Tobacco Tax Guide

In the United States tobacco products are taxed at both the federal and state levels, in addition to any local sales taxes and local tobacco-specific taxes. The term tobacco means any product that includes tobacco material, this includes cigarettes and Other Tobacco Products (OTP).

Tobacco is regulated by states, so to be able to sell tobacco into a state or within a state you must have a tobacco licenses. Most states they require separate permits for cigarettes and OTP. There are three types of tobacco licenses, wholesale or distributor, manufacturer, and retailer licenses. Wholesale distributor license can be classified as instate or out of state licenses. Different type or class of tobacco permits may required to file different tax returns forms and schedules. Tobacco permits must be renewed annually, most states charge $50 to $100 to renew tobacco license. Licensed distributors must file tax returns at end of each month even if they had no sales. Late tobacco tax returns result in penalties and late fees. Not filing a no activity tax return results in state estimating your tax due with penalty and late filing fees.