by Sarah Curry, Roy Cordato
John Locke Foundation
July 10, 2014
The North Carolina General Assembly should make history and become the first state in the country to repeal an electronic cigarette (“e-cigarette”) tax. North Carolina passed a law during the 2014 legislative session taxing the liquid used in e-cigarettes at an additional 5 cents per milliliter. The e-cigarette market in North Carolina is dominated by small businesses. This tax will hurt them because it will require a tobacco license to sell, distribute, or import e-cigarette products and force them to expend huge sums for lawyers and accountants. This tax violates the most important principle of good tax policy: neutrality. It is bad economics for the government to tax some goods and services more heavily than others. This new tax distorts economic and personal decisions by penalizing some consumer choices relative to others.

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