The Commonwealth Court has made their decision: Kingdom Vapor Emerges Victorious

Jun 22nd 2018

630 days or 1 year, 8 months, and 21 days: This is the duration of time that it has taken to Fight and WIN in Pennsylvania. What have small businesses and retail customers across Pennsylvania won as of today, June 22nd, 2018? 40% less tax on many Vapor Products.

Unfortunately, in June of 2016 during a heated budget battle in Pennsylvania, the Vaping Industry came under attack. Vaping was labeled by the State of Pennsylvania as a "Tobacco" product and ultimately handed a 40% tax on E-Liquid and Hardware.

The letter of the law was unfortunately very tight when it came to E-Liquid and it's taxable standing; however, Hardware was very cut and dry requiring that to be taxable the product "must contain a heating element and battery, or circuit". Tax laws must be strictly construed, meaning no room for interpretation.

As time came closer to the October 1st enactment date of the Tobacco Products Tax Act or TPTA, numerous Vape Shops and Kingdom Vapor Wholesale had been bombarding the PA Department of Revenue with questions regarding Hardware Categories and whether these Categories and Types would be taxed. In a decision which seems to have been made out of frustration and lack of product knowledge, the DOR choose to tax all hardware at 40%, essentially smearing the Strictly Construed definition of the TPTA into a state of Gray.

As an answer, the PA DOR released many updates on their interpretation of taxable status of Hardware Components. At this time the PA DOR began using the term "Integral" to provide reason behind their expanded list of taxable items; however, Integral does not appear in the original TPTA law when discussing Hardware. This is where Pennsylvania shop owners and the public became burdened and wrongfully taxed.

Kingdom Vapor Wholesale, being a PA based Hardware and E-liquid Distribution Company working in the Industry since 2013, realized that the PA DOR had in fact wrongfully interpreted the TPTA law of 2016, and approached a local law firm. Through meeting with Lindsay Law Firm of Butler Pennsylvania, and getting their interpretation of the TPTA 2016 law, it was agreed that the PA DOR was wrongfully taxing Businesses in PA as well as PA consumers of these products and Suit was filed on December 20th, 2016

Over the next year there were numerous heated Question and Responses back and forth between Kingdom Vapor and PA DOR Attorneys. This ultimately led to Kingdom Vapor's Lawsuit being moved from State Court to Federal Court, only to be kicked back down to Pennsylvania State Court. Kingdom Vapor's first court appearance was slated for late December of 2017 but was pushed back to January 10, 2018.

After the January 10th hearing, the request for preliminary injunction was granted in part. This prevented the DOR from pursuing administrative and criminal penalties during the pendency of this litigation if Kingdom Vapor continues to file its monthly reports and pay the 40% tax on the same items on which it has been collecting and paying the tax. A final decision on what products would remain taxable would ultimately be made in a separate hearing scheduled in April.

On April 11th, Kingdom Vapor had their second court date in front of 7 judges. Closing arguments were heard from both sides. After hearing closing statements, the Judges were able to ask questions of both parties, focusing most of their attention on PA DOR Attorney Gallagher. Questions came at the DOR hot and heavy, leaving Kingdom Vapor Wholesale with a feeling of success.

Today (6/22/2018) that feeling of success is a reality. Through litigation against the State of Pennsylvania, Kingdom Vapor has WON. This win will drastically help Pennsylvanian Retailers better compete on Hardware against bordering states and online retailers who haven't been affected by the TPTA 40% tax. Through the ruling provided by these Honorable Judges, only Complete ready to use Kits will be taxed at 40%, as is written in the letter of the law.

This has been a long and arduous roller coaster for the Ownership and Team here at Kingdom Vapor Wholesale. Kingdom Vapor would like to extend a very sincere thanks to all Pennsylvania Retailers who have shown support over the last 18 months. The support of out of state Retailers has also been extremely appreciated as well and is a testament to the Community that exists in the Vaping Industry.

Kingdom Vapor Wholesale would also like to thank Lindsay Law Firm for providing exceptional Legal Support, and Specifically Andrew Salemme for his dedication to their case. Also, thanks to East Coast Vapor for their related lawsuit. Thanks to the Honorable Mary Hannah Leavitt, President Judge; Honorable Renee Cohn Jubelirer, Judge; Honorable Robert Simpson, Judge; Honorable Patricia A. McCullough, Judge; Honorable Michael H. Wojcik, Judge; Honorable Christine Fiazzano Cannon, Judge; Honorable Ellen Ceisler, Judge

To read the court's full decision, click the link below. 
Kingdom Vapor v. Pennsylvania Department of Revenue