SOUTHERN

LEGISLATIVE
CONFERENCE

E-CIGARETTES IN THE SLC STATES

A REGIONAL RESOURCE FROM THE SLC

OF

THE COUNCIL
OF STATE
GOVERNMENTS

Copyright April 2015

by SLC Policy Analyst Lauren Greer

n recent years, the United States has seen a growing popularity with the use of electronic cigarettes
and similar electronic nicotine delivery devices. Electronic cigarettes, or e-cigarettes, are battery-operated
single-use or reusable devices with interchangeable
cartridges that use a type of heating element to turn nicotine and other chemicals into a vapor inhaled by its user. The
cartridges come in a variety of colors and flavors, like apple pie, cotton candy, mint chocolate, and tutti frutti, just to
name a few. It is suggested that the array of flavors, combined with the relative ease of purchasing e-cigarettes and its
components at mall kiosks and online, has made e-cigarettes
particularly popular among youth.
According to the Centers for Disease Control and Prevention
(CDC), more than 263,000 youth who had never smoked a
tobacco cigarette used e-cigarettes in 2013, which is more
than three times the number reported in 2011 (79,000).1
Following this trend, the 2014 Monitoring the Future
survey, conducted by the National Institutes of Health, found
that while daily tobacco cigarette use among adolescents
continues to decline, an alarming number of adolescents
have tried e-cigarettes.2 Of the more than 41,000 students in
8th, 10th, and 12th grades who were surveyed, 8.7 percent,
16.2 percent, and 17.1 percent, respectively, reported having
tried e-cigarettes within the last 30 days.3 Between 4 percent
and 7 percent of those students responded that they had
never smoked a tobacco cigarette.4 Comparatively, only 1.4
percent, 3.2 percent, and 6.7 percent of the 8th, 10th, and
12th graders surveyed, respectively, reported having smoked
a tobacco cigarette within the last 30 days; this is a decline of
almost 50 percent from five years ago.5
Recognizing the growing popularity of e-cigarettes and the
potential dangers the uncertainty and misconceptions about

SERVING THE SOUTH

Photo courtesy of TBEC Review via flickr Creative Commons License

VAPOR RISING:

them could pose, many states passed legislation in the last

few years limiting the sale and use of e-cigarettes, rather than
wait for future regulations from the U.S. Food and Drug
Administration (FDA). A recent report by the CDC found
that 40* states have enacted laws prohibiting the sale of electronic nicotine delivery systems, including e-cigarettes, to
minors, while 10 states and the District of Columbia still permit the sale of these products to minors.6
Unlike traditional cigarettes, e-cigarettes do not contain
tobacco or produce the secondhand smoke that has been
found to be particularly harmful to smokers and nonsmokers.7
Despite these differences, e-cigarettes do contain nicotine,
which is the most addictive chemical in tobacco products.8
To date, there has been a lack of clinical scientific study
on e-cigarettes, which leaves many questions about their
potential risks, including the amounts of nicotine or chemicals
that actually are being inhaled during use and whether
e-cigarettes are a safe alternative to tobacco cigarettes.9 A
preliminary analysis of various e-cigarette samples conducted
by the FDA found the presence of some amount of harmful
toxins, including some specific to tobacco, and inconsistent
levels of nicotine, including those specifically labeled as
containing no nicotine.10 While the FDA cautions that this
analysis should not be used to draw conclusions about the
health and safety of e-cigarettes, it does signal the need for
further study on the issue.
More than half of the Southern Legislative Conference states
provide a specific exclusion of cigarettes, tobacco products,
and/or FDA-regulated drugs and devices from the definition
of e-cigarette, alternative nicotine product, or vapor product.
Likewise, some states exclude alternative nicotine products
* Based on a reading of relevant state statutes, some interpretations
could argue that fewer states have enacted such laws.

THE SOUTHERN OFFICE OF THE COUNCIL OF STATE GOVERNMENTS

P.O. Box 98129 | Atlanta, Georgia 30359
ph: 404/633-1866 | fx: 404/633-4896 | www.slcatlanta.org

and vapor products from the definition of tobacco and

tobacco products. In the absence of clear exclusions under
both definitions, some argument could be made about the
legal application of tobacco regulations to e-cigarettes. For
example, if the definition of e-cigarette excludes cigarettes
and other tobacco products, but the definition of tobacco or
tobacco products remains silent on the exclusion or inclusion
of e-cigarettes, do the statutes that mention only tobacco
products apply to e-cigarettes not containing tobacco? This
exception shows that the legislature recognizes a distinction
between e-cigarettes and tobacco products, which could lead
to interpretation that e-cigarettes not containing tobacco are
not subject to provisions that specify only tobacco products.
It is under this interpretation that the subsequent analysis
proceeds.

nounced that the FDA would instead be developing a new

strategy to regulate e-cigarettes as tobacco products. However, the FDA did not propose rules to assert this regulatory
authority over e-cigarettes until April 2014.

FDA PROPOSAL

The FD&C Act defines tobacco product as any product made

or derived from tobacco that is intended for human consumption, including any component, part, or accessory of a
tobacco product (except for raw materials other than tobacco
used in manufacturing a component, part, or accessory or
a tobacco product).11 The Tobacco Control Act, which created the FDA Center for Tobacco Products, granted the
FDA regulatory oversight of the manufacture, distribution,
and marketing of tobacco products.12 The Tobacco Control
Act identifies regulatory authority for cigarettes, cigarette
tobacco, roll-your-own tobacco, and smokeless tobacco,
but also allows the FDA to promulgate rules extending this
oversight to any other tobacco product that the Secretary of
Health and Human Services deems by regulation to be subject to its provisions.13 Under its immediate authority, the
FDA promulgated rules setting restrictions on the retail sale
of cigarette and smokeless tobacco and the advertising and
marketing of tobacco products toward youth.

