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D.C.’s New Tax Policy for Vapor and Tobacco Products, October 2015

  • Sep 17, 2015 | Gail Cole

 Vapor products to be taxed as "other tobacco products" in DC, October 2015.

The District of Columbia is changing excise and sales tax rates on tobacco and vapor products, effective October 1, 2015.

Vapor products

Beginning October 1, vapor products are subject to excise tax as “other tobacco products” and exempt from District of Columbia sales tax.

Vapor products are defined as “any non-lighting, noncombustible product that employs a mechanical heating element, battery, or electronic circuit, regardless of shape or size, that can be used to produce aerosol from nicotine in a solution or any vapor cartridge or other container of nicotine in a solution or other form that is intended to be used with or in an electronic cigarette, electronic cigar, electronic cigarillo, electronic pipe, or similar product or device.”

The excise tax rate on “other tobacco products” is currently 70% of wholesale sales. However, effective October 1, 2015, when vapor products become subject to the tax, the rate drops to 67%. Businesses should report the vapor products excise tax on the FR-1000Q Tobacco Products Excise Quarterly Tax Return.

Cigarette tax rate increase

As the excise tax rate for electronic cigarettes drops, the excise tax rate for normal cigarettes is increasing. As explained by the Office of Tax and Revenue (OTR):

The District of Columbia cigarette excise tax consists of fixed tax of $2.50 per package of 20 cigarettes and a variable surtax levied in lieu of the sales tax.  Effective October 1, 2015, the surtax is increased from $.40 to $.41 cents per package of 20 cigarettes, resulting in a combined cigarette excise tax of $2.91 per package of 20 cigarettes.”

Additional information is available through the OTR.

Find accurate tax rates for the District of Columbia and other states with this free sales tax rate map.

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.