Measure 108: Oregonians decide whether to tax e-cigarettes and increase other tobacco taxes

By Kristian Foden-Vencil (OPB)
Oct. 14, 2020 1 p.m.

The basics

Measure 108 would impose a new tax on e-cigarettes and add $2 to the price of a pack of cigarettes.


What it does

If passed, Measure 108 would increase Oregon’s cigarette tax $2 a pack — from $1.33 to $3.33.

It would also start a completely new tax on e-cigarettes — at the rate of 65% of the wholesale sales price. It would also increase taxes on premium cigars.

Related: OPB’s 2020 election coverage, ballot guide and results

Supporters say such increases bring Oregon’s cigarette taxes in line with Washington and California. That means it would likely stop Washingtonians from driving across the state boundary to buy cheaper cigarettes.

If passed, the new taxes would start Jan. 1, 2021.

What it doesn’t do

The new e-cigarette tax would not include products that have been approved by the U.S. Food and Drug Administration to help people quit smoking. It also does not include e-cigarettes sold for the purpose of vaporizing marijuana.

Who is it for?

Ninety percent of tax revenues would go to the Oregon Health Authority to pay for the treatment of sick people, especially those suffering from mental illnesses.

The remaining 10% would go to tribal health providers and other culturally specific health programs for tobacco cessation efforts. It’s supported by many organizations including the American Cancer Society and the American Heart Association.

The state tried to ban flavored vape last year. The effort failed, but it highlighted the fact that e-cigarettes aren't subject to state taxes. Measure 108 would change that.

The state tried to ban flavored vape last year. The effort failed, but it highlighted the fact that e-cigarettes aren't subject to state taxes. Measure 108 would change that.

Kristian Foden-Vencil


Who is against it?

Most smokers and people who operate businesses that sell vapes are against the taxes. Republicans in the state legislature voted against the idea.

The group Taxpayers Association of Oregon is urging voters to reject it saying a tax hike would hurt low income Oregonians because they’re more likely to smoke. The group also says it disproportionately hurts the small local shops that sell tobacco products.

Opponents warn against raising taxes during a global pandemic and say revenue from such hikes are unstable. So called ‘sin taxes’ tend to generate more revenue to start with, but that income gradually declines as smokers either give up or smoke less because of the increased cost.

What will it cost me?

Smokers will have to pay an additional $2 per pack of cigarettes.

People who vape will also have to pay taxes on their e-cigarettes for the first time.

The tax will not cost non-smokers anything.

The state estimates the tax will generate about $160 million per year.

Why are we talking about this now?

Last year, Oregon politicians tried to impose a ban on flavored vape products, after some customers started falling ill with severe lung problems.

The ban was overturned. But it highlighted the different ways cigarettes and vaping products are treated for taxes in Oregon.

Also, Oregon has not increased tobacco taxes in 18 years. So, it has one of the lowest rates in the country.

The last time the state tried to increase tobacco taxes, cigarette companies spent millions to kill the idea. This time, those companies have remained largely silent while several local health systems have generated nearly $9 million in support.

Oregon Gov. Kate Brown introduced the tax idea during the last legislative session.

It was referred to the ballot along a largely party line vote. Democrats voted in favor, Republicans against.

If passed, Measure 108 would boost Oregon’s tobacco tax rate from 32nd highest in the country, to sixth highest.

This is a link to OPB's election coverage, ballot guide and results.