New Jersey recently passed legislation imposing an excise tax on sales of liquid nicotine. The new law will be effective as of October 1, 2018.

The new legislation imposes a tax of $0.10 per fluid milliliter tax related to sales of liquid nicotine.   “Liquid nicotine” is defined as “any solution containing nicotine that is designed or sold for use with an electronic smoking device,” which is in turn defined as “a lighted, noncombustible device that employs a mechanical heating element, battery, or circuit, regardless of shape or size, to produce aerosolized or vaporized nicotine for inhalation into the body of a person, including but not limited to a device that is manufactured, distributed, marketed, or sold as an e-cigarette, e-cigar, e-pipe, e- hookah, vape pen, or any other similar product with any other product name or descriptor.”

The tax will be typically imposed at the wholesaler/distributor level, unless the retailer or consumer receives liquid nicotine upon which the tax has not been paid. In such circumstances, the retailer or consumer will be responsible for paying the tax.