E-cigarettes, which were developed in China in 2004, entered the U.S. market in 2007. Between 2008 and 2010, the
FDA regulated e-cigarettes as an unapproved drug-device
combination product under the Federal Food, Drug, and
Cosmetic Act (FD&C Act). In 2011, the FDA announced
it would not appeal the U.S. Court of Appeals decision in
Soterra Inc. v. FDA, 627 F. 3d 891 (D.C. Cir. 2010), which ruled
that e-cigarettes can be regulated under the drug, device, or
combination products provision only if they are marketed
for therapeutic purposes, otherwise they only can be regulated as other products made or derived from tobacco under
the 2009 federal Family Smoking Prevention and Tobacco
Control Act (Tobacco Control Act). Consequently, it was an-

In April 2014, the FDA released its long-awaited rule proposals deeming electronic cigarettes fall under the agencys
regulatory purview.14 Currently, the FDA Center for Drug
Evaluation and Research provides regulation of e-cigarettes,
but that authority extends only to those that are marketed for
therapeutic purposes. The proposed rule would expand the
definition of tobacco products to include e-cigarettes (including non-therapeutic), cigars, pipe tobacco, waterpipe
(hookah) tobacco, novelty products like gels and dissolvables,
and components and parts of tobacco products. Under the
proposal, the rule also would deem any future products that
meet the statutory definition of tobacco products as products that fall under the FDAs regulatory powers. Included

The Texas Legislature did not meet in 2014; however, legislation

currently is being considered during the 2015 session.

One option of the rules as proposed would limit regulation to only a certain subset of cigars.

This Regional Resource from The Council of State Governments Southern Office, the Southern Legislative Conference
(SLC), examines the regulations proposed by the FDA and
the actions taken by 14 of the 15 SLC member states with regard to e-cigarettes through the 2014 legislative session.

E-cigarette kit photo courtesy of TBEC Review via Creative

Commons license.

Variety of e-liquid flavors. Photo courtesy of Lindsay Fox via

Creative Commons license.

2 E-CIGARETTES IN THE SLC STATES

among the components and parts proposed for regulation

under the rules are flavorings used for the tobacco products
and cartridges for e-cigarettes.
Upon finalization of the rule, the FDA would extend its
current regulatory authority over cigarettes, roll-yourown tobacco, and smokeless tobacco to additional tobacco
products deemed to fall under the Tobacco Control Act.
Specifically, those powers include:
Bringing enforcement action against products determined
to be adulterated and misbranded;
Requiring the submission of ingredient listings and the reporting of harmful and potentially harmful constituents for
all tobacco products;
Requiring registration and product listings for all tobacco
products;
Prohibiting the use of modified risk descriptors like low,
light, and mild and other claims, unless the FDA has issued an order permitting their use;
Prohibiting the distribution of free samples; and
Requiring pre-market review by the FDA of products
commercially marketed in the United States after February
15, 2007, and future new tobacco products.
The FDA is proposing three additional provisions that would
apply to covered tobacco products: (1) a requirement for
minimum age of purchase; (2) a prohibition on vending machine sales in facilities that permit persons under 18 to enter
at any time; and (3) a requirement of health warnings for
product packages and advertisements, which the FDA also
is proposing to apply to cigarette tobacco and roll-your-own
tobacco.
Following an extension of the original deadline, the comment period for the FDAs proposed e-cigarette rules closed
on August 8, 2014. Final rules are expected to be published
in mid-2015. The deeming provisions and age restrictions
would become effective 30 days from the date the final rule
is published. Requirements for health warnings would be effective 24 months after final publication, with an additional
30-day extension for existing domestic commerce inventory
that does not have the required warning statements. Applicants seeking compliance for products introduced after
February 15, 2007, would have 24 months following the effective date to submit applications for pre-market review.
Likewise, the FDA will not initiate enforcement action
against unapproved products on the market for 24 months
after final rule publication, or until it has issued a response
New tobacco products that do not meet the requirements for
classification as a substantially equivalent tobacco product or
one of its exceptions must receive pre-market approval from the
FDA prior to being marketed in the United States. A substantially
equivalent tobacco product is one that has the same characteristics
as a previously approved tobacco product or a product with different characteristics that does not raise different questions of public
health.

to an application for approval that was submitted within the

24-month period.

STATE ACTION ON E-CIGARETTES

With the rapid growth in the use of e-cigarettes among minors and adults, many states took action to regulate these
products rather than wait for FDA regulations to be finalized. Lending credence to these actions is the emergence of
e-cigarettes in popular culture, as is evidenced by the Oxford
Dictionary naming vape its 2014 word of the year.15
Much of the legislation enacted by SLC states included provisions defining e-cigarettes and related terms;
establishing prohibitions and penalties for minors possessing e-cigarettes; establishing prohibitions and penalties for
providing e-cigarettes; and placing restrictions on alternate
methods of selling e-cigarettes. Provisions related to the taxation of e-cigarettes and its components, and restrictions on
where e-cigarettes could be smoked, were some of the less
common components of the states legislation. See Appendix
A for the relevant code sections in each state.

Defining E-Cigarette
Much of the debate over regulating e-cigarettes centers on
how to define e-cigarette and whether e-cigarettes are the
same as tobacco products. In 2011, Tennessee became the first
SLC state to pass legislation related to electronic cigarettes.
House Bill 1729 (2011) amended the existing Prevention of
Youth Access to Tobacco Act, which was enacted in 1994,
to include limited application to e-cigarettes. This first SLC
statutory regulation of e-cigarettes defines electronic cigarette
as an electronic device that converts nicotine into a vapor
that is inhaled by a user. Under the Act, a tobacco product is
defined as any product that contains tobacco and is intended
for human consumption, including, but not limited to, cigars,
cigarettes, and bidis.
The debate over how to define e-cigarettes was especially robust in Missouri, where lawmakers twice voted to pass
Senate Bill 841 in 2014, which excludes e-cigarettes from the
definition of tobacco products, but also expressly prohibits
alternative nicotine products, which includes e-cigarettes,
from being otherwise taxed or regulated as tobacco products. Governor Jay Nixon vetoed the legislation because of
the tax exclusion. Following a vote by the General Assembly to override the governors veto, the law went into effect
in October 2014.
Similar to Missouri and Tennessee, 11 other SLC states had
enacted new definitions to encompass e-cigarettes by the
end of 2014. Alabama, Arkansas, Mississippi, and South
Carolina have defined the term electronic cigarette or
e-cigarette and include e-cigarettes in the definition of
alternative nicotine product. Georgia, Kentucky, Louisiana,
Missouri, Virginia, and West Virginia also have defined the

