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SB 781 - Establishes 18 Percent Tax on E-Cigarette Liquid Nicotine - Michigan Key Vote


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Title: Establishes 18 Percent Tax on E-Cigarette Liquid Nicotine

Vote Smart's Synopsis:

Vote to pass a bill that establishes an 18 percent tax on e-cigarette liquid nicotine products.



  • Classifies alternative nicotine products and consumable material as “tobacco products”, beginning January 1, 2021 (Sec. 2). 

  • Defines “alternative nicotine products” as a noncombustible product containing nicotine that is intended for human consumption, whether chewed, absorbed, dissolved, or ingested by any other means (Sec. 2).

  • Defines “consumable material” as any volume of liquid nicotine solution that is depleted as an electronic smoking device is used (Sec. 2). 

  • Defines “electronic smoking device” as any device or component, part or accessory of a device that can be used to deliver aerosolized or vaporized consumable material to the person inhaling from the device (Sec. 2).

  • Requires manufacturers, wholesalers, vending machine operators, transportation companies, unclassified acquirers, and retailers to segregate the price paid for consumable material from the price paid for the electronic smoking device when they are sold in one package, in their records, written statements, and invoices or bills of lading (Sec. 6).

  • Increases the maximum tax on an individual cigar from 50 cents to 65 cents beginning November 1, 2020, and from 65 to 75 cents beginning November 1, 2021 (Sec. 7).

  • Establishes a tax of 18 percent on the wholesale price for consumable materials, beginning January 1, 2021 (Sec. 7).

  • Establishes a tax of 50 cents per ounce of alternative nicotine products on the basis of net weight of the product as listed by the manufacturer (Sec. 7).

  • Requires every licensee and retailer who, on January 1, 2021, has on hand for sale any consumable materials, to file a complete inventory of those products before February 1, 2021 (Sec. 7).

  • Requires, beginning October 1, 2021, the 18 percent tax imposed on consumable materials to be distributed as follows (Sec. 12):

    • The first $250,000 credited to the Department of Treasury for tax enforcement purposes;

    • The next $2,500,000 distributed to local health departments for local health programs;

    • The next $2,500,000 credited to the Department of Health and Human Services for enforcement and compliance purposes; and

    • The remainder credited to the general fund of this state.

Title: Establishes 18 Percent Tax on E-Cigarette Liquid Nicotine