CALIFORNIA’S PROPOSITION 56 TO IMPOSE HUGE TAX ON VAPOR PRODUCTS THAT WILL HURT SMALL BUSINESS AND KILL JOBS

November 8 Ballot Measure Lines the Pockets of Special Interest Groups,

Does Little to Help People Stop Smoking     

 

SACRAMENTO, Calif., September 13, 2016 – Proposition 56 is flawed, imposing a heavy tax on California’s small businesses and will kill tens of thousands of local jobs, according to Protect Small Business and Smoke-Free Alternatives, No on 56, a recently formed ballot committee sponsored by the Smoke-Free Alternatives Trade Association (SFATA) to oppose the November 8, 2016 state-wide measure.

“At a time when California’s smoking rate has dropped to the second lowest of any state, special interests groups are seeking yet again to line their pockets through a regressive sin tax, extending a disproportionate astronomical tax to vapor products that only makes it harder for smokers to consider these devices as alternatives to combustible cigarettes,” said Kari Hess, small business owner and co-president of the Northern California chapter of the Smoke-Free Alternatives Trade Association.

Under the proposed measure, vapor products will be subjected to a whopping $10 tax,* while the tax on a pack of combustible cigarettes may increase to $2.87. Californians should vote “NO” on Prop. 56 because:

  • 56 Will Hurt Small Business and Kill Jobs, making vapor products so expensive that California’s 3.8 million smokers will be less likely to consider them as alternatives to combustible cigarettes – forcing the many small businesses that comprise the vapor industry with the tens of thousands of people they employ – to fire staff, relocate or even close down.
  • 56 is Bad for Public Health, implying that the harmful health effects of tobacco are similar to those of vapor products and will only push people back to smoking cigarettes. Millions of former smokers in California and around the world already have switched to vaping, which science says is more than 95 percent less harmful than combustible tobacco.
  • 56 Lines the Pockets of Special Interest Groups, protecting inefficient programs that are losing money from declining tobacco tax revenues as smoking consumption rates continue to fall – including paying health insurance companies up to $1 billon for treating the very same patients they already treat today.
  • P 56 Will Cheat Schools Out of at Least $600 Million, amending the state constitution to divert education funding while not one penny of the new tax money will go to improve K-14 public schools.
  • 56 is a Regressive “Sin Tax” That Doesn’t Work, setting a disastrous precedent for more industry-specific taxes, also creating a funding shortfall for Medi-Cal that millions of needy Californians rely upon.
  • 56 Does Little to Help Stop Smoking, with only 11 percent of new tax money going toward programs to treat smokers or stop kids from starting.

“Prop. 56 is misleading to voters by falsely implying that the harmful health effects of tobacco are similar to vapor products,” continued Hess. “It is imperative that California voters understand the stark differences between vapor products and combustible cigarettes and vote NO on November 8.”

Editor’s note: More information on Protect Small Business and Smoke-Free Alternatives, No on 56, can be found by visiting: http://sfata.org/resources/flyers-and-graphics/.

*Based on an average wholesale cost of a 30 mL bottle of e-liquid.

About Protect Small Business and Smoke-Free Alternatives, No on 56

Protect Small Business and Smoke-Free Alternatives, No on 56, is sponsored by the Smoke-Free Alternatives Trade Association (SFATA), with funding by local California businesses, individual taxpayers and concerned citizens. Founded in 2012, the Smoke-Free Alternatives Trade Association (SFATA) is the largest trade association in the vapor products industry with more than 1,400 members and 28 chapters located across the country, representing online retailers, brick and mortar vendors, distributors, manufacturers, professional service providers, importers and wholesalers.

SFATA-CALIFORNIA DENOUNCES SIGNING OF BILL REDEFINING VAPOR PRODUCTS AS TOBACCO

Says Legislation is Counterproductive to Public Health and Creates

 A Host of Negative Consequences for California Small Businesses

 

 Sacramento, May 4, 2016 — The California chapters of the Smoke-Free Alternatives Trade Association (SFATA), the largest trade group representing the vapor industry, today issued the following statement on Governor Brown’s signature of SBX2-5, a measure that defines vapor products as “tobacco” and make related changes to existing law:

“California took a step backwards today by reclassifying vapor products as tobacco. Stigmatizing vapor products, which contain no tobacco and treating them the same as combustible tobacco while actively seeking to economically penalize smokers attempting to switch is counterproductive to public health. We remain strongly opposed to SBX2-5 and will continue to work with the legislature, and voters, to educate them on what science says should be embraced as a far less harmful alternative to combustible cigarettes.