E-CIGARETTES IN THE SLC STATES 3

term alternative nicotine product, but that definition does

not specifically include e-cigarettes. Instead, these six states
and North Carolina have included e-cigarettes under the
definition of vapor product or nicotine vapor product.
In addition to e-cigarettes, these seven states include the
cartridges and other containers of a nicotine solution that
are intended for use with e-cigarettes in the definition of
vapor product. Florida includes e-cigarettes and cartridges
or containers under the definition of nicotine dispensing
device. Generally, these terms define an e-cigarette as an
electronic or noncombustible product or device that uses
some type of heating element to produce a vapor from
nicotine or other substances. It should be noted, however,
that the definitions, as written, in Florida, Georgia, Missouri,
North Carolina, Tennessee, Virginia, and West Virginia,
only apply to vapor products, nicotine dispensing products,
or e-cigarettes that have nicotine. Whereas, Alabama,
Arkansas, Kentucky, Louisiana, Mississippi, Oklahoma, and
The Oklahoma definition of vapor product is nearly identical to
the definition of vapor products in these seven states; however,
Oklahomas enumerated inclusions only list the cartridges and
containers of nicotine solution intended for use with e-cigarettes;
whereas, the other states include e-cigarettes, cartridges, and
containers. Based on a reading of the statutes, Oklahoma only
implies that the e-cigarette itself is a vapor product while the other
states explicitly define it as such.

South Carolina have defined e-cigarettes or vapor products

more broadly by including nicotine or other substances. As
more is learned about e-cigarettes, this distinction could
prove to be too narrow or too broad to effectively regulate
these products.
North Carolina and West Virginia are the only SLC states
that include vapor products or e-cigarettes in the definitions
of tobacco product or tobacco-derived product, respectively. While the distinction in North Carolina is presumptively
for taxation purposes, West Virginia does not currently tax
e-cigarettes. Tennessee is the only SLC state that does not
provide an exclusion for products regulated by the FDA as
drugs and/or devices under the federal FD&C Act.

Possession by a Minor
It is unlawful for a minor to purchase or attempt to purchase
e-cigarettes in nine of the 14 SLC states that have enacted e-cigarette laws. Ten states have enacted statutes that
make possession or attempted possession by a minor unlawful. Georgia, Kentucky, Louisiana, and Missouri provide
an exception that allows a minor to possess e-cigarettes if
they are obtained from a parent, guardian, or family member. It is not unlawful in Georgia for a minor to possess a
vapor product, including an e-cigarette, if it is provided by

Table 1

Terms Defined in E-Cigarette Statutes

Alabama
Arkansas
Florida
Georgia
Kentucky
Louisiana
Mississippi
Missouri
North Carolina
Oklahoma
South Carolina
Tennessee
Virginia
West Virginia

alternative nicotine product;a,e,h electronic cigarette;e,h tobacco or tobacco products

alternative nicotine product;a,e,h e-cigarettee,h
nicotine dispensing device;a,b nicotine product;e,h tobacco products
alternative nicotine product;e,g,h cigarette; tobacco product;f,g,h vapor producta,b,h
alternative nicotine product;h tobacco product;f,g,h vapor producta,b,h
alternative nicotine product;e,g,h tobacco product; vapor producta,b,h
alternative nicotine product;a,e,g electronic cigarettee,h
alternative nicotine product;e,g,h tobacco products;f,g vapor producta,b,e,f
consumable product; tobacco-derived product;g,h tobacco product;d vapor producta,b,h
tobacco product; vapor productb,h
alternative nicotine product;a,e,h electronic cigarette;e,h tobacco productf
electronic cigarette; tobacco product
alternative nicotine product;e,g,h nicotine vapor product;a,b,h tobacco productc,d,h
alternative nicotine product;e,g,h tobacco product; h tobacco-derived product;a,c,d,h vapor producta,b,h

Notes:
Terms in bold were defined or amended by the enacting legislation
a
Definition includes electronic cigarettes
b
Definition includes cartridges containing nicotine or other solution for use with e-cigarettes
c
Definition includes alternative nicotine products
d
Definition includes vapor products
e
Definition excludes tobacco or tobacco products
f
Definition excludes alternative nicotine products
g
Definition excludes vapor products
h
Definition excludes FDA-regulated drugs, devices, and/or combination products

4 E-CIGARETTES IN THE SLC STATES

a parent or guardian and possession is within the parents

or guardians home while he or she is present. Similarly,
in Louisiana, a minor may possess an alternative nicotine
product if in a private residence or accompanied by a parent, spouse, or legal guardian who is at least 21 years old.
Kentucky law permits minors to accept a vapor product, including an e-cigarette, if it is from a family member. Unlike
Georgia and Louisiana, Kentucky does not confine the exception to private residences. In Missouri, the prohibition
on distributing vapor products to a minor does not apply
to family members on private property; however, there is
no complementary language that permits a minor to possess vapor products under these circumstances. Georgia is
the only state with an exception that also has complementary statutes to allow a minor to possess e-cigarettes provided
by a parent or guardian and to allow a parent or guardian to
provide e-cigarettes to a related minor. Alabama, Arkansas,
Kentucky, Louisiana, Missouri, North Carolina, Oklahoma,
South Carolina, and Virginia provide an exception for minors who possess e-cigarettes within the scope of their
employment duties.
Mississippi and Tennessee are the only two SLC states with
e-cigarette laws that do not include specific prohibitions on
the possession or purchase of e-cigarettes by minors. While
both states do have laws prohibiting the possession or purchase of tobacco products by a minor, based on a reading of
the statutes, these provisions were not extended to include
e-cigarettes.

