Tax Commission, DHHS: Utah e‑cigarette registry implementation slowed by lawsuit; $120,000 in registry fees collected

The Utah State Tax Commission and the Department of Health and Human Services told the Revenue and Taxation Interim Committee on June 18 that the electronic cigarette product registry created by 2024 legislation had a slow restart after litigation and currently accounts for approximately $120,000 in registration‑fee revenue.

Jason Gardner, deputy executive director of the Utah State Tax Commission, described the registry process: manufacturers submit an application and a $1,000 application fee to the tax commission; the commission transmits the application to DHHS for public‑health review (including verification of PMTA status), and DHHS returns a determination the commission posts on the public registry. "We simply accept all the information and transmit it over to Department of Health and Human Services who their experts then review that information," Gardner said.

Implementation was interrupted by a lawsuit filed in December 2024 by the Utah Vapor Business Association that prompted a temporary restraining order on enforcement and product registration; the restraining order was lifted in March 2025 and registration resumed, but commission staff said product submissions have been slower since. The commission has maintained two public lists: certified products and recently removed products so retailers can check compliance.

Financial and enforcement points presented to the committee included:

- Registration fees collected since launch: about $120,000 (application fee $1,000 per product/manufacturer submission).
- E‑cigarette excise tax revenue: commission projection about $8,000,000 for fiscal year 2025 (first‑quarter receipts suggested a year‑over‑year drop in early quarters, roughly 30% in one quarter compared to year earlier).
- Implementation expenditures: the tax commission reported approximately $65,000 spent on registry setup (partly exceeding initial fiscal note; remainder covered internally); DHHS reported approximately $200,000 appropriated and used largely for staff and legal costs related to implementation and litigation.
- Enforcement seizures: the State Bureau of Investigation and local partners reported 22 retail investigations with 10 search warrants and more than 12,000 products seized during enforcement activity described by DHHS.

DHHS staff and tax commission staff recommended several clarifications for statute and rulemaking, including whether device components should be registered separately (removing devices would reduce fee revenue), clearer treatment of products such as CBD or "wellness vapes" that do not qualify for FDA premarket pathways, potential waste‑disposal fees for confiscated products, and additional permit or retail‑training requirements. DHHS also identified challenges distinguishing menthol versus mint flavors on product labels.

Both agencies said the registry is an interagency effort that has required operational adjustments, and they offered to continue coordinating with local health departments, law enforcement and retailers to improve compliance and clarify statutory language.