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Excise on Vapor Products and E-cigarettes 10

SECTION 40.   The General Laws are hereby amended by inserting after chapter 64N the following chapter:-

Chapter 64O.

Section 1. As used in this chapter the following words shall have the following meanings:-

The words "engaged in business in the commonwealth", "person", "retail sale", "retailer", "sale", and "sales price", shall have the same meaning as in section 1 of chapter 64H.

"Commissioner'', the commissioner of revenue.

"Electronic cigarette", any electronic device, whether for one-time use or reusable, that can be used to deliver nicotine or other substances to the person inhaling from the device, including electronic cigars, electronic cigarillos, electronic pipes, electronic nicotine delivery vaping pens, hookah pens or other similar devices that rely on vaporization or aerosolization; provided, however, that "electronic cigarette" includes any component, part or accessory of a device that is used during the operation of the device, even if sold separately; provided further, however, that "electronic cigarette" shall not include a product that has been approved by the United States Food and Drug Administration for the sale of or use as a tobacco cessation product and is marketed and sold exclusively for the approved purpose.

''Electronic cigarette retailer'', any person who sells or furnishes electronic cigarettes at retail to consumers.

Section 2. An excise tax is hereby imposed upon the retail sale of electronic cigarettes by an electronic cigarette retailer at a rate of 13.75 per cent of the total sales price received by the electronic cigarette retailer as a consideration for the sale. The excise under this chapter shall be levied in addition to state tax imposed upon the sale of property or services as provided in section 2 of chapter 64H.

Section 3.

(a)          Any electronic cigarette retailer engaged in business in the commonwealth shall register with the commissioner and shall file returns and pay the excise under section 2 to the commissioner at the time provided for filing a return required by section 16 of chapter 62C.
(b)          The excise in section 2 shall be collected by the electronic cigarette retailer from the purchaser at the time of the sale, in a manner similar to the tax imposed under section 2 of chapter 64H.
(c)          In the event that an electronic cigarette retailer fails to collect the tax from the retail purchaser, the purchaser of any electronic cigarette shall be jointly liable with the electronic cigarette retailer for the excise imposed under section 2, determined with respect to the sales price of electronic cigarettes purchased by such consumer from such retailer, provided that the purchaser receives the electronic cigarettes in the commonwealth or purchases the electronic cigarettes for use in the commonwealth. The purchaser shall pay such tax due to the commissioner in the manner of the tax imposed under section 2 of chapter 64I.

Section 4.

(a)          The excise imposed under this chapter shall not apply to sales made solely for resale, provided that the transaction qualifies as a sale for resale under section 8 of chapter 64H, and provided further that the purchaser provides the electronic cigarette retailer with a resale certificate as described in said section 8 of chapter 64H.
(b)          The excise imposed under this chapter shall not apply to sales made under the prescription of a physician.

Section 5. The commissioner may promulgate regulations or issue other guidance for the implementation of this chapter.

This section imposes a 13.75% retail tax on electronic cigarettes.