Punishment for a Minor

The punishments for a minor who violates these laws range
from confiscation and destruction of the product by law enforcement to paying a fine or completing court-ordered
community service. Additional penalties include compulsory participation or attendance at a tobacco education or
smoking cessation program or withholding, suspending,
or revoking the minors drivers license. Florida, Kentucky,
Missouri, Oklahoma, Virginia, and West Virginia have graduated penalties for repeated violations. Alabama, Georgia,
and South Carolina provide a maximum penalty for violation. Louisiana law provides separate penalties for a minor
possessing e-cigarettes and a minor purchasing e-cigarettes.
Each possession violation carries a fine up to $50, while a
graduated penalty for purchase violations can range from $50
for the first violation up to $400 for the fourth and subsequent violations. Subsequent violations are only subject to
graduated penalty if committed within 12 weeks of the initial violation in Florida, or within one year in Kentucky
and Oklahoma. Florida, Georgia, Kentucky, South Carolina,
Virginia, and West Virginia have provisions to allow for
community service in conjunction with, or in lieu of, fines or
other punishment. Community service options range from
up to five hours in South Carolina to a maximum of 40 hours
in Kentucky and Virginia for repeat offenses.

In Oklahoma, it is a misdemeanor for a minor found to be

in possession of a vapor product to refuse to provide information on where and from whom the product was obtained
if asked by a police officer, constable, juvenile court officer,
truant officer, or teacher.
Under Florida law, the knowing possession of a nicotine
product or nicotine dispensing device by a minor, or the
misrepresentation of age or military service by a minor for
the purpose of purchasing such products, is a noncriminal
offense. The statute prescribes a fine of $25, in lieu of community service, for the first violation and a $25 fine for a
second violation within 12 weeks of the first violation. Eighty
percent of the civil penalties collected for such violations are
directed to the Department of Education to provide teacher
training and research and evaluation to reduce and prevent
the use of tobacco products, nicotine products, or nicotine
dispensing devices by children.**

Providing E-Cigarettes to a Minor

Thirteen of the 14 SLC states that have enacted legislation
to regulate e-cigarettes have placed specific restrictions, relative to minors, on the sale of e-cigarettes, vapor products,
or alternative nicotine products. In each of these states, it
is unlawful for a person, business, manufacturer, and/or retailer to give, barter, sell, furnish, deliver, purchase, and/or
offer to do such things with regard to e-cigarettes to minors.
Similar to the provisions set forth for minors in possession
of e-cigarettes, providing e-cigarettes to a minor generally is
considered a civil violation or low-level misdemeanor.
Florida, Georgia, North Carolina, Oklahoma, South Carolina,
Tennessee, and West Virginia classify the violation of these
provisions as a misdemeanor. Arkansas, Louisiana, Kentucky,
Mississippi, Missouri, and Virginia specify that providing
e-cigarettes to a minor is a violation or lesser offense.

Fines and Penalties

Laws in Louisiana, Mississippi, Missouri, Oklahoma, South
Carolina, Tennessee, Virginia, and West Virginia provide
for a graduated maximum or set fine for a first, second, third,
fourth, and subsequent violation of their e-cigarette laws. The
punishments for a first offense range from a written warning in Tennessee, to a $25 fine in Missouri, to a maximum of
$200 in South Carolina. West Virginia has the largest range
in fines with $50 for the first violation up to a maximum of
$5,000 for a fourth or subsequent violation.
**The additional 20 percent remains with the clerk of the county
court to cover administrative costs.
Alabama law prohibits the selling, bartering, exchanging, or giving to minors cigarettes, cigarette tobacco, cigarette paper, or any
substitute for such things. However, based on a reading of the statutes, no amendment to the existing law incorporates e-cigarettes or
alternative nicotine products into this prohibition.

E-CIGARETTES IN THE SLC STATES 5

Four states limit the graduated penalties for repeat offenses if

the subsequent offense occurs within a specific time after the
first. Oklahoma and West Virginia limit subsequent offenses
to two years, South Carolina limits them to three years, and
Tennessee has the longest specified period of five years.

Table 2

Additional Penalties for Retail Owners

In addition to the graduated penalties, Oklahoma law allows
for the suspension of a stores license to sell tobacco products
or its sales tax permit for up to 30 days or 60 days for third

State Tobacco Tax Rates 2015

Cigarette Tax
(per pack of 20)

Rank
(50+DC)

Other Tobacco Tax

Alabama

$0.425

47

Chewing tobacco $0.015/oz.

Snuff $0.01 $0.08/6 oz.; $0.12/each oz. or fraction over 6 oz.
Little cigars1 $0.04/10 cigars
All other cheroots, stogies, and cigars $3.00 $40.50/thousand, based on retail price
Smoking tobacco and cigar wrappers $0.04 $0.21, depending on weight, up to 4 oz.;
$0.06/each 4 oz. or fraction over 4 oz.

Arkansas

$1.15

30

All other 68% of pre-discount invoice price (not to exceed $0.50 per cigar)

Florida

$1.339

27

All other (except cigars) 85% of wholesale sales price

Georgia

$0.37

48

Loose or smokeless tobacco 10% of wholesale cost price

Little cigars $0.05/20 cigars
Cigars 23% of wholesale cost price

Kentucky

$0.60

40

Snuff $0.19/1.5 oz. of net weight sold

Chewing tobacco $0.19 $0.65, based on net weight of unit sold
Other tobacco products 15% of distributors actual sales price

Louisiana

$0.36

49

Cigars 8% 20%, depending on manufacturers invoice price

Smokeless tobacco 20% of invoice price
Smoking tobacco 33% of invoice price

Mississippi

$0.68

37

All other 15% manufacturers list price

Missouri

$0.17

51

All other 10% of manufacturers invoice price

North Carolina

$0.45

45

All other 12.8% of the cost price of products

Consumable product $0.05/milliliter

Oklahoma2

$1.03

31

Chewing tobacco, smokeless tobacco, & snuff 60% of factory list price
Smoking tobacco 80% of factory list price
Little cigars $0.036/cigar
Cigars $0.10 $0.12/cigar, based on recommended retail sales price

South Carolina

$0.57

42

All other 5% on the manufacturers price

Tennessee

$0.62

39

All other 6.6% of the wholesale cost price

25

Little cigars $.01/10 or fraction of 10

Cigars $7.50 $15.00 per 1,000, based on factory list price and whether they contain a
substantial amount of non-tobacco ingredients
All other tobacco products $1.10/oz. and proportionate rate on all fractions of an oz.

