In 2015 the State of Louisiana faced a major budget shortfall. In response to that many fees/taxes were raised to increase revenue into the State coffers.One such measure was the implementation of a tax on Vapor products according to the % of nicotine. We (Gulf South Strategies LLC) were engaged after the filing of the vaping tax. Originally, the tax to be implemented on vaping products was to include all vaping liquids. We were able to have that provision removed. In the conference committee process (final committee negotiation to reconcile differences between the House and Senate) allies of the tobacco and convenience stores essentially, "stacked the deck" and voted in the increase on vaping (nicotine content based) products. We were successful in limiting taxation only to products containing nicotine.
We sought relief and interpretation of the enacted law (increasing taxes on the Vaping industry) from both the Louisiana Department of Revenue (LDR) and the Louisiana Alcohol, Tobacco, Commission. The goal was to have the ambiguity in the law resolved to read the portion of taxation on vaping liquids be based solely on the minute percentage of nicotine within a given vaping liquid solution. LDR did not interpret this as we desired and we are left with the current law as enacted in the Regular Session of 2015.
2015 At the Vaping convention held in New Orleans, agents of both LDR and the LATC descended upon convention attendees in a rather belligerent manner, to outline tax collection. We (GSS) contacted numerous legislative allies to resolve the situation. In kind the Louisiana Department of Revenue received rapid communication to report on their actions.
INTERIM ACTION: Our goal (GSS) has been to inform our legislative allies about the Vaping industry as a rising small business sector in Louisiana and the importance of supporting this young and growing industry. Along with members of LAECR/Vaping industry shop owners met with many members of the legislature.
2016 Special Session: Louisiana faces an historic and deep budget shortfall, approximately 1B USD. Our goal, given the major budget shortfall, was to keep any further taxation being placed on the Vaping Industry. We (GSS) were successful in that goal during the 2015 Special Session. This session saw major increases on tobacco and alcohol taxes.
2016 Regular Session: This Session is prepared to face an even greater budget shortfall for the coming fiscal year (FY16-17) estimated 2B USD. Our goal in this session, again, is to keep any taxation of the vaping industry from being enacted. We monitor all bills filed and daily action within legislative committees and chamber floor activity to ensure our goal of no vaping taxation is achieved. The 2016 Regular Session ends in early June. Note, taxation can be added at any stage of the legislative process, up until the final day of the session.
FUTURE ACTIVITY: We anticipate another 2016 Special Session immediately following the current 2016 Regular session. The goal in that session will be the same goal, no mention or proposed taxation on the Louisiana vaping industry.
RECOMMENDATIONS: We advise the Vaping industry to increase advocacy within the industry in Louisiana. Further, starting a separate, "consumer" advocacy group would be advisable. Raising money for ongoing and future advocacy is imperative. (This means ALL retail and wholesale outlets within the Vaping industry in Louisiana NEED to be actively and financially involved in bolstering support for this industry.)
Gulf South Strategies LLC will continue to work with LAVA to support and defend the rights and business operations of the Vaping Industry in Louisiana.