East Coast Vapor LLC v. Commonwealth of Pennsylvania

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April 24, 2026 Get Citation Alerts Download PDF Add Note

East Coast Vapor LLC v. Commonwealth of Pennsylvania

Commonwealth Court of Pennsylvania

• Citations: None known
• Docket Number: 487 F.R. 2022

• Judges: Wojcik

• Opinion

• Authorities (7)

• Cited By (0)

• Summaries (0)

• Similar Cases (35.8K)

• PDF

Lead Opinion

by Wojcik

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

East Coast Vapor LLC, :
:
Petitioner :
:
v. : No. 487 F.R. 2022
: Argued: November 5, 2025
Commonwealth of Pennsylvania, :
:
Respondent :

BEFORE: HONORABLE RENÉE COHN JUBELIRER, President Judge
HONORABLE PATRICIA A. McCULLOUGH, Judge
HONORABLE ANNE E. COVEY, Judge
HONORABLE MICHAEL H. WOJCIK, Judge
HONORABLE LORI A. DUMAS, Judge
HONORABLE STACY WALLACE, Judge
HONORABLE MATTHEW S. WOLF, Judge

OPINION BY JUDGE WOJCIK FILED: April 24, 2026

East Coast Vapor LLC (East Coast) petitions for review from an order
of the Board of Finance and Revenue (Board) denying its petition for review of tax
assessments under the Tobacco Products Tax Act (TPTA or Act).1 Specifically, East
Coast asserts it was taxed in error on sales of custom vaping blend e-liquids. For the
reasons that follow, we reverse.
East Coast currently operates a retail vaping store located in Harrisburg,
Pennsylvania where it produces custom vaporizer blends (or “custom blend e-

1
Act of March 4, 1971, P.L. 6, added by Section 18 of the Act of July 13, 2016, P.L.
526, 72 P.S. §§ 8201–A–8234–A. The General Assembly enacted the TPTA in 2016, creating a
new Article XII-a within the Tax Reform Code of 1971 (Tax Reform Code), Act of March 4, 1971,
P.L. 6, as amended, 72 P.S. §§7101-10004.
liquid”) for sale to customers. Joint Stipulation, ¶1. On November 1, 2021, the
Department of Revenue (Department) mailed six assessments for the period October
1, 2018, through February 28, 2019, and August 1, 2021, through August 31, 2021,
assessing “Other Tobacco Products [(OTP)]” tax, penalties and interest under the
Act. Thereafter, on December 7, 2021, the Department mailed an assessment for the
period covering September 1, 2021, through September 30, 2021, also assessing
OTP taxes penalties and interest under the Act.
East Coast filed an appeal of the assessments with the Board of Appeals
(BOA), arguing that the assessments were improper and violated the plain language
of the TPTA. East Coast further argued that the assessments were improperly
calculated as they were based on the sales price of the custom blend e-liquids sold
to customers rather than the individual purchase price of the ingredients used to make
the e-liquids.2 East Coast maintained that this contradicted the Department’s website
which indicates that the OTP tax is to be imposed on the purchase price of the
individual ingredients used to make the custom blend.3 Finally, East Coast argued
that the assessments violated the Pennsylvania and United States Constitutions.

2
E-liquid consists of vegetable glycerin, propylene glycol, water, and artificial flavoring
and ordinarily contains nicotine. Joint Stipulation, ¶6. East Coast purchases vegetable glycerin,
propylene glycol, water, artificial flavoring, and nicotine to be mixed in-store at its Harrisburg
location for the creation of custom blend e-liquid for in-store consumers. Id., ¶7.