“Our industry, which was built by former smokers that morphed into small- and mid-sized businesses, has always supported sensible legislation, such as prohibitions on selling to minors, reasonable licensing requirements and child-resistant packaging.  However, this legislation will negatively impact California small business, of which there are approximately 1,400 vaping retail locations, plus hundreds of manufacturers, distributors and related businesses that contribute to the state’s economy, generating taxes and thousands of jobs.”

About SFATA

Founded in 2012, the Smoke-Free Alternatives Trade Association (SFATA) is the largest trade association in the vapor products industry with more than 800 members and 19 chapters located across the country, representing online retailers, brick and mortar vendors, distributors, manufacturers, importers and wholesalers. For more information, visit SFATA.org or join the conversation on Facebook and Twitter @SFATA. Download a copy of SFATA’s “Top 10 Vapor Facts: Demystifying Misconceptions about the Vapor Industry” by visiting http://bit.ly/toptenvaporfacts

 

Media Contacts:

George Medici | Matt Sheldon

PondelWilkinson

gmedici@pondel.com|msheldon@pondel.com

310.279.5980

SFATA to Hold Press Conference to Urge California Governor to Veto SBX2-5 and Oppose Pending State Referendum to Tax Vapor Products

— SFATA Members to Meet with Legislators to Discuss Sensible Regulations —

Sacramento, March 24, 2016 — The California chapters of the Smoke-Free Alternatives Trade Association (SFATA) will be joined by the Consumer Advocates for Smoke-Free Alternatives Association (CASAA) to call on the Honorable Edmund G. Brown Jr. to veto SBX2-5, a measure the seeks to define vapor products as “tobacco” and make related changes to existing law. SFATA also will announce its opposition to the “California Healthcare, Research and Prevention Tobacco Tax Act of 2016,” a proposed ballot initiative that attempts to classify vapor products as tobacco products, while extending new cigarette “sin” taxes to this growing category.

WHO: The Northern California, Southern California and High Desert chapters of SFATA; CASAA.

WHAT: Press conference to announce opposition to SBX2-5 and urge Governor Brown to veto the measure; oppose pending ballot initiative to equate/tax vapor products like tobacco; introduce options for sensible regulations on vapor products.

WHEN: Tuesday, March 29, 2016

WHERE: 11:30 a.m. PST
South Steps
California State Capital
Sacramento, California

WHY: Vapor products are not tobacco products because they do not contain tobacco. Attempting to classify vapor products as “tobacco” has unintended consequences, which will hurt California businesses, as well lead to unfair and unwarranted tobacco tax-related implications that will discourage smokers from switching to what science says is an effective and significant alternative to combustible tobacco.

Click here to download a letter to Governor Brown outlining the unintended consequences of SBX2-5 and the rationale for a veto. Click here to download a letter to California’s Attorney General Kamala D. Harris on SFATA’s opposition to the pending statewide referendum to classify vapor products as tobacco.

Editor’s Note: SFATA members will be meeting with California legislators on March 29 to discuss the impact of taxes on vapor products, as well as sensible regulations for the vapor industry.

About SFATA

Founded in 2012, the Smoke-Free Alternatives Trade Association (SFATA) is the largest trade association in the vapor products industry with more than 800 members and 19 chapters located across the country, representing online retailers, brick and mortar vendors, distributors, manufacturers, importers and wholesalers. For more information, visit SFATA.org or join the conversation on Facebook and Twitter @SFATA. Download a copy of SFATA’s “Top 10 Vapor Facts: Demystifying Misconceptions about the Vapor Industry” by visiting http://bit.ly/toptenvaporfacts.

SFATA-California to Meet with Governor Brown’s Office to Urge Veto of SBX2-5

Largest Vapor Trade Association Outlines Rationale in Letter to

The Honorable Edmund G. Brown Jr.  

Sacramento, March 9, 2016 — The California chapters of the Smoke-Free Alternatives Trade Association (SFATA), the largest trade group representing the vapor industry, today are meeting with Governor Brown’s office urging his veto of SBX2-5, a measure the seeks to define vapor products as “tobacco” and make related changes to existing law.

