Extras on Excise: New Jersey Tax on E-Cigarette Solutions Goes Into Effect


On July 1, 2018, New Jersey Gov. Phil Murphy (D) signed 2018 N.J. A. 4132 into law, imposing an excise tax on sales of liquid nicotine (generally defined as “any solution containing nicotine that is designed or sold for use with an electronic smoking device,”) within the state effective Sept. 29, 2018.

While distributors, wholesalers, and/or importers of traditional forms of tobacco (e.g., cigarettes, cigars, chewing tobacco) have long been subject to excise taxes in the Garden State, entities selling liquid nicotine were not subject to specific excise taxes prior to N.J. A. 4132.

The new law generally requires distributors and wholesalers selling liquid nicotine to retailers and/or consumers in New Jersey to collect the tax at a rate of $0.10 per fluid milliliter of solution, as listed by the manufacturer. Distributors and wholesalers are required to submit monthly tax returns by the 20th day of each month.

Many liquid nicotine distributors, wholesalers, and retailers are also subject to a floor stocks tax on inventories of liquid nicotine held at the close of business on Sept. 28, 2018.

The New Jersey Division of Taxation has issued multiple publications regarding the liquid nicotine tax, including Frequently Asked Questions and multiple notices, in an effort to help businesses with the imposition of the new tax.

Continue the discussion in the Bloomberg Tax State Group on LinkedIn: Do you believe the recent trend of state-imposed taxes on e-cigarette solutions will put pressure on the federal government to impose taxes on these products? Why or why not?

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