IN Tax Laws
Indiana has implemented several new tax laws regarding vaping products as of July 1, 2022 – the Closed System Tax Law and the Open System Tax Law. The following is a summary of these and how they affect Indiana businesses.
Closed System Tax Law: Closed system device (AKA Nicotine Disposable: Brands such as Mr. Fog, Esco Bars, Hydes etc.) taxes will be collected at the Wholesale Level. This sales tax law affects ONLY tax shops selling Disposable Nicotine Devices. The tax imposed on closed system devices is 15% of the Wholesale product price.
NOTE: Indiana and Kentucky Closed System Taxes will now generate as a LINE ITEM at the bottom of HWW INVOICES. Taxes are no longer 'baked' into the unit prices listed.
Open System Tax Law: Open System device (AKA refillable mods, pod and tank systems etc.) taxes will be collected at the retail level. Products included on the list of taxable products are 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. This includes hardware and hardware accessories - not just vape juices. Shops are to collect 15% (open vape tax) along with 7% (sales tax) at the point of sale.
Indiana laws and regulations are always refining and updating their rules and regulations 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 any clarification needed by contacting us at either 317.429.9806 or emailing our office at firstname.lastname@example.org.