Texas

$1.41

Virginia

$0.30

50

Moist snuff $0.18/oz.

Loose-leaf tobacco $0.21 $0.70, based on unit weight, plus $0.21/each 4 oz. increment
over 1 lb.
All other tobacco products 10% of manufacturers sales price

West Virginia

$0.55

44

All other 7% of the wholesale price

Notes:
1 Little cigars are defined as cigars weighing three pounds or less per thousand.
2 Oklahoma does not collect state sales tax on cigarettes as approved by a 2004 referendum.

6 E-CIGARETTES IN THE SLC STATES

and fourth or subsequent violations within two years. If an

employee of the store commits the violation, he or she will
be liable for the fine, but the violation will count against the
owner for license suspension purposes.
Under Missouri law, if the owner of an establishment that
sells tobacco, alternative nicotine, or vapor products provides, sells, or distributes such products to a minor, then, in
addition to graduated fines, the owner will be further penalized by the states Division of Liquor Control. The additional
graduated penalties for an owner apply to violations at the
same location within two years. The first violation will result
in a reprimand from the Division of Liquor Control, while
the second, third, and fourth or subsequent violations will result in a citation prohibiting the outlet from selling tobacco,
alternative nicotine, or vapor products for a period of 24
hours, 48 hours, and five days, respectively. If the owner
commits a knowing violation or knowingly allows employee
violations, then he or she will not be penalized if documents
are provided demonstrating an in-house, or other, compliance training program was in place for all employees who
sell the products to the general public. The training program
must provide information on the relevant state and federal
laws and meet the minimum training criteria established by
the Division of Liquor Control. The owner also must show
that each employee signed a statement indicating he or she
received training and understands the state and federal laws
and regulations regarding the sale of tobacco, alternative nicotine, or vapor products. This exemption from penalty will
not apply if four or more violations have occurred at a location within a one-year period.
Similar to Missouri, when reviewing a possible violation of
the law, the court in Arkansas may consider whether the business has adopted and enforced a written policy against selling
e-cigarettes to minors and whether the business has informed
its employees of the applicable laws; however, these actions
are not mandated. In Louisiana, violations by the agent or
employee of a retail dealer will not be regarded as acts of the
dealer when considering the suspension or revocation of the
dealers retail permit or in assessing civil penalties if his or
her employees attend a required seller-training program,
which has been approved by the commissioner of alcohol and
tobacco control.
North Carolina and South Carolina require retail establishments that sell e-cigarettes to train their employees on the
laws as they pertain to the sale of such products to minors.
Kentucky and Oklahoma require that employees be notified
of the laws, but also require each employee to sign a statement indicating that such notification was received.

Alternate Methods for the Sale of E-Cigarettes

Six SLC states have specific provisions related to the sale of
e-cigarettes on the Internet or through the mail. Arkansas,
Mississippi, North Carolina, and South Carolina require the

seller of e-cigarettes, via the Internet or other remote sales

methods, to verify the purchaser is 18 years or older through
an independent third-party (age) verification service that
compares information available from public records to the
personal information provided by the individual during the
ordering process. Similarly, Virginia allows mail order and
Internet sales if the purchasers age is verified as being at least
18-years-old using a commercially available database that is
regularly used by businesses or government entities for the
purpose of age and identity verification. Additionally, in
Virginia, the method of mailing and shipping must require
the purchasers signature before the product is released. In
Missouri, the law dictates that any person or entity that sells
or distributes e-cigarettes to a minor by mail or Internet will
be subject to a fine, but the law does not specify how a seller
must verify the buyers age.
Similar to Internet and mail order sales of e-cigarettes,
Arkansas, Florida, Georgia, Kentucky, Louisiana, Missouri,
North Carolina, Oklahoma, South Carolina, Virginia, and
West Virginia set limits on how and where e-cigarettes can
be sold by vending machine and/or a self-service display.

STATE TAXATION OF E-CIGARETTES

Some of the lowest taxes on tobacco in the country are in
SLC states. On January 1, 2015, the average excise tax on cigarettes among the 50 states and the District of Columbia was
$1.54 per pack. The average tobacco tax in the 15 SLC member states was $0.668. Among the SLC states, Texas has the
highest tobacco tax at $1.41 per pack, which ranks 25th in the
nation. Missouri, Virginia, Louisiana, Georgia, and Alabama
have the lowest tobacco tax rates in the nation.16 Comparatively, the federal cigarette tax is $1.01 per pack.
With the enactment of SB 841 (2014), Missouri became the
first state to prohibit excising and regulating e-cigarettes,
and other alternative nicotine or vapor products, as tobacco
products. This prohibition leaves e-cigarettes subject only
to state and local sales tax. Despite being the only state to
expressly prohibit taxing e-cigarettes in the same manner as
tobacco cigarettes, Missouri is not alone in the practice. In
2014, across the nation, 16 states, including Kentucky, North
Carolina, Oklahoma, and South Carolina, considered bills to
tax e-cigarettes in addition to taxes levied as state and local
sales tax; as of December 2014, only Minnesota and North
Carolina had adopted such legislation.17
Beyond the decision in these states to impose additional
taxes on e-cigarettes, there remains a significant divide between the rates at which the products are taxed. Minnesota,
which in 2013 became the first state to enact a tax on
e-cigarettes, levies a variable 95 percent tax on the wholesale price of e-cigarettes and e-juice containing nicotine.18
By comparison, Minnesota imposes a fixed tax of $2.83 per
pack on traditional cigarettes.19 Beginning June 1, 2015,
North Carolina will levy an excise tax of 5 cents per millili-