3
In this regard, Paragraph 12 of the Joint Stipulation provides:

The [Department’s] “Customer Support” website sets forth that the
[TPTA] tax for custom vaporizer blends is calculated using the
purchase price of the individual ingredients, i.e., water, artificial
flavoring, vegetable glycerin and propylene glycol. https://revenue-
pa.custhelp.com/app/answers/detail/a_id/3660 (Q: “If I do custom
vaporizer blends for my customers in store, how do I calculate the
tax?” A: “The tax is on the purchase price of the ingredients.”); (see
(Footnote continued on next page…)
2
In a May 19, 2022 decision, the BOA denied the petition. The BOA
found East Coast’s arguments to be without merit, noting that the custom blends
constitute a taxable liquid or substance placed in or sold for use in an electronic
cigarette per Section 1201-A of the TPTA, 72 P.S. §8201-A. The BOA further found
that per Section 1202-A(b) of the TPTA, 72 P.S. §72 P.S. §8202-A(b), if no OTP
tax was collected by the seller from the retailer, the tax is imposed on the retailer at
the time of the purchase. As to East Coast’s constitutionality arguments, the BOA
stated that it did not have jurisdiction to review such arguments.
On further appeal, the Board concluded that East Coast had not
established that the transactions were exempt from OTP tax. To the extent that East
Coast argued that the assessments were invalid and violative of the plain language
of the TPTA for assessing tax on the sale of custom blend e-liquid to consumers, the
Board found the argument to be meritless. Section 1202-A(b) of the TPTA states
that for a retailer, if no OTP tax was collected by the seller from the retailer, the tax
is imposed on the retailer at the time of purchase.
Insofar as East Coast argued that the assessments were improperly
calculated because they were based on the sales price of the custom blend e-liquids
sold to customers rather than the individual purchase price of the ingredients used to
make the e-liquids, the Board found this argument to be without merit. East Coast
had not provided sufficient evidence to show that the Department erred in assessing
tax on the sale of custom blend e-liquid rather than each of the individual ingredients.
The Board found that the custom blend e-liquids qualified as “a liquid or substance

also Petition for Review, Exhibit D). Prior “Revenue Information”
set forth the same guidance. Exhibit C is a true and correct copy of
the “Revenue Information.”

Joint Stipulation, ¶12.
3
placed in or sold for use in an electronic cigarette” and were therefore taxable per
Section 1201-A of the TPTA.
Finally, to the extent that East Coast challenged the validity and/or
constitutionality of the statutes at issue, the Board held that it could not decide
whether a Pennsylvania statute is unconstitutional. See Parsowith v. Department of
Revenue, 723 A.2d 659 (Pa. 1999).
East Coast now appeals to this Court.4 At the outset, East Coast argues
that under the plain language of the TPTA, it is not required to remit a 40% tax on
the sale of custom blend e-liquid to in-store consumers, as opposed to retailers or
wholesalers. East Coast maintains that under a plain reading of Section 1202-A(a.1)
of the TPTA, “[a] tobacco products tax is imposed on the dealer or manufacturer at
the time the electronic cigarette is first sold to a retailer[.]” 72 P.S. §8202-A(a.1)
(emphasis supplied). East Coast believes that the plain language of this Section
reflects that the law “ONLY applies when the tobacco product is first sold to a
retailer—not an in-person consumer.” East Coast’s Brief at 16 (emphasis in
original).
East Coast notes that it purchases taxable “electronic cigarettes” from
licensed wholesalers who are responsible for collecting the TPTA tax. East Coast
separately purchases water, vegetable glycerin, artificial flavoring, nicotine and
propylene glycol (hereinafter, ingredients) to be mixed in-store for the creation of
custom blend e-liquid to be sold to in-store/non-retail/non-wholesale consumers.
East Coast does not sell custom blend e-liquid to other retailers or wholesalers.
Despite the plain language of the TPTA providing that the TPTA tax only applies

4
This Court’s review of an appeal from the Board is de novo. Kelleher v. Commonwealth,
704 A.2d 729 (Pa. Cmwlth. 1997). However, a stipulation of facts is binding and conclusive on
this Court. Id.
4
when an “electronic cigarette” is sold to a “retailer,” the Department concluded that
East Coast must collect the TPTA tax when the custom blend product is sold to an
in-store consumer thereby creating, in effect, a 40% sales tax. Because East Coast
does not sell its custom blends to a “retailer,” East Coast argues that it should not be
subject to the TPTA manufacturers tax based on its sale of custom e-liquid to in-
store customers.
Citing Section 1928 of the Statutory Construction Act of 1972, 1
Pa.C.S. §1928, East Coast emphasizes that the provisions of the TPTA should be
strictly construed. In construing the meaning of a statute, courts must “ascertain and
effectuate the legislature’s intent.” Office of Governor v. Donahue, 98 A.3d 1223,
1237 (Pa. 2014); 1 Pa.C.S. §1921(a). “When the words of a statute are clear and
unambiguous, there is no need to look beyond the plain meaning of the statute ‘under
the pretext of pursuing its spirit.’ 1 Pa. C.S. §1921(b)[.]” Id. at 1237.
Per East Coast, the language of the TPTA reflects that the taxing statute
applies when the tobacco product is sold to a retailer—not the individual consumers
and non-retail, non-wholesale customers. East Coast maintains that the Department
is enforcing the law against East Coast not as it was written by the legislature, but as
it wishes it were written. Since East Coast was not subject to the TPTA
manufacturers tax on the sale of custom blend e-liquid to in-store customers, by a
plain reading of the statute, it was not required to collect and remit the 40% TPTA
manufacturers tax based on the sale price of its custom blend e-liquid to consumers
that were not retailers or wholesalers.
East Coast argues that to the extent the Department relied on Section
1202-A(b) as authority to support requiring East Coast to collect and remit 40% tax

