SPOKANE, Wash. — Washington vape shops are struggling after the state imposed a 95% wholesale tax on nicotine products that took effect January 1, 2026, with lobbyists racing against the clock as three days remain in the legislative session.
Michael Blanton, owner of Lilac City Vapor in Spokane, said the tax has devastated his business.
“Whatever we made last year was basically a loss because of the tax,” Blanton said.
The tax was added on top of existing taxes vape shops already paid and slowed down their ordering process. Many customers are now driving to Idaho instead.
“They’re going to Idaho because we didn’t have the product. So we’re just going to go, you know, cross the border,” Blanton said.
The impact extends beyond vape-only shops. The manager of Hamilton Market said nicotine product sales have dropped dramatically in 2026 as many people head to Idaho. However, convenience stores have other revenue sources like chips, candy and gas, while vape-only shops are taking the tax harder.
Blanton was forced to make difficult staffing decisions.
“We unfortunately had to lay a couple people off because it was either pay the employees or pay the tax and we have to stay in business. So I had to pay the tax,” he said.
Lawmakers say the tax keeps vape products away from minors and deters nicotine addiction. But businesses argue they follow strict age requirements and that the taxes make vaping more expensive than harmful tobacco alternatives.
Sara Stewart, a lobbyist for the Washington Smoke Free Association, said the tax is pushing people toward more dangerous options.
“You’re pushing people back to smoking cigarettes. You’re pushing a really good industry out of the state and hurting small businesses that mom and pop shops who are trying to do the right thing,” Stewart said.
Stewart is trying to repeal or amend the 95% tax in Olympia, but every proposed amendment has been struck down so far.
The next step would be challenging the constitutionality of the tax in court.
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