Editor’s Note: The complete report GAO-15-771 is available here. Below is an excerpt.
Our analysis shows no current effect of the growing e-cigarette market on FET revenue from cigarettes. Given the limited information about the e-cigarette market, it is difficult to accurately estimate this market’s size or analyze its potential effect on FET revenue from cigarettes and other tobacco products. The increased regulation of tobacco products at the federal and state level, among other things, has contributed to a decline in cigarette use and FET revenue. Recent CDC studies show that e-cigarette use has significantly increased among high school students, while cigarette use has significantly declined. As the regulation of e-
cigarettes unfolds and the market develops, e-cigarette use patterns may change. Federal agencies’ efforts to develop a better understanding of the relationship between e-cigarette and cigarette use will help analysts and government officials develop a more complete understanding of the e-cigarette market and its effect on cigarette FET revenue.