E-CIGARETTES IN THE SLC STATES 7

Figure 1

Net Cigarette Tax Revenue (thousands): FY 2009 - FY 2013

$136,331
$132,646
$128,971
$127,398
$123,115

Alabama

$144,561

$199,497
$194,405
$193,665
$184,538

Arkansas

Florida

$420,641
$1,237,742
$1,246,283
$1,143,091
$1,124,152
$204,783
$194,206
$191,075
$187,024
$181,763

Georgia

$194,641

$285,117
$268,781
$261,158
$244,659

Kentucky
$123,769
$113,535
$121,486
$112,163
$116,038

Louisiana

$64,660

Mississippi

2009

$134,561
$130,739
$128,513
$123,706

2010
2011

$94,709
$91,152
$89,966
$88,609
$86,838

Missouri

2012
$219,971

North Carolina

$25,387
$26,042

$133,201
$159,166
$157,490
$290,413
$277,930
$276,508
$264,889
$259,258

Tennessee

Texas

Note:
Striped bars indicate
a fiscal year in which
a state increased
the tax rate on
cigarettes, some of
which took effect
during the July
1-June 30 fiscal year.

$237,466
$229,741
$235,418
$242,247
$232,100

Oklahoma

South Carolina

2013
$244,631
$258,775
$261,759
$248,663

$1,174,983
$1,213,513
$1,319,922
$1,298,772
$1,229,909
$169,357
$158,362
$156,140
$168,830
$173,227

Virginia
$110,943
$108,577
$105,560
$102,866
$101,047

West Virginia
$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

$450,000

Note: Net revenue collections in Florida (2010-2013) and Texas (2009-2013) exceed $1 billion, but have, similarly, experienced declines
during the years depicted.
Source: Orzechowski and Walker, The Tax Burdern on Tobacco,Volume 48 (2013).

8 E-CIGARETTES IN THE SLC STATES

ter of consumable product. Comparatively, North Carolina

levies a tax of 45 cents per pack on traditional cigarettes and
a variable 12.8 percent on the cost of other tobacco products.20 Using industry data, the Fiscal Research Division of
the North Carolina General Assembly estimated that the
5-cent-per-milliliter tax would generate about $5.1 million
in general fund revenue each fiscal year.21
In Kentucky, the Department of Agriculture is charged with
educating the public and sellers of tobacco products on the
legal provisions and penalties for the sale and distribution of
tobacco products. To offset the cost of these educational efforts, the Department is entitled to one-twentieth of one cent
($.0005) from the three-cent ($.03) state excise tax collected
on each pack of cigarettes, and half of any fines collected under the sale and distribution laws. In 2014, this duty also was
expanded to require educating sellers of alternative nicotine
products and vapor products; however, no excise tax will be
levied on these products to provide additional funding to execute this responsibility.

SMOKE FREE LAWS & RESTRICTIONS

ON SMOKING E-CIGARETTES
As of November 30, 2014, the CDC found that 27 states and
the District of Columbia have comprehensive smoke-free
laws, but only three of those states (New Jersey, North Dakota,
and Utah) extend this prohibition to electronic nicotine delivery systems, which include e-cigarettes. Although no SLC
states qualify as smoke-free under the CDCs definition of a
comprehensive smoke-free law, which prohibits smoking in
restaurants, private worksites, and bars, a number of SLC
states do place some restrictions on where e-cigarettes can be
smoked.22 Some examples of these restrictions include, but
are not limited to, laws in Arkansas, Oklahoma, and West
Virginia that prohibit the use of e-cigarettes on school property and laws in North Carolina and Oklahoma that prohibit
their possession in state correctional facilities.
In 2014, Virginia enacted legislation directing each school
board to include in its student code of conduct provisions
prohibiting the possession of electronic cigarettes on a school
bus, school property, or at school-sponsored activities.

CONCLUSION
The quandary faced by state policymakers regarding the
treatment of e-cigarettes is multifaceted, whether related to
the possible health impacts and potential subsequent costs;
implementing regulations on access and use by minors; or
determining whether they could provide a viable revenue
stream, among other things.
Consumable product is defined as any nicotine liquid solution or
other material containing nicotine that is depleted as a vapor product is used.

Considerations regarding the treatment of e-cigarettes in the

broader policy domain could be reminiscent of the dynamics
surrounding the 1998 Tobacco Master Settlement Agreement (MSA), when 46 states and the District of Columbia
reached an agreement with the countrys four largest tobacco
companies to settle lawsuits seeking the recovery of billions
of dollars in costs associated with treating tobacco-related illnesses. Under the MSA, the tobacco companies agreed to pay
the states approximately $200 billion in payments over 25
years.
The MSA and the realizations leading up to it followed many years of consumers citing a lack of information, or access
to information, about the health risks tobacco cigarettes
pose. The science and technology available today make it
easier to ascertain the potential health risks associated with
e-cigarettes and other alternative nicotine or vapor products,
and to compare those risks with the risks posed by traditional tobacco products. Coupled with the ability to disseminate
findings to the public almost as soon as they become available, these advancements provide policymakers with more
reliable and timely information on which to base discussions
when considering regulations pertaining to e-cigarettes.
If e-cigarettes are found to be a safer alternative to tobacco
cigarettes or to be an effective cessation tool, states might
wish to consider how to encourage their use by existing
smokers. However, if these devices are found to pose the
same or greater risks as traditional tobacco, states might focus on limiting their availability and use, particularly among
youth. Contingent upon conclusive scientific findings, early
action against the harm that could be caused by e-cigarettes
could go a long way toward avoiding the widespread health
epidemic that led to the MSA for tobacco use. Beyond avoiding costly legal action, the outcome could be a healthier
populace with reduced healthcare costs for the states.
With the impending depletion of MSA payouts on the horizon and a decline in the number of Americans who use
tobacco products, replacing this revenue could pose a challenge. Coupled with falling tobacco revenues, states already
are struggling to keep pace with education and Medicaid
growth, while trying to address current and future transportation infrastructure and repairs, which no longer can rely on
motor fuel revenue and the Highway Trust Fund as a steady
source of funding.
Regardless of health implications, discussions among policymakers pertaining to taxation issues will be vigorous,
while the quest to remain tax neutral may not prove to
be a sustainable approach. The legislative approach to taxing the consumables of e-cigarettes closely parallels that of
an excise tax on tobacco and motor fuel, which applies only to users of the product without increasing taxes across the
Florida, Minnesota, Mississippi, and Texas each settled their cases separately and were not parties to the 1998 Tobacco Master
Settlement Agreement.

