Pennsylvania's vape tax: Good for state, bad for business?

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Doug McKelway reports from Washington, D.C.

A Pennsylvania tax on vaping products and e-cigarettes is threatening to close a large number of businesses despite bringing nearly $13 million to state coffers.

The law, which took effect almost one year ago, taxes 40 percent of vape products. The Department of Revenue says the tax has brought in $13.7 million, Philly.com reported.

But despite the tax's popularity among lawmakers, vape shop business owners say the levy is forcing many of them to shut down.

More than a quarter of the state’s estimated 400 shops have closed, the Vapor Technology Association says. In order to stay open, owners have had to increase prices.

Vape advocates also say the tax could cause a public health issue. They argue that vaping offers a healthy alternative to tobacco, and higher prices could turn people away.

While some studies have found vaping to have lower levels of toxins than tobacco, the Food and Drug Administration has said more research was needed to be conclusive, Philly.com reported.

Advocates have pushed to have the tax repealed, but there has been little movement on the issue.