5
on the sale of custom blends to in-store customers, it was in error. This Section
provides:

(b) Retailer.--A retailer may only purchase tobacco
products from a licensed dealer. If the tax is not collected
by the seller from the retailer, the tax is imposed on the
retailer at the time of purchase at the same rate as in
subsections (a) and (a.1) based on the retailer’s purchase
price of the tobacco products. The retailer shall remit the
tax to the department.[5]
Section 1202-A(b) of the TPTA (emphasis added). East Coast asserts that the
Department fails to interpret this Section properly as it applies to when a retailer
purchases a “tobacco product.”6 East Coast is not purchasing a “tobacco product”
5
This Section of the TPTA is confusing as it uses the terms “dealer” and “seller”
interchangeably. In practice, the “dealer” and the “seller” are the same entity. The “dealer”
becomes the “seller” when the tobacco product is first sold to the retailer. To avoid confusion, we
will refer to the entity as the “dealer/seller.”

6
Section 1201-A of the TPTA defines “tobacco products” as:

(1) Electronic cigarettes.

(2) Roll-your-own tobacco.

(3) Periques, granulated, plug cut, crimp cut, ready rubbed
and other smoking tobacco, snuff, dry snuff, snuff flour,
cavendish, plug and twist tobacco, fine-cut and other
chewing tobaccos, shorts, refuse scraps, clippings,
cuttings and sweepings of tobacco and other kinds and
forms of tobacco, prepared in such manner as to be
suitable for chewing or ingesting or for smoking in a pipe
or otherwise, or any combination of chewing, ingesting
or smoking.
(4) The term does not include:

(i) Any item subject to the tax under section 1206 [72 P.S.
§8206 (relating to an excise tax on the sale or possession of
(Footnote continued on next page…)
6
when it purchases the ingredients. In addition, Section 1202-A(b) has no application
to the sale of custom e-liquid to non-retailers and non-wholesalers when read in
conjunction with Section 1202-A(a.1). Per East Coast, Section 1202-A(b) applies
when the “tobacco product” is “first sold to a retailer,” not when it is sold to an in-
store customer. East Coast contends that once the custom blend is created and sold
to an in-store customer, there is only a retailer’s sale price—which is not subject to
the TPTA. In other words, no tax is owed unless the custom blend/“tobacco product”
is purchased by another retailer or wholesaler.
The Commonwealth responds that it is undisputed that East Coast is a
manufacturer and dealer/seller of a taxable tobacco product—custom blended e-
liquid. The TPTA imposes criminal sanctions for the sale or possession of untaxed
tobacco products. Section 1207-A(a) of the TPTA, 72 P.S. §8207-A(a). Yet, East
Coast argues that this Court should interpret the TPTA in a way that allows it to
manufacture and sell tobacco products entirely free of tax. The Commonwealth
contends that the TPTA is structured to ensure that tax is collected and remitted on
all tobacco products in Pennsylvania. East Coast cannot avoid the tax simply by
structuring its business to sell directly to in-store customers.
The Commonwealth explains the taxing structure as follows. The OTP
tax is imposed on a tobacco dealer/seller or manufacturer “at the time the electronic
cigarette is first sold to a retailer in this Commonwealth” at the rate of 40% of the
purchase price. Section 1202-A(a.1) of the Act. The dealer/seller must collect the

cigarettes within the Commonwealth at the rate of 13 cents per
cigarette)].

(ii) Cigars.