The bill, which passed last week during the second special session of the California Assembly, is now headed to the State Senate where a “yes” vote is inevitable.

“While we are hopeful this measure will not pass in the California Senate, and are outreaching to these legislators announcing our opposition, we are calling on Governor Brown for a veto nevertheless,” said Cynthia Cabrera, president of SFATA.

“Treating vapor products like tobacco opens the door to unfair and unwarranted tobacco tax-related implications that will discourage smokers from switching to what science says is an effective and significant alternative to combustible tobacco,” she wrote in a hand-delivered letter to Governor Brown.

Below is a copy of the full letter to Governor Brown that was delivered on March 9, 2016:

March 9, 2016
The Honorable Edmund G. Brown Jr.
Governor of California
c/o State Capitol, Suite 1173
Sacramento, CA 95814
 

Re: VETO Request on SBX2-5 introduced during the Extraordinary Session on Health Care’s Public Health and Development Services

 

Dear Governor Brown:

On behalf of the California chapters of the Smoke-Free Alternatives Trade Association (SFATA), we respectfully request your veto on SBX2-5, a measure that seeks to classify vapor products as “tobacco” and make related changes to the law. The bill, which passed last week during the second extraordinary session of the California Assembly, is now headed to the State Senate where a “yes” vote is inevitable.

 Our industry always has supported sensible legislation, such as prohibitions on selling to minors, reasonable licensing requirements and child-resistant packaging. However, attempting to classify these products as “tobacco” has unintended consequences, several of which are outlined below. We also believe this legislation opens the door to unfair and unwarranted tobacco tax-related implications that will discourage smokers from switching to what science says is an effective and significant alternative to combustible tobacco.

Please consider the following:

  •  Vapor products are not tobacco products because they clearly do not contain tobacco. Vapor products are significantly different than combustible cigarettes. They are technology products comprised of metal and electronic circuitry and use heat from a battery to vaporize e-liquids rather than combustion to burn tobacco. It is scientifically impossible to create an equivalent between the risk posed by combusted tobacco and that posed by vapor products because the chemical makeup of the products is entirely different. Even California’s own current definition of vapor products says they do not meet the definition of a cigarette or tobacco product, since they do not contain tobacco and are not subject to the state’s tobacco excise tax. 
  • Other products such as therapeutic vaporizers may be subject to regulation. The language “electronic device that delivers nicotine or other vaporized liquids to the person inhaling from the device” is broad and could be construed to capture products that the legislature did not intend to regulate as “tobacco products,” such as therapeutic vaporizers that are not subject to FDA approval requirements and products such as air fresheners or “aromatherapy” devices.
  • Hardware including batteries will be regulated as a “tobacco.” The new definition of “tobacco product,” and in particular the “component, part, or accessory of a tobacco product, whether or not sold separately” language is broad enough to capture hardware, including batteries, which are represented for use in or in conjunction with vaping products.
  • SBX2-5 legislation leaves ambiguity as it relates to licensing. Although it appears that Chapter 2 of the Cigarette and Tobacco Product Licensing Act of 2003 (CTPLA) (which requires licensure of retailers) would incorporate the new definition of “tobacco product,” the other Chapters of CTPLA would continue to use the Revenue and Taxation Code (RTC) definition, as incorporated by the California Business and Professions Code at Sec. 22971(s).
  •  The consequences for a vapor retailer are unclear. Under CTPLA Sec. 22974, retailers would need to “retain purchase invoices that meet the requirements set forth in Section 22978.4 for all cigarettes or tobacco products the retailer purchased for a period of four years.” Section 22978.4 applies to wholesalers and distributors and is in Chapter 3 of CTPLA, so it uses the RTC definition of “tobacco product,” which does not include vaping products.  Given that such wholesalers and distributors need not comply with 22978.4, it is not clear what would be the consequences for a retailer, if any.  
  • Legislation may impact a vapor business’ ability to successfully operate. The stigma of being equated with tobacco has many negative consequences, including the potential to be denied workers’ compensation and product liability insurance, as well as being forced out of financial institutions and merchant service agreements. 
  • Raising the minimum age does not take into consideration current adult smokers between the ages of 18-21. According to a 2012 California Health Interview Survey, 16 percent of male smokers, and 11 percent of women smokers, are between the ages of 18-24, respectively. Studies have revealed smoking cessation products such as patches and gums are not effective. Removing this group from access to vapor products, which science has proven to be 95+ percent less harmful than combustible tobacco, as well as an effective tool at replacing smoking, leaves these current adult smokers without viable options to  help them stop smoking. Similar legislation such as SB7X2 and AB8X2 also cuts-off these smokers from significant alternatives to smoking. 
  • Linking vapor products to tobacco will lead to excessive taxation. It is very likely that measures SB9X2 and AB10X2 granting local jurisdictions the ability to apply tobacco taxes will pass and head to your desk for signature. Not only does this create a patchwork of inconsistent laws across the state, it leaves the vapor industry at risk of being taxed like tobacco products, which certainly will lead to an unregulated, underground market of these products, as well as become considerably more expensive than combustible tobacco. There also is no clear indication of how these products will be taxed, such as vapor products that do not contain nicotine and all other non-nicotine related hardware, which can are used for many applications other than vaping, leaving enormous ambiguity in the proposed law. 

