HB84: HB84 Revenue and taxation; increase tax rate on consumable vapor products

Georgia currently taxes vaping products under Chapter 11 of Title 48 of the Official Code of Georgia Annotated. Open-system vapor products (refillable e-liquids) and disposable vape devices containing liquid are taxed at 7 percent of the wholesale cost price. This bill would raise that rate to 15 percent. It leaves the tax on closed-system, prefilled cartridges at 5 cents per fluid milliliter and leaves cigarette, cigar, and smokeless tobacco tax rates unchanged. The bill also states that the General Assembly intends for any extra money raised by this increase, starting July 1, 2025, to be set aside each year for healthcare issues affecting Georgia residents, and requires the Department of Revenue to report the increased proceeds if asked by legislative appropriations leaders. It also rewrites the same tax section again to take effect December 31, 2029, keeping the same 15 percent rate. The bill also marks two existing definitions, 'closed system' and 'open system,' as reserved (removed) rather than defined. The main tax change and reporting requirement take effect once the Governor signs the bill or it becomes law without signature.

• Raises the excise tax on open-system consumable vapor products from 7 percent to 15 percent of the wholesale cost price.
• Raises the tax on pre-filled, non-refillable vapor devices from 7 percent to 15 percent of wholesale cost at the time of sale.
• States that any extra tax money from this increase collected after July 1, 2025 is intended to be set aside yearly for healthcare issues affecting Georgia residents.
• Requires the Department of Revenue to report the amount of increased proceeds to legislative appropriations leaders upon request.
• Removes the existing statutory definitions of 'closed system' and 'open system' vaping products, marking them as reserved.
• Re-enacts the same 15 percent tax rate structure in a second version of the law that takes effect December 31, 2029.

Vape shops and retailers that sell open-system e-liquids and disposable pre-filled vape devices, adult consumers who purchase these products, the Georgia Department of Revenue, and state healthcare programs that could receive the additional tax revenue.

Georgians who buy open-system vaping liquids or disposable pre-filled vapes would pay a higher price because of the doubled tax rate, while closed-system cartridge users would see no change. The bill signals that added revenue should support healthcare spending, though it does not create a binding earmark.

• Section 1 removes the statutory definitions of 'closed system' and 'open system' consumable vapor products in O.C.G.A. § 48-11-1, labeling them 'Reserved.'
• Section 2 amends O.C.G.A. § 48-11-2 to raise the tax on open-system vapor products and pre-filled vapor devices from 7 percent to 15 percent of wholesale cost price.
• Section 2 adds subsection (a.1) stating the General Assembly's intent that proceeds from the increase after July 1, 2025 be appropriated annually for healthcare issues, with reporting to the Appropriations Committees on request.
• Section 3 re-enacts the same 15 percent tax rates and healthcare-intent language in a version of the code section that takes effect December 31, 2029.
• Section 4 sets the general effective date as upon the Governor's approval (or becoming law without approval), except Section 3, which takes effect December 31, 2029.
• Section 5 repeals conflicting laws.

1. 2025-01-27House Second Readers (House)
2. 2025-01-17House First Readers (House)
3. 2025-01-16House Hopper (House)

• Michelle Au (D, HD-050)Primary sponsor
• Ron Stephens (R, HD-164)
• Lee Hawkins (R, HD-027)
• Gerald Greene (R, HD-154)
• Debbie Buckner (D, HD-137)

• vaping taxes
• tobacco and vapor regulation
• excise tax
• healthcare funding
• tax rate increase