E-CIGARETTES IN THE SLC STATES 9

board. Although likely not a substantial source of revenue,

the expected growth of the e-cigarette market would have a
positive impact on this revenue stream.
As states continue to monitor trends in the use of e-cigarettes,
alongside the science, there are a number of factors lawmakers
may wish to consider when crafting potential regulations,
including, but not limited to, providing clear and concise
definitions for e-cigarettes and tobacco products; establishing

clear restrictions on the sale and use of e-cigarettes; enforcing

restrictions on the sale and use of e-cigarettes; implementing
procedures for the recycling or disposal of e-cigarettes and
related products; including e-cigarettes in smoke-free laws;
taxing e-cigarettes or its consumables and at what rate; and
allowing local ordinances to provide further restrictions on
e-cigarettes beyond state law. These and other issues related
to e-cigarettes are likely to remain part of the legislative
discussion for the foreseeable future.

Appendix A
Law

Relevant Statutes

Enacting Legislation

Code of Alabama (2014)

Ala. Code 28-11-2, 28-11-13, 28-11-14

House Bill 286 (2013)

Arkansas Code Annotated (2015)

A.C.A. 4-16-101, 5-27-233, 6-21-609

House Bill 1398 (2013), Senate Bill 953 (2013),

Senate Bill 1087 (2013)

Florida Statutes (2014)

Fla. Stat. 322.056, 569.14, 877.112

Senate Bill 224 (2014)

Official Code of Georgia Annotated (2014)

O.C.G.A. 16-12-170 through 16-12-175

House Bill 251 (2014)

Kentucky Revised Statutes (2014)

KRS 438.305, 438.310, 438.311, 438.313, 438.315,

438.325, 438.330, 438.335, 438.350

Senate Bill 109 (2014)

Louisiana Revised Statutes (2014)

R.S. 14:91.6, 14:91.8, 26:901, 26.902, 26:905, 26:909

through 26:911, 26:917, 26:932, 47:851

Senate Bill 12 (2014)

Mississippi Code Annotated (2014)

Miss. Code 97-32-51

House Bill 613 (2013)

Missouri Revised Statutes (2014)

Mo. Rev. Stat. 407.925, 407.926, 407.927, 407.929,

407.931, 407.933, 407.934

Senate Bill 841 (2014)

North Carolina General Statutes (2014)

N.C.G.S. 14-258.1, 14-313, 105-113.4, 105-113.35,

105-113.40A, 148-23.1

Senate Bill 530 (2013), House Bill 1050 (2014)

Oklahoma Statutes (2014)

O.S. 21-1241, 21-1242, 37-600.1 through 37-600.23

Senate Bill 1602 (2014)

South Carolina Code of Laws (2015)

S.C. Code 16-17-500 through 16-17-504

House Bill 3538 (2013)

Tennessee Code Annotated (2014)

T.C.A. 39-17-1501 through 39-17-1504, 39-171509, 39-17-1510

House Bill 501 (2011)

Virginia Statutes (2014)

Va. Code 18.2-371.2, 22.1-79.5, 22.1-279.6

House Bill 484 (2014), Senate Bill 96 (2014)

West Virginia Code (2014)

W. Va. Code 16-9A-2, through 16-9A-4, 16-9A-7,

16-9A-8

House Bill 4237 (2014)

Food Drug and Cosmetic Act

21 U.S.C. 301 et seq.

Family Smoking Prevention and Tobacco

Control Act

21 U.S.C. 387 387u

Note: The Texas Legislature did not meet in 2014; however, legislation currently is being considered during the 2015 session.
Disclaimer: Product depictions do not constitute an endorsement by The Council of State Governments or the Southern Legislative
Conference of the brands or products depicted.

10 E-CIGARETTES IN THE SLC STATES

Glossary
atomizer a metal component on an e-cigarette that uses heat to vaporize
the e-juice or other liquid substance; can be combined with a cartridge to form a
cartomizer
alternative nicotine product a noncombustible product containing nicotine that
is intended for human consumption, whether chewed, absorbed, dissolved, or ingested by any other means
bidi thin, hand-rolled cigarettes with tobacco rolled in a tendu or temburni leaf;
primarily imported to the United States from India and other Southeast Asian countries
cartridge a plastic tube-like reservoir with an absorbent filler material that holds
e-juice; can be combined with an atomizer to form a cartomizer
covered tobacco products term proposed to encompass any tobacco product
deemed to be subject to FDA regulation under the Food, Drug, and Cosmetic Act
drug-device combination product therapeutic and diagnostic products regulated
by the FDA that combine drugs, devices, and/or biological products
e-juice the liquid substance, which usually contains nicotine and flavoring, that is
vaporized when using an e-cigarette
electronic cigarette an electronic product or device that produces a vapor that delivers nicotine or other substances when inhaled from the device to simulate smoking,

