SPOKANE, Wash. — Washington state will implement a 95% excise tax on all tobacco and nicotine products in 2026, creating significant financial challenges for local vape shops and expected price hikes for consumers.
Senate Bill 5814 originally targeted traditional tobacco products, but the Department of Revenue announced in November that the tax scope would expand to include any product containing nicotine, including synthetic tobacco used in vaping products.
Michael Blanton, owner of Lilac City Vapor in Spokane, faces substantial costs as he prepares for the tax implementation.
He took over the business in May of 2025.
“We have over $100,000 in inventory items. Imagine paying 95% of that to continue staying in business,” Blanton said.
The tax expansion caught many business owners off guard.
“It was only for tobacco products, which were originally for, the pouches, like ZYN pouches, commonly known for that because they don’t have a tax,” Blanton said.
The new tax comes on top of existing volume taxes that vape shops already pay, creating what Blanton calls a double taxation situation.
“We’ve already had the ML tax already baked in our price, we have to now add the 95% tax inside the price again. So that raises the price up,” Blanton said.
Price increases will be substantial for consumers.
For example, the MNKE Bars vape, one of Lilac City Vapor’s most popular products, currently costs $23.50 but will increase to approximately $34 in the new year —- a 46% price jump.
Within Senate Bill 5814, there are several different excise taxes on goods and services.
The tobacco tax alone is expected to bring in more than $32 million dollars in 2026.
Supporters argue the tax serves dual purposes: generating state revenue and reducing tobacco and nicotine addiction rates.
Josh Pierce, program manager for the Healthy Living program, advocates against vaping and smoking.
“If the community is going to reduce the utilization of vaping and smoking, those are positive things are going to impact us. And there’s also less utilization — long term — on the medical system,” Pierce said.
However, Blanton contends the tax unfairly targets local businesses and plans to challenge its implementation. He has already begun lobbying efforts in Olympia to amend the legislation.
“We’re putting pressure on the Department of Revenue, putting pressure on the attorney general. And it’s because it’s double taxation,” Blanton said.
Local vape shops are reducing floor stock in preparation for the tax implementation, anticipating significant impacts on their business operations and customer base when the new rates take effect in 2026.
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