E-Cigarettes: Regulation and Taxation

E-cigarettes are a nicotine delivery system. They heat liquid containing nicotine and flavorings into a vapor by passing it over a small electronic battery. According to The Wall Street Journal, sales grew from $2 million in 2009 to $722 million in 2013.

The U.S. Food and Drug Administration in April 2014 released proposed regulations on e-cigarettes. The FDA is using its statutory “deeming” authority to issue regulations on additional tobacco products, including electronic cigarettes, cigars, pipe tobacco, hookah tobacco, and novel products such as nicotine gels and dissolvables. The new regulations also would include e-cigarette cartridges. The original comment period, set to end July 9, 2014, was extended 30 days to Aug. 8, 2014. The FDA declined to extend the comment period again. It has not issued final regulations.
Absent FDA regulations, regulation of e-cigaretttes is left in the hands of states and localities.