So, there were problems getting the money for a new budget that was remotely possible. Republicans and Democrats (primarily between House Republicans and the Governor) eventually did unite and compromise. The compromise was throwing nicotine users of all varieties, except cigars, under the bus. Staffers generally directly admitted that cigar industry, wholesalers and lobbyists bribed enough politicians to squeak by.
Vaping folks got nailed the hardest. 40% across the board tax on everything. Including a 40% 'floor inventory' tax that will shutter the majority of vaping related shops on October 1. If your business has any vaping related products, you must pay an alleged one-time tax on all your inventory in stock within 90 days. Manufacturers, distributors, and retailers must obtain licenses from the state in order to sell products in Pennsylvania. Retailers can only purchase products from PA licensed distributors or wholesalers. Which will drive up prices dramatically. Hilariously, because it's extra Kafkaesque, nicotine free vaping liquids are also taxed at 40%.
You might say, well, people aren't stupid. Sure virtually all of the local businesses will close, but people will go online. Online orders for anything vaping related must pay 40% tax. If you try to blackmarket your supplies by not paying said 40% tax, penalties for evading the tax include up to a $5,000 fine, or prison time not to exceed five years. Consumers are “unclassified importers" in the new tax law. So, let's say you're smart and want to stockpile a horde of supplies. They thought of that too. Section 1207-A(a) will criminalize the ownership of any vape device or e-liquid that wasn’t bought from a licensed Pennsylvania seller, if purchased after Oct 1. So, potentially folks could do prison time if they don't save their receipt. Yay, prison time for folks trying to quit smoking.
Rep. Russ Diamond, R-Lebanon County put it best: "This is simply the tyranny of the majority. For legislators, it's an easy vote. It's a cheap shot at a political constituency that simply doesn't have the numbers to go to the ballot box."
Also included are taxes for Netflix, Amazon Prime, etc. Redbox will be a lot more economic after this tax passes. All digital items and services are now subject to a 6% tax.
Cigar tax status:
http://www.philly.com/philly/news/politics/20160719_In_Pa___cigars_evade_tobacco_tax.htmlhttp://thetimes-tribune.com/news/business/vape-shops-tobacco-users-downloaders-hit-with-taxes-1.2067177Great headline, "'Sorry about the death': Should Pa. balance its budget off smokers trying to quit?"
http://www.pennlive.com/politics/index.ssf/2016/07/up_in_smoke_budget_cigarette_t.htmlMore information:
http://thetimes-tribune.com/news/business/vape-shops-tobacco-users-downloaders-hit-with-taxes-1.2067177