Our industry was built by former smokers that morphed into small- and mid-sized businesses as a way to offer a significant alternative to combustible tobacco. In California alone, there are approximately 1,400 vaping retail locations, plus hundreds of manufacturers, distributors, and related businesses that contribute to the state’s economy, generating taxes and thousands of jobs. 

The majority of the scientific community believe vapor products can be effective in achieving the goal of harm reduction caused by smoking, especially in California, which costs the state $18 billion in annual healthcare costs, and is responsible for 37,000 deaths each year. Fewer smokers also will contribute to cost savings among Medicaid patients, where the prevalence for smoking is more than twice the national average. In California, 45 percent of adult smokers receive Medi-Cal, according to 2011 CDC data. Even the FDA has acknowledged that vapor products may be a viable option to help smokers who are otherwise unable or unwilling to quit.

SFATA represents a wide cross-section of the entire vapor product industry, including distributors, manufacturers, and retailers. Its membership is comprised of responsible business owners who are committed to ensuring a path for the continued innovation of products that researchers worldwide have agreed could eliminate the public health hazards caused by use of combustible tobacco cigarettes. 

While we share the same goal of eliminating smoking as many of the measure’s advocates, we believe SBX2-5 is actually counterproductive to that goal and we urge your consideration for a veto.

Please visit Sfata.org for more information including scientific research on vaping as well as our top 10 vapor facts that clarifies misconceptions about the vapor industry. 

Sincerely,

 

Cynthia Cabrera
President & Executive Director

 

Media Contacts:
George Medici | Matt Sheldon
PondelWilkinson
gmedici@pondel.com|msheldon@pondel.com
310.279.5980

Los Angeles E-Cigarette Usage Ban

What you can do to help:

1) LA Ban Open Event: an opportunity to meet with the sponsor of the LA Ban and share your thoughts and concerns.

February 22, 2014 at 9:30am – 12pm
Stein on Vine
848 Vine St
Los Angeles, CA 90038

CONTACT: 
Sylvan De La Cruz · sylvan.delacruz@lacity.org · 323-957-4500

2) We encourage you to contact your State Representative and State Senate in regards to these issues, the facts below will help with the industry’s argument against this pending ordinance. (Find out who represents you here)

E-Cigarettes Are Not Combustible Cigarettes
Technology, not tobacco. E-cigarettes are based on new technology that offers an alternative to combustible cigarettes that contain tobacco. E-cigs don’t contain tobacco, they don’t emit smoke, and they shouldn’t be treated like tobacco cigarettes.

E-Cigarettes Have Many Benefits for Users
E-cigarettes and personal nicotine vaporizers give cigarette smokers an alternative to combustible tobacco products, which are widely viewed as a public health scourge. Restricting e-cig use will likely send smokers straight back to cigarettes.

E-Cigarettes Have Many Benefits For The Community
The ordinance will hurt small business. The burden of being treated like a tobacco company and having its products subject to regulations and restrictions created for tobacco would place a large strain on the small retail and other companies in the vaporizing space and could drive many out of business completely.

3) Social Media outlets such as Facebook and Twitter will assist in the efforts to make our opposition known. We have provided social media content that is easy to use. Simply insert your Council member’s information and/or neighborhood where appropriate.

