June 27, 2022
In the 2021 legislative session, the California Medical Association (CMA) sponsored a bill to increase the tax on e-cigarette and vaping products to more closely mirror the taxes on other tobacco products. The bill (SB 395) was signed into law and will take effect on July 1, 2022.
CMA has worked tirelessly for decades to decrease the harmful impacts of tobacco. With the successful passage of the Proposition 56 tobacco tax in 2016, the state increased the taxation on traditional cigarettes, but inadvertently created a financial incentive for traditional smokers to switch to vaping products that were taxed at a lower level.
Authored by Senator Ann Caballero, SB 395 imposes a 12.5% tax on e-cigarettes to reduce their use and generate revenue for important health care workforce initiatives. Most significantly, the majority of the ongoing funding—an estimated $30 million each year—will be used to support physician workforce programs, such as the CalHealthCares physician loan repayment program, which creates incentives for physicians to treat more low-income patients and provide care to underserved communities.