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 The Food and Drug Administration has been in discussions with the e-cigarette industry about a possible online-sales ban of the product, as it prepares a package of proposed regulations for the increasingly popular devices, people familiar with the matter said. 
 
 The FDA, which warned in 2009 that e-cigarettes could pose health risks, has been meeting with e-cigarette makers in recent weeks to hear their views on regulations for the industry. The agency is expected to formally unveil its proposals in October, after several delays. 
 
 The "listening sessions" at FDA headquarters in Silver Spring, Md., ... ||||| Regulation 
 
 (Corrects fourth paragraph reference to products that face normal sales taxes.) 
 
 Apparently, the nicotine business never changes—with smoke or without. Big Tobacco fought government overseers for decades, but eventually traditional cigarettes became heavily regulated products. Now the Food and Drug Administration is working on a package of regulations for e-cigarettes devices, which vaporize liquid nicotine with heat, rather than burning it via tobacco leaves. Among other things, the FDA is considering a ban on online sales of e-cigarettes to cut down on sales to minors, and discussing whether to curtail advertising. A roster of proposed rules is expected in October. 
 
 The regulatory chatter comes as the e-cigarette market is finally expected to top $1 billion this year. Tobacco giant Altria Group (MO) is just this month rolling out its e-cigarette, dubbed “MarkTen.” Reynolds American (RAI) is also rushing to ship its VUSE product. Meanwhile, Lorillard (LO) booked $57 million in e-cigarette revenue in the first three months of the year. 
 
 Bloomberg Industries estimates that at their current pace, e-cigarette sales will top that of traditional smokes by 2047. The estimate comes with a big caveat: the assumption that politicians won’t heap a bunch of new taxes on e-cigarettes—levies that have served as a sort of emphysema to the body of the cigarette business. 
 
 Currently, e-cigarettes are subject to ordinary sales taxes—just like, say, pencils. Big Tobacco loves that. Here’s why: In the average state, 11 percent of cigarettes are smuggled, according to a recent report by the Mackinac Center for Public Policy, a Michigan think tank. “Smuggled” in this case has a few meanings. It includes smokes that are illegally ferried from states and countries with lower taxes, as well as counterfeit cigarettes. 
 
 “Once a tax gets too high, it acts in the same way that Prohibition did: You get substantial black-market activity,” says Scott Drenkard, an economist at the Tax Foundation. 
 
 Meanwhile, the preponderance of smuggled cigarettes is alarming and the Mackinac Center says counterfeits—often stuffed full of sawdust and “human excrement”—are a growing problem. Here’s a look at the share of cigarettes that are smuggled in the top five states: 
 
 • New York 61 percent ($4.35 taxes per pack) 
 
 • Arizona 54 percent ($2.00) 
 
 • New Mexico 53 percent ($1.66) 
 
 • Washington 49 percent ($3.03) 
 
 • Rhode Island 40 percent ($3.46) 
 
 As tobacco giants roll out their e-cigarette offerings, the new smokeless devices are where they’ll focus their efforts. And as long as the government doesn’t burn them with a bunch of new taxes, they will probably be happy to keep e-cigarettes off billboards or Web stores or whatever requirements regulators throw their way.
– The American e-cigarette business is booming: It's expected to make more than $1 billion this year, and sales are projected to overtake those of real cigarettes by 2047. Big tobacco is probably fine with this, reports BusinessWeek, and the reason why is surprising. According to a recent report, an average of 11% of cigarettes sold in each US state are smuggled in, and that figure is way higher in states like New York (61%), Arizona (54%), and New Mexico (53%). "Smuggled" smokes can be anything from those brought in from other states with lower taxes to counterfeit cigarettes—which are sometimes stuffed with sawdust and "human excrement." "Once a tax gets too high, it acts in the same way that Prohibition did: You get substantial black-market activity," says an economist. E-cigs, on the other hand, are only subject to regular sales taxes, so the black market incentive isn't there. Tobacco giants are now moving their focus to the e-cig market and launching products of their own. Of course, now the FDA is looking to start regulating the industry, as the Wall Street Journal reports. But bans on online sales or advertising restrictions probably won't bother them that much, the BusinessWeek report suggests—so long as they're not hit with taxes.