General

Live in [LA neighborhood]? Tweet, FB and call councilman [twitter handle] to vote NO on the #ecig ban by Feb. 24 #ClearTheHaze

A bill is working its way through the #LA City Council to ban #ecigs. Make your voice heard on Feb. 24 at 2pm. [LINK]

Get the word out and rally against an ordinance banning ecigs on Feb. 24@ 2pm. #SaveEcigs

Calling all #LA #vapers. Show your support and #ClearTheHaze on ecigs Feb. 24 at City Hall @ 2pm

I just called my #LA city council member [username and phone number] to vote against the Feb. 24 #ecig ban. Have you? Find yours here: [LINK]

Share your story about how vapor products have helped you & why you support adults’ rights to use them.

Jobs, Small Business, Local Economy

.[Councilman’s Twitter Handle] is trying to impose #ecig regulation that will kill jobs! Rally against this ban on Feb.24 at 2pm. Learn more [LINK]

.[Councilman’s Twitter Handle] why are you hurting small business? Stand up for #ecigs on Feb.24 at city hall. #ClearTheHaze #CityofLA

.[Councilman’s Twitter Handle] health AND #freedom to vape, #ecigs promote both! http://wapo.st/M0Vcr1

.(Councilman’s Twitter Handle), help don’t harm our local #ecig economy! Vote NO on ordinance to ban ecigs. #smallbusiness #cityofLA

.[Councilman’s Twitter Handle] you talk about #jobs & #employment, but supporting an #ecig ban will hurt small biz. #badlegislation

.[Councilman’s Twitter Handle] The #LosAngeles #ecig ban will do more harm to local business than good!

Individual Freedom and Limited Government

Tell your #LA Council member to vote against unfair #ecig regulation on Feb. 24. Don’t let this bill revoke your right to use a tobacco alternative!

Call your #LA Council member to vote NO on unfair #ecig regulation. Don’t let this bill take away your rights! Find yours here: [LINK]

Don’t Bloomberg my #ecigs! #freedom

.[Councilman’s Twitter Handle], Don’t tread on my #ecigs. Vote NO on Feb. 24 ecig ban. #freedomtovape

Keep the bureaucracy off my #ecigs! Vote NO on ordinance to ban ecigs. #Badlegislation

Public health AND #freedom of choice, #ecigs promote both! Vote NO on ordinance to ban them.

Technology and Innovation

Show your support and defeat the ordinance to ban #ecigs on Feb. 24 at City Hall. Help the future of #California #tech. [LINK]

Keep #California competitive! Don’t stifle #ecig #technology! Vote NO on ban against electronic cigarettes

.[Councilman’s Twitter Handle] #ECigs are not tobacco, they’re tech. Learn more here: http://ow.ly/t7X3y

.[Councilman’s Twitter Handle] Ecigs are technology, not tobacco! Vote NO on Feb 24. and #ClearTheHaze #ecig

Los Angeles City Council Members

District 1 – Gil Cedillo
http://www.facebook.com/GilbertCedillo
http://twitter.com/gilcedillo

District 2 – Paul Krekorian
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http://twitter.com/paulkrekorian
http://plus.google.com/107723227427250958735/
http://www.youtube.com/user/PaulKrekorian
http://cd2news.tumblr.com/

District 3 – Bob Blumenfield
http://www.facebook.com/BobBlumenfieldSFV
http://twitter.com/BobBlumenfield
http://www.youtube.com/user/BobBlumenfield
http://instagram.com/bobblumenfield#

District 4 – Tom LaBonge
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District 5 – Paul Koretz
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District 6 – Nury Martinez
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District 7 – Felipe Fuentez
http://www.facebook.com/Fuentes4LA
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http://www.youtube.com/fuentes4la
http://instagram.com/fuentes4la#

District 8 – Bernard Parks
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http://www.youtube.com/user/LACD8TV

District 9 – Curren D. Price, Jr.
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District 10 – Herb J. Wesson
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District 11 – Mike Bonin
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District 12 – Mitch Englander
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http://plus.google.com/101199045773567439782/posts

District 13 – Mitch O’Farrell
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http://www.youtube.com/channel/UCEoyAc88cjAbaQuQmHECwTw
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District 14 – Jose Huizar
http://www.facebook.com/jose.huizar
http://www.facebook.com/pages/Jose-Huizar/45038324043
http://twitter.com/josehuizar
http://www.youtube.com/user/huizaronline
http://plus.google.com/109615325874260683908/posts
http://josehuizar.com/

District 15 – Joe Buscaino
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