E-cigarette tax increases cigarette sales, data suggests

When these e-cigarette taxes start, cigarette sales increase significantly," said Chad Cotti, a professor of economics at the University of Wisconsin-Oshkosh.



Cotti is one of the researchers studying e-cigarette taxes and trends in relation to tobacco control policy from 2013-2019. "When taxes are imposed on e-cigarettes and then the price of e-cigarettes is raised, you'll notice a significant drop in e-cigarette sales -- a huge drop in e-cigarette sales," he said. "E-cigarette users are very price sensitive - much more than you see in traditional cigarette taxes."



The reason for the price sensitivity is the smaller age range of buyers, Cotti said, though he said that, on average, a pack of cigarettes costs $6.71, while e-liquids cost $4.82 per milliliter.



The state collected about $1.5 million in taxes on vaping products in 2021, according to the Wisconsin Department of Revenue. Those products are taxed at 5 cents per milliliter, tied with the lowest rates of all states, according to taxfoundation.org.



"While e-cigarettes aren't good for you, there's a lot of research showing they're less harmful to you than conventional cigarettes, so we don't want to bring people to conventional cigarettes," Cotti said.



From a policy standpoint, lawmakers are better off considering a new approach, Cotti said. "If we look at them as a more comprehensive tax policy, you might get better results because you're not going to push people back and forth between different products," he said. "These taxes should be considered more comprehensively."