Tobacco Sellers Reporting, Shipping and Tax Compliance Requirements

This page serves as a tobacco sellers quick guide to reporting, shipping, tax requirements. 

Monthly Reports

  • No later than the 10th day of each calendar month, registrants must provide invoices or memorandums to affected state and local governments, detailing every shipment that was made during the previous month. Each report must:
  • Provide all customer names and addresses
  • Identify the brand names and quantities of all products sold
  • List the names, addresses and telephone numbers of the persons who delivered each shipment
  • Organize all invoice data by the customer name, city, town, and zip code

Shipping and Packaging

All delivery sales, bills of lading and shipping packages must be clearly marked with the following statement: 

CIGARETTES/NICOTINE/SMOKELESS TOBACCO: FEDERAL LAW REQUIRES THE PAYMENT OF ALL APPLICABLE EXCISE TAXES AND COMPLIANCE WITH APPLICABLE STATE AND LOCAL LICENSING AND TAX-STAMP OBLIGATIONS. 

According to 15 U.S.C. § 376a(b)(3), individual sales or deliveries of cigarettes or smokeless tobacco must weigh less than 10 pounds.

Age Verification

Delivery sellers are required to verify each customer’s age by obtaining their full name, birth date and residential address using one or more commercially available databases to be compliant with 15 U.S.C. § 376a(b)(4)

This includes delivery sellers using the following required shipping methods:

  • Obtain an adult signature for each delivery; and
  • Proof of age provided by the signer at the time of delivery.

Recordkeeping

Sellers are required by law to create and maintain detailed records of each delivery sale until the end of the 4th full calendar year beginning after the date of that delivery sale.  Also, all sellers are required to make their records available to ATF, state and local tobacco tax administrators, states attorneys general and chief law enforcement officers based on 15 U.S.C. § 376a(c)(3). records pertaining to delivery sales must be made available to ATF and to:

Payment of Excise Taxes

Delivery sales must meet the following 15 U.S.C. § 376a(d) regulations prior to delivery sales:

  • Pay all state and local excise taxes on cigarettes or smokeless tobacco in advance; and
  • Affix and apply all tax stamps or other indicia indicating the payment of excise taxes on cigarettes or smokeless tobacco as required.

Compliance with State/Local Laws

Per 15 U.S.C. § 376a(a), each delivery sale must be made in compliance with all applicable state and local laws as if the delivery sale occurred entirely within the specific state or place.  These include laws pertaining to:

  • Licensing and tax-stamping requirements;
  • Restrictions on sales to minors; and
  • Payment of excise taxes or other legal obligations relating to the sale, distribution or delivery of cigarettes or smokeless tobacco. 

Penalties

PACT Act violations may be punishable by fines or imprisonment for not more than three years, or both.
Delivery sellers may also be subject to civil penalties not to exceed the greater of:

  • $5,000 for the first violation plus $10,000 for each additional violation; or
  • 2% of gross sales of cigarettes and smokeless tobacco during a 1-year period.
Last Reviewed September 16, 2022