Shaheen, Blumenthal, and Reed Spearhead Effort to Close Tax Loophole on Advertising for E-cigarette & Tobacco Companies
WASHINGTON, DC -- Today, U.S. Senators Jeanne Shaheen (D-NH), Richard Blumenthal (D-CT), and Jack Reed (D-RI) reintroduced the No Tax Subsidies for E-Cigarette and Tobacco Ads Act, which would crack down on e-cigarette companies and close a tax loophole that allows manufacturers to claim federal tax deductions for the cost of advertising for e-cigarettes and tobacco products.
In November 2022, the Food and Drug Administration (FDA) and U.S. Centers for Disease Control and Prevention (CDC) released federal data showing that over 3 million middle and high school students had used a tobacco product during the past 30 days. Over 2.5 million middle and high school students, more than one in four, use e-cigarettes daily. This comes as youth e-cigarette use rose 1,800% from 2011 to 2019. More than 30% of teens who start using e-cigarettes begin smoking traditional tobacco products within six months. More than a quarter of current youth e-cigarette users use and e-cigarette product every day. Over 85 percent of user use fruit flavors. Amongst students surveyed, those who use social media found that 73.5% of students have seen e-cigarette related content.
“E-cigarettes are fueling a public health crisis – particularly among teenagers. E-cigarette and Big Tobacco companies must be held responsible for deliberately advertising these dangerous products to youth,” said Senator Shaheen. “It’s outrageous that a tax loophole allows companies to write off the costs of their ads, having taxpayers foot the bill and subsidize the advertising of harmful products. That’s why I’m reintroducing legislation to close this loophole and hold e-cigarette companies accountable for their harmful marketing practices.”
“Old regulatory loopholes are helping Big Tobacco addict more Americans to lethal products,” said Senator Blumenthal. “This bill will close a gaping tax loophole, putting an end to Big Tobacco’s tax write-offs of dangerous ads and preventing young people from starting up a deadly addiction.”
“Taxpayers shouldn’t be on the hook for helping e-cigarette companies hook kids on harmful chemicals,” said Senator Reed. “It is irresponsible to subsidize Big Tobacco.”
Matthew L. Myers, President of the Campaign for Tobacco-Free Kids stated: “Tobacco products cause addiction and harm health. Tobacco companies should not receive a tax break for advertising them.”
Television and radio advertising for traditional tobacco products have been banned under federal law, and certain other forms of Big Tobacco advertising are restricted under the 1998 Tobacco Master Settlement Agreement. However, none of these restrictions apply to e-cigarettes. While some television outlets have started pulling e-cigarette ads from the air in response to the ongoing youth vaping crisis, the ads are still being run by other outlets. To ensure parity between e-cigarettes and traditional tobacco, the Shaheen and Blumenthal bill also bars tax deductions for advertising expenses related to tobacco cigarettes, cigars, snuff, chewing tobacco, pipe tobacco, and roll-your-own tobacco.
The bill is also cosponsored by U.S. Senators Sherrod Brown (D-OH), Dick Durbin (D-IL), Chris Van Hollen (D-MD), and Jeff Merkley (D-OR).