The Tobacco Control Act was passed in 2009, and it’s still in effect today. The food and Drug Administration (FDA) uses the act to control the sale and marketing of tobacco and related products. The goal of this act is to prevent kids from starting lifelong addictions to tobacco products by purchasing them or by making them more expensive, which also raises the price of cigarettes.
You will require a tobacco license in the following conditions.
- If you are manufacturing tobacco products (Issued by Federal authorities)
- If you are importing or exporting tobacco-related products like cigarettes. (Issued by Federal authorities)
- If you are a wholesaler or seller of tobacco or tobacco products. (Issued by state or local authorities)
Many states have passed laws that govern the issuing of licenses. These laws vary by state but generally include requirements for background checks and training courses that teach new owners how to run their businesses properly.
So, what is a tobacco license?
A tobacco license is a permit issued by a local or state government agency that allows the holder to sell tobacco products as a retailer or a wholesaler. Most states require a license to sell tobacco products in most cases.
The U.S. Food and Drug Administration (FDA) issues licenses for cigarette manufacturing, distribution, wholesale trade, and import/export of cigarettes; however, these licenses do not authorize the sale of cigarettes on behalf of another entity or individual (e.g., vending machine operator).
Some states require an over-the-counter (OTC) permit for the sale of cigarettes and other tobacco products. While some only allow sales from behind glass or with limited access to minors. In addition, some states require licenses for online retailers who sell e-cigarettes and other nicotine products via their websites or mobile applications; this is true even if they’re not selling directly on-site but instead through third parties such as Amazon.
Steps to apply for a tobacco license
Each state has its own law about applying for a tobacco license. Anyhow, the authorities issue the license for a period of 1 year to 2 years. If you have multiple locations where you sell tobacco products then you will require a separate license for each of these locations.
As stated above the fee and procedures to apply for a tobacco license varies state to state. Let us take the example of Kentucky.
As a retailer, to apply for a tobacco license, you’ll need to fill out an application form and pay the $100 fee. For distributors, the fee is $500. You’ll also need to provide proof of your business’s current certificate of occupancy (CO), as well as copies of any other licenses or permits held by your company.
Your application should include information about the type of products sold at your store, whether it sells cigarettes or cigars, or any other tobacco products, how many locations you plan on opening in the state, and whether there are any existing businesses operating nearby that sell similar products (if so, give their location).
You can find more detailed information about filling out the Kentucky Tobacco License and also apply for a license on the government one-stop portal.
How much does a tobacco license cost?
A tobacco license is the official stamp of approval that allows you to sell and distribute tobacco products. In most states, it costs around $500 for a one-year license and comes with some additional fees for renewal. Some states charge less. For example, in Georgia, the cost of applying for a tobacco license is just $10.
Some states issue a license for 2 years and some issue it for one year only.
To find out how much your state charges for an initial or renewal application, please contact the department directly.
How often is a tobacco license renewed?
Your tobacco license will be renewed every two to three years. Some states require it to be renewed in a 12-month cycle. Some states require that you renew the license at the same time as your business or property tax, while others allow you to delay this until after you’ve paid your taxes and/or fees.
If your state requires a renewal of your tobacco license in order for it to be valid. Failing to renew could result in monetary fines and sometimes jail.
Penalty for failing to get a tobacco license
The fine also varies in different states. But renewal is a must and you can be fined or jailed if you fail. The fine amount can range between $100 to $500 or more. The amount also varies based on the offense type and how many times you broke the law. Usually, the first-time offender has to pay a lesser penalty as compared to second or multiple-time offenders.
In some cases, your license can be canceled permanently or you might also face jail terms.
The proper way to display the tobacco license?
When you apply for a tobacco license, the state will require that you display your license in a place where it is visible to customers and staff members. This can be on the wall or behind the counter or the POS, but cannot be hidden away in some out-of-sight area. You can get more details on the FDA portal. (https://www.fda.gov/tobacco-products/retail-sales-tobacco-products/retailer-regulations-and-guidance)
Do you need a license to sell vapes?
Vapes are not regulated by the FDA, and they do not require a license in most states. In some states, you can legally sell vapes without a license. The following are examples of where you may need to apply for a tobacco vendor’s license:
- Nevada has a licensing program for all vendors who sell tobacco products (including e-cigarettes).
- Colorado requires that all vendors selling cigarettes must be licensed by its Department of Revenue.
You do not need to apply for a license if your business is located outside of any state’s borders or if it sells only non-tobacco products such as vape cartridges or e-liquid bottles containing nicotine; however, if you want to sell tobacco products online or offline then make sure that there aren’t any laws against doing so, in your state, before making an application!
Responsibilities as a Tobacco license holder?
- You are responsible to follow the law of your state. For example, in San Francisco, the minimum age to buy tobacco is 21. So, you cannot sell tobacco products to anyone below this age. If you do so you will be fined and your license can be canceled permanently or for a certain period of time. As per California law, you can be fined $60,000 for selling tobacco products to anyone below 21 years of age. Similar laws might be applicable in different states.
- You must ensure that your employees are trained on the proper sale of tobacco products and how to avoid selling to minors or the minimum tobacco purchase age set in your city or state.
- You must report sales transactions to the state within 10 days of completing them.
- You must keep records of all purchases, sales, and inventory for at least 2 years after the date of purchase or sale (whichever is later).
Final words
Obtaining a tobacco license is the first step before you start selling, wholesaling, manufacturing, or exporting/importing tobacco-related products. The procedure to obtain the license varies from state to state and the fees and penalties also vary.
