capitol to oppose the measure, many of whom had vapor product inhalers dangling from their necks and T-shirts bearing the names of their shops. The turnout helped lead to the bill being killed in a House committee April 9.

But the bill has been resurrected by Johnson, R-Edmond. The latest version, which was adopted last week as an amendment in the Senate on a 23-22 vote, would define vapor products as “tobacco products” under state law, a move fiercely opposed by the vapor industry.

“We want to be the furthest thing away from being a tobacco product. Just because we’re a nicotine-derived product doesn’t mean we’re a tobacco product,” Durst said. “If I’m defined as a tobacco product, then now I have to go and buy a tobacco retail license, a tobacco wholesale license and a manufacturer’s license, because we manufacture our own liquid.”

Defining e-cigarettes as tobacco products also would shift how they are taxed — from a sales tax to an excise tax.

The final version of the bill is expected to be hammered out in a conference committee, and Durst and other members of the Oklahoma Vapors Advocacy League, or OVAL, have retained their own lobbyist . The vapor industry doesn’t oppose the youth-access language, but is mostly concerned by the attempt to define the products and change how they’re taxed.

But Johnson, who is the top recipient of tobacco-lobbyist money in Oklahoma, according to tobaccomoney.com, said the classification of vapor products as tobacco products is expected by the U.S. Food and Drug Administration and that he’s trying to get a favorable tax structure put in place before that happens.

“The federal government is going to call these tobacco products. I’m not real good on waiting to see what the federal government is going to do and dictating to our state what we have to do,” he said. “What I don’t want is for them to rule these as tobacco products, and then the Tax Commission has the ability to unilaterally tax them at a higher rate. I think we should be proactive and define what they should be taxed at, and then tax them lower, because they aren’t as harmful as other tobacco products.”

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