72 P.S. §8201-A.
7
tax from the retailer and remit it to the Department. A retailer may only purchase
tobacco products from a licensed dealer/seller. If dealer/seller does not collect the
tax, the tax is imposed on the retailer at the rate of 40% of the purchase price of the
electronic cigarettes, and the retailer is responsible for remittance of the tax. Section
1202-A(b) of the Act. In turn, “electronic cigarette” is defined as:

(1) An electronic oral device, such as one composed of a
heating element and battery or electronic circuit, or
both, which provides a vapor of nicotine or any other
substance and the use or inhalation of which simulates
smoking.

(2) The term includes:

(i) A device as described in paragraph (1),
notwithstanding whether the device is
manufactured, distributed, marketed or sold as an
e-cigarette, e-cigar and e-pipe or under any other
product, name or description.

(ii) A liquid or substance placed in or sold for use in
an electronic cigarette.
Section 1201-A of the Act (emphasis supplied).
The Commonwealth notes that there are important public policy
purposes behind the TPTA; namely, the protection of public health, particularly that
of children by deterring the use of products that contain nicotine. It is with these
policy objectives in mind that the legislature “enacted a statutory scheme that
ensures someone is responsible for paying the [OTP tax].” Commonwealth’s Brief
at 16.
The Commonwealth argues that East Coast’s claim that it can sell
tobacco products in Pennsylvania tax-free because there is no “first sale” to a retailer
contradicts the plain language of the TPTA, undermines legislative intent, and

8
exposes East Coast and its customers to criminal liability. The Commonwealth
contends that East Coast’s customers are “retailers” as defined in the statute. The
Commonwealth maintains that the term “retailer” is “broadly defined to include a
person that buys tobacco products and is not a licensed wholesaler.” Department’s
Brief at 17.
The Commonwealth emphasizes that the objective of statutory
construction is “to ascertain and effectuate the intention of the General Assembly.”
1 Pa.C.S. §1921(a). Further, every statute “shall be construed, if possible, to give
effect to all of its provisions.” Id. Here, the Commonwealth asserts, the legislature
intended to impose the OTP tax on all sales of tobacco products and intended a
licensee to be responsible for the collection and remittance of the tax. Where, as
here, a manufacturer assumes the role of “dealer,” as East Coast does, that
manufacturer’s customer meets the statutory definition of “retailer.”
Commonwealth’s Brief at 18.7
Finally, the Commonwealth asserts, even if East Coast does not collect
tax from its customers, it is still liable for OTP tax pursuant to Section 1202-A(b).
Contrary to East Coast’s assertion that Section 1202-A(b) only applies when a
retailer purchases a “tobacco product,” the Commonwealth maintains that the statute
applies when there “‘is no tax collected by a seller,’ which is exactly what occurs

7
In the alternative, the Commonwealth argues that in order for East Coast to comply with
the statutory scheme, it must be selling to a retailer. Here, the retailer is either East Coast’s in-
store customer or East Coast itself. If this Court declines to find that East Coast’s customers are
retailers, the Commonwealth asks us to conclude that a transfer takes place between East Coast as
a manufacturer and East Coast as a retailer. In that case, the purchase price of the product is the
“total value” of the e-liquid. Section 1202-A of the Act (defining “Purchase price” as “the total
value of anything paid or delivered”). We are not inclined to adopt this tortured interpretation of
an unambiguous statute.
9
when East Coast makes a sale to an in-store customer without collecting tax.”
Commonwealth’s Brief at 21.
Based on our review of this matter and the arguments of the parties, we
conclude that the Commonwealth advances a strained and impracticable position.
The Pennsylvania Supreme Court has explained that where, as in this case, the issue