Endnotes
1 More than a quarter-million youth who had never smoked a cigarette
used e-cigarettes in 2013, Centers for Disease Control and Prevention,
August 25, 2014, http://www.cdc.gov/media/releases/2014/p0825-e-cigarettes.
html (accessed December 12, 2014).
2 Teen prescription opioid abuse, cigarette, and alcohol use trends
down, National Institutes of Health, December 16, 2014, http://www.nih.
gov/news/health/dec2014/nida-16.htm (accessed December 16, 2014).
3 Johnston, L.D., OMalley, P.M., Meich, R.A., Bachman, J.G., &
Schulenberg, J.E., Monitoring the Future national survey results on drug
use: 1975-2014: Overview, key findings, on adolescent drug use, Ann
Arbor: Institute for Social Research, The University of Michigan, 2015
(accessed February 18, 2015).
4 Ibid.
5 Teen prescription opioid...
6More than 16 million children live in states where they can buy
e-cigarettes legally, Centers for Disease Control and Prevention,
December 11, 2014, http://www.cdc.gov/media/releases/2014/p1211-ecigarettes.html (accessed December 12, 2014).
7 Secondhand Smoke, U.S. Department of Health and Human Services,
http://betobaccofree.hhs.gov/health-effects/secondhand-smoke/index.html
(accessed December 12, 2014).
8Tobacco and Nicotine, U.S. Department of Health and Human
Services, http://betobaccofree.hhs.gov/about-tobacco/tobacco-and-nicotine/
index.html (accessed December 12, 2014).
9 Surgeon Generals Report on Tobacco has a New Target: E-Cigarettes,
TIME, January 17, 2014, http://time.com/1248/surgeon-generals-report-ontobacco-has-a-new-target-e-cigarettes/ (accessed February 20, 2015).
10 Summary of Results: Laboratory Analysis of Electronic Cigarettes
Conducted by FDA, U.S. Food and Drug Administration, http://www.fda.
gov/NewsEvents/PublicHealthFocus/ucm173146.htm (accessed December 12,
2014).

and is likely to be offered to or purchased by consumers as an electronic cigarette,

electronic cigar, electronic cigarillo, or electronic pipe
roll-your-own tobacco any tobacco product which, because of its appearance,
type, packaging, or labeling, is suitable for use and likely to be offered to, or purchased by, consumers as tobacco for making cigarettes (FD&C Act)
smokeless tobacco any tobacco product that consists of cut, ground, powered,
or leaf tobacco and that is intended to be placed in the oral or nasal cavity (FD&C
Act)
tobacco product any product made or derived from tobacco that is intended
for human consumption, including any component, part, or accessory of a tobacco
product (except for raw materials other than tobacco used in manufacturing a component, part, or accessory of a tobacco product); does not include a product that has
been classified as a drug, device, or drug-device combination (FD&C Act)
vape to inhale and exhale the vapor produced by an electronic cigarette or similar device (Oxford English Dictionary)
vapor product a noncombustible product that employs a heating element, battery, power source, electronic circuit, or other electronic chemical or mechanical
means, that can be used to produce vapor from nicotine in a solution or other form

11 21 U.S.C. 321 (rr) (1) (2012).

12 Issue Snapshot on Deeming Regulating Additional Tobacco
Products, U.S. Food and Drug Administration, http://www.fda.gov/
downloads/TobaccoProducts/NewsEvents/UCM397724.pdf (accessed January
20, 2015).
13 21 U.S.C. 387a(b) (2012).
14 Deeming Tobacco Products to be Subject to the Federal Food, Drug,
and Cosmetic Act, as Amended by the Family Smoking, Prevention
and Tobacco Control Act; Regulations on the Sale and Distribution
of Tobacco Products and Required Warning Statements for Tobacco
Products (Proposed Rule), Federal Register 79:80 (April 25, 2014), p.
23142.
15 Oxford Dictionaries word of the year is vape, The Washington
Post, November 18, 2014, http://www.washingtonpost.com/news/morningmix/wp/2014/11/18/oxford-dictionarys-word-of-the-year-is-vape/ (accessed
December 23, 2014).
16 State Cigarette Excise Tax Rates and Rankings, Campaign for
Tobacco-Free Kids, February 5, 2015, http://www.tobaccofreekids.org/
research/factsheets/pdf/0097.pdf (accessed February 9, 2015).
17 A Look Back at Tobacco Legislation, CSP Tobacco E-News,
December 10, 2014, http://www.cspnet.com/category-news/tobacco/articles/
look-back-tobacco-legislation-2014 (accessed December 23, 2014).
18 E-cigarettes, Minnesota Revenue, http://www.revenue.state.mn.us/
businesses/tobacco/Pages/e-Cig.aspx (accessed December 23, 2014).
19 Minn. Stat. 297F.05, 297F.25 (2013).
20 N.C. Gen. State 105-113.5, 105-113.35(a) (2014).
21 General Assembly of North Carolina, Fiscal Research Division,
Legislative Fiscal Note, House Bill 1050 (Second Edition), May 16, 2014.
22 State Laws Prohibiting Sales to Minors and Indoor Use of Electronic
Nicotine Delivery Systems United States, November 2014, Morbidity
and Mortality Weekly Report, Centers for Disease Control and
Prevention, December 12, 2014, http://www.cdc.gov/mmwr/preview/
mmwrhtml/mm6349a1.htm (accessed January 20, 2015).

E-CIGARETTES IN THE SLC STATES 11

THE SOUTHERN OFFICE OF THE COUNCIL OF STATE GOVERNMENTS

REGIONAL VIEW NATIONAL REACH

his report was prepared by Policy Analyst Lauren

Greer for the Human Services and Public Safety
Committee of the Southern Legislative Conference
(SLC) of The Council of State Governments (CSG)
under the chairmanship of Representative Joni Jenkins of
Kentucky. This report reflects the body of policy research
made available to appointed and elected officials by the
Southern Office.

The Southern Office of The Council of State Governments,

located in Atlanta, Georgia, fosters and encourages intergovernmental cooperation among its 15 member states. In
large measure, this is achieved through the ongoing work
of the standing committees of its Southern Legislative Conference and supporting groups. Through member outreach
in state capitols, policy research, international member delegations, staff exchange programs, meetings and fly-ins,

staff support state policymakers and legislative staff in their

work to build a stronger region.
Founded in 1947, the SLC is a member-driven organization
and the largest of four regional legislative groups operating
under CSG and comprises the states of Alabama, Arkansas,
Florida, Georgia, Kentucky, Louisiana, Mississippi, Missouri,
North Carolina, Oklahoma, South Carolina, Tennessee, Texas,
Virginia and West Virginia.
The SLCs six standing committees provide a forum which
allows policymakers to share knowledge in their area of expertise with colleagues from across the South. By working
together within the SLC and participating on its committees, Southern state legislative leaders are able to speak in
a distinctive, unified voice while addressing issues that affect their states and the entire region.