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Vape Tax and PACT Act Compliance


There are 31 states requiring B2B (distributors) Vape excise tax today. Vapor distributors are currently pay and file excise tax returns with the vape taxing states and other local jurisdictions.

The new law, takes effect on about Mar 28 2021, requires any vape sellers (including B2C remote sellers) to file & pay Other Tobacco Products (OTP) excise tax, and file PACT Act report with the ship to states and other localities monthly, in addition to sales & use tax. The first report is due by April 10 for sales in month of Mar. The same cigarettes tax rules now apply to vape. The Vape PACT Act covers all Electronic Nicotine Delivery Systems (ENDS).

The new vape law included other provisions like ATF registration and reporting requirements, restrictions on shipping, new labeling guidelines, and records keeping mandates.  

States with Vape Excise Tax (31) : Alaska (cities), California, Colorado, Connecticut, Delaware, District of Columbia, Georgia, Illinois, Kansas, Kentucky,  Louisiana, Maine, Maryland (counties), Massachusetts, Minnesota, Nevada, New Jersey, New Hampshire, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Utah, Vermont, Virginia, Washington, Wisconsin, West Virginia, and Wyoming. Georgia and Colorado  started taxing E-cigarette/E-vaping products on Jan 1, 2021. In Alaska only selected cities and in Maryland only Montgomery county imposed vape tax.

States without Vape Excise Tax (20) : Alabama, Arkansas, Arizona, Florida, Hawaii, Iowa, Idaho, Indiana, Michigan, Missouri, Mississippi, Montana, North Dakota, Nebraska, Oklahoma, Rhode Island, South Carolina, South Dakota, Tennessee, and Texas.

Prevent All Cigarette Trafficking Act (PACT): Originally passed in 2009, the PACT Act amended the existing Jenkins Act of 1949, which required interstate shippers to report cigarette sales to state tobacco tax administrators in order to combat illicit sales and tax avoidance. 

Electronic Nicotine Delivery Systems (ENDS) :  Noncombustible tobacco products, includes devices, components, and/or parts that deliver aerosolized e-liquid when inhaled. Examples include vape or vape pens, personal vaporizers, electronic cigarettes, cigar likes, e-pens, e-hookahs, e-cigars and e-pipes.  

Master Settlement Agreement (MSA): Signed in November of 1998, this civil settlement between participating tobacco manufacturers and participating states exempts the tobacco manufacturers from tort liability from state governments in exchange for a combination of yearly payments to the states and voluntary restrictions on advertising and marketing tobacco products. 

Avior Tax Services (ATS) Compliance is a comprehensive tobacco tax cloud platform, including vape tax, offering automated excise tax fully featured services. Customers are using ATS to ensure government compliance, lower costs, become more agile, and innovate faster. 

ATS Determination offers automated real-time identification and calculation of taxes for transactions using web services.

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