With PVC (Polyvinyl chloride), the “C” is the bad stuff when hit with a laser. It is always a good idea to check the Material Safety Data Sheet (MSDS) from the manufacturer, as @adammhaile suggests.
There are options for pvc-free heat transfer material. Some providers still put “vinyl” in the product name, which can be confusing.
And here is just one post from this forum covering this.
It is always a good idea to check the Material Safety Data Sheet (MSDS) from the manufacturer, as @adammhaile suggests.