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Tennessee to Impose 10% Tax on E-Cigarettes Starting July; Retailers Question Enforcement Clarity

Jul.09.2025
Tennessee to Impose 10% Tax on E-Cigarettes Starting July; Retailers Question Enforcement Clarity
A new law in Tennessee aimed at curbing youth vaping took effect in July, imposing a 10% excise tax and requiring e-cigarette products to be registered with the state. However, industry insiders say enforcement has been chaotic and regulations unclear, leaving small and mid-sized retailers confused.

【2Firsts News Flash】According to NewsChannel9, a new law that went into effect this month in Tennessee imposes more restrictions and taxes on the sale of e-cigarettes and vaping products. State lawmakers say the new law is designed to reduce opportunities for youth to access e-cigarette products. However, some industry professionals in the e-cigarette sector have expressed confusion over the law.

 

Under the new regulations, certain e-cigarette products will be subject to a new 10% tax rate. The law also establishes a deadline of August 1st for implementing additional enforcement and tracking measures. Retailers will be required to only sell e-cigarette products that are on an approved list by the state government.

 

There are still questions as to when and where businesses can access this list.

 

The president of the Tennessee Smoke Free Association, Daniel Gillis, stated, "This law has not addressed the problem of youth vaping e-cigarettes at all, it is just disguised as a 'youth e-cigarette prevention act'.

 

Gillis stated that the law will be implemented in three stages: the first stage involves a 10% tax starting this month, the second stage involves product registration beginning in 2026, and the third stage involves full enforcement starting in 2027.

 

"They are imposing taxes on a product that they themselves do not understand."

 

Although shop owners have been asked to adhere to the new regulations, Gilles said that many people do not truly understand the content of the rules, and the guidance provided by the state government is also very limited.

 

"Many stores, especially those not affiliated with the Tennessee Smoke Free Association, are now in the dark about what exactly this bill entails."

 

The bill's sponsor, State Representative David Hawk, stated:

 

"Starting from July 1st, the Tennessee Alcoholic Beverage Commission will be responsible for overseeing e-cigarette shops to ensure compliance with the new laws. Additionally, the Tennessee Department of Revenue will ultimately be in charge of creating a register of e-cigarette products. Therefore, these two state agencies are the primary enforcement bodies."

 

However, Gillis pointed out that the biggest issue in law enforcement lies in the cross-border circulation of products and the fact that some suppliers still do not have licenses.

 

"I believe law enforcement will be a major issue, and the market competition during the period before distributors obtain sales permits will be extremely unfair. I think we should establish an e-cigarette sales permit system first, clarify who is selling, and then control distribution."

 

Currently, e-cigarette stores must ensure that their suppliers have obtained licenses and that the products they sell can be included in the state government's registry in the future.

 

Gillis stated that he will continue to work with the state government to seek clearer guidance, but also warned that this confusion and delay could harm small businesses rather than improve public health.

 

References:
[1] Tennessee vape law sparks confusion with new taxes and unclear product regulations
Also Read:
[1] Tennessee Vape Registry Bill: 10% Wholesale Tax and Ban on E-Liquids from "Hostile Nations"
[2] Tax Measures Proposed in Tennessee to Regulate E-Cigarette Market
[3] Tennessee Senate Passes Bill Imposing New Tax on E-Cigarettes

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