A lot of vapers in Alabama will face more prices as early as Wednesday as a patchwork of local taxes start to take effect.
Local municipalities have rushed to approve vape taxes before a state law takes effect that stops them from passing new taxes on vaping commodities after October 1.
The Alabama State Legislature passed a bill in early May that will impose a $0.10 per ml wholesale tax on e-liquid starting in October 2026.
That law also bans local governments from passing their own e-liquid taxes after October 1 2025.
“Notwithstanding any other provision of this act, an act of the Legislature or an ordinance or resolution by a taxing body enacted or passed on or before October 1, 2025, providing or imposing for the levy of a license fee or local tax shall remain operative; however, no extra local tax or license fee may be imposed on the transaction of consumable vapor products after the effective date of this act,” says HB 529.
As local officials got to know of the time limit, towns and cities across the state have been in a race to approve their own taxes before the cutoff date.
A portion of the state tax (25%), when it starts, will go to counties and municipalities based on their population.
But several city leaders have decided that their share of that pie may be much smaller than what they could make by imposing their own taxes.
Counties and cities that assess their own tax will not get any of the state tax revenue, but small business owners will have to pay both taxes and deal with the taxing authorities. And the new excise costs will be added to the costs consumers pay.
Just like with any local tax, many consumers will avoid it by traveling to businesses in closeby jurisdictions without a tax, or by buying online. In either case, local businesses will get affected the most.
Some cities have approved their own $0.10/mL to prices next year, which will hurt both local retailers and consumers.
Although we don’t have a comprehensive list, some regions that already have adopted new local taxes are Decatur, Decatur, Fairhope, Dothan, Muscle Shoals, Gulf Shores, Spanish Fort, and Orange Beach.
The city council in Mobile, the 2nd-largest city in Alabama, will debate a proposed tax ordinance today, according to NBC 15 News.
Six U.S. states, including Alabama, have passed laws to make or increase vape taxes so far this year.