Closed System Tax Law

Closed system devices (also known as Nicotine Disposables, including brands such as Mr. Fog, Esco Bars, Hydes, etc.) are subject to an excise tax collected at the wholesale level. This law applies only to shops selling Disposable Nicotine Devices. The tax imposed on closed system devices is 15% of the wholesale product price. Wholesalers, such as HW Wholesale, Inc., will collect these closed system taxes from shops purchasing Closed Systems and remit those taxes to the state on their behalf. If you are in a state like Indiana that has closed system taxes and your current supplier is not collecting and paying these taxes for you, those products would be considered illegally sold in the eyes of the state.

NOTE: Indiana and Kentucky Closed System Taxes will now generate as a LINE ITEM at the bottom of HW Wholesale INVOICES. Taxes are no longer 'baked' into the unit prices listed.

Open System Tax Law

Open System devices (including refillable mods, pod systems, tank systems, etc.) are subject to taxes collected at the retail level. Taxable products include pod systems, tank systems, coils, mods, vape juice, and all e-liquids, including 0mg vape juice. Essentially, any product associated with vaping e-liquid is to be taxed, including hardware and hardware accessories—not just vape juices. Shops are required to collect 15% (open vape tax) along with 7% (sales tax) at the point of sale.

Our Commitment to Compliance

Indiana laws and regulations are always refining and updating their rules regarding the vaping industry, and HW Wholesale, Inc. is committed to providing accurate and legal information to our valued customers as new laws and restrictions occur. If you have any concerns or questions, please feel free to reach out to us for clarification by contacting us at 317.429.9806 or emailing our office at sales@hwwholesaleinc.com.