Vape Shop Proliferation and Noncompliance in Pennsylvania: A Pre- and Post-tax Analysis

The growing use of electronic nicotine delivery systems (ENDS) among adolescents is a public health concern. Taxation of these products is a viable approach to reduce ENDS use, particularly among adolescents. Opponents of taxation posit that it puts specialty retailers (ie, vape shops) out of business, thereby reducing availability of ENDS for adult smokers seeking harm reduction. Pennsylvania enacted substantial ENDS taxes in October 2016. This study sought to examine (1) the prevalence of Pennsylvania vape shops before and after ENDS taxes were enacted and (2) ENDS retail licensing compliance among vape shops.

We employed standardized searches for vape shops in Pennsylvania on the Yelp business-listing platform a month prior to and for 18 consecutive months following the imposition of ENDS taxes. We then compared listings to a public database of ENDS-related retail licenses to determine compliance status.

The number of listed vape shops increased in a linear fashion by a magnitude of 23%. In addition, when we compared a final listing of retailers to data from the state tax authority, we found roughly a quarter (22%-29%) of vape shops to be noncompliant with maintaining a valid ENDS retail license.

Overall, ENDS taxation in Pennsylvania has not appeared to reduce prevalence of vape shops as anticipated. However, stricter enforcement of the tax law is necessary to ensure compliance among retailers. These findings have implications for implementation and enforcement of ENDS tax policy nationwide, including states that currently lack such policies.