| RALEIGH, N.C.
RALEIGH, N.C. May 29 North Carolina, the top
U.S. tobacco-producing state, will levy a modest tax on
increasingly popular electronic cigarettes as part of
legislation adopted by state lawmakers and signed by the
governor on Thursday.
Republican Governor Pat McCrory signed a measure that adds a
tax of 5 cents to each milliliter of the nicotine liquid that
e-cigarettes use. Smokers inhale through a battery-powered metal
tube, turning the liquid to vapor.
The tax was cleared by the state Senate and House in
bipartisan votes earlier on Thursday.
Sales of e-cigarettes have grown dramatically and are
expected to surpass traditional cigarette sales within a decade,
yet they remain largely unregulated. Several states have
considered taxing them at a rate much higher than 5 cents, on a
level that is similar to traditional cigarettes. So far, only
Minnesota has adopted such a tax.
North Carolina taxes traditional cigarettes at 45 cents per
Large tobacco companies including Reynolds American Inc
, which is based in Winston-Salem, North Carolina,
supported the 5-cent tax as they seek to replace the declining
market for traditional cigarettes.
The measure's supporters highlighted what they claimed are
the health benefits of e-cigarettes.
"Tobacco and vapor products have vastly differing health
impacts, manufacturing processes and business models,"
Representative Ruth Samuelson, a sponsor of the bill, said in an
email on Thursday. "In light of this, we must ... draw a clear
distinction between how North Carolina treats tobacco products
and vapor products."
Opposition to the tax has come from both Democrats and
Some Democrats argued that e-cigarettes should be taxed at a
higher rate, or that the state should wait to decide how to tax
them until the U.S. Food and Drug Administration unveils
regulations on e-cigarettes that are expected this summer.
Others said there should be no tax at all on a product that
has been touted as a less harmful alternative to regular
"It makes little sense in this fragile economy to impose
higher taxes on a product that provides consumers a viable and
harmless alternative to traditional tobacco products," Grover
Norquist, president of Americans for Tax Reform, wrote in a
letter to state legislators.
(Editing by Colleen Jenkins and Matthew Lewis)