involves the interpretation of a statute, we necessarily
begin our analysis by considering the Statutory
Construction Act. The objective of all interpretation and
construction of statutes is to determine and effectuate the
intention of the legislature. Id. at §1921(a). The best
indication of the General Assembly’s intent is the plain
language of the statute. When the words of a statute are
clear and unambiguous, we may not look beyond the plain
meaning of the statute “under the pretext of pursuing its
spirit.” 1 Pa. C.S. §1921(b). Consequently, only when the
words of a statute are ambiguous should a court seek to
ascertain the intent of the General Assembly through
consideration of the various factors found in Section
1921[(c)] of the Statutory Construction Act. 1 Pa. C.S.
§1921(c) (setting forth various considerations to be
employed to discern the intent of the legislature)[.]
Brewington v. City of Philadelphia, 199 A.3d 348, 354-55 (Pa. 2018) (citations
omitted).
Section 1202-A(a.1) of the TPTA expressly provides that the 40% tax
on electronic cigarettes is to be imposed “at the time the electronic cigarette is first
sold to a retailer in the Commonwealth.” (emphasis added). This language is
unambiguous: the tax applies upon the first sale to a retailer and not to individual,
in-store customers. We agree with the Commonwealth that the plain language of
the TPTA reflects the legislature’s intent that tax be collected and remitted on all
tobacco products in the Commonwealth. Nevertheless, to the extent the
Commonwealth maintains that East Coast customers who purchase custom blends

10
are “retailers” as that term is defined in the Act, this argument is absurd. The TPTA
defines a “retailer” as:

A person that purchases or receives tobacco products from
any source for the purpose of sale to a consumer, or who
owns, leases or otherwise operates one or more vending
machines for the purpose of sale of tobacco products to the
ultimate consumer. The term includes a vending machine
operator or a person that buys, sells, transfers or deals in
tobacco products and is not licensed as a tobacco products
wholesaler under this article.
72 P.S. §8201-A. The words of this Section are clear and unambiguous: anyone who
sells tobacco products directly to consumers (including through vending machines)
and is not a licensed wholesaler is considered a retailer. Simply put, a consumer
who buys a custom blend e-liquid from East Coast is purchasing it only for personal
use, not to resell it to anyone else.
The Commonwealth’s goals of taxing all tobacco products and
protecting public health are admirable; however, we agree with East Coast that the
Commonwealth is enforcing the Act as it wishes it had been written, not as it is
actually written. As this Court observed in Uninsured Employers Guaranty Fund v.
Aguilar, 344 A.3d 1162 (Pa. Cmwlth. 2025):

Notably, “[w]e are constrained . . . to apply statutory
language enacted by the legislature rather than speculate
as to whether the legislative spirit or intent differs from
what has been plainly expressed.” Commonwealth v.
Bursick, 584 A.2d 291, 293 (Pa. 1990). Moreover, as a
matter of statutory interpretation, while we are
“admonished to listen attentively to what a statute says[;]
[we] must also listen attentively to what it does not say.”
Kmonk-Sullivan v. State Farm Mu[tual] Auto[mobile]
Ins[urance] Co., 788 A.2d 955, 962 (Pa. 2001) (quoting
Felix Frankfurter, Some Reflections on the Reading of
Statutes, 47 Colum. L.Rev. 527, 536 (1947)). Courts may
not supply terms in a statute that have been omitted
11
because “[i]t is not our role . . . to engage in judicial
legislation and to rewrite a statute in order to supply terms
which are not present therein.” In re Nov[ember] 3, 2020
General Election, 240 A.3d 591, 611 (Pa. 2020).
Id. at 1167.
The facts of this case reflect that East Coast’s business model exploits
a loophole in the TPTA. The proper way for the Commonwealth to address this is
by the General Assembly amending the Act, not by asking this Court to adopt a
distorted reading of its plain and unambiguous language. Because we agree with
East Coast that the Department’s assessments were improper and violated the plain
language of the TPTA, the Board’s order is reversed.8

MICHAEL H. WOJCIK, Judge

8
In light of our holding, we need not address East Coast’s remaining issues on appeal. It
is well settled that when a case raises both constitutional and nonconstitutional issues, a Court
should not reach the constitutional issue if the case can be decided on nonconstitutional grounds.
Roman Catholic Archdiocese of Philadelphia v. Pennsylvania Human Relations Commission, 548
A.2d 328, 331 (Pa. Cmwlth. 1988).
12
IN THE COMMONWEALTH COURT OF PENNSYLVANIA

East Coast Vapor LLC, :
:
Petitioner :
:
v. : No. 487 F.R. 2022
:
Commonwealth of Pennsylvania, :
:
Respondent :

ORDER

AND NOW, this 24th day of April, 2026, the order of the Board of
Finance and Revenue denying East Coast Vapor LLC’s petition for review of tax
assessments is REVERSED.
Unless exceptions are filed within 30 days pursuant to Pa.R.A.P.
1571(i), this order shall become final.

MICHAEL H. WOJCIK, Judge