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Tobacco Tax Information


Before a wholesaler or retailer sells any tobacco products in Montana, they should assure that these products are approved for sale in Montana. Review the following directories for a list of tobacco products that are approved for sale in Montana. All wholesalers and retailers selling tobacco products in Montana must be licensed by the Department. Refer to this list of licensed businesses for more information:

Licensed Businesses

Department of Justice Tobacco Sales and Directory - This web site and directory will provide you with the list of tobacco products that are approved by the Department of Justice to be sold in the State of Montana.

Department of Justice Reduced Ignition Propensity Cigarettes (Fire Safe) Standards and Directory - This web site and directory will provide you with information on fire safety standards for cigarettes and a list of cigarettes that are approved by the State Fire Marshall to be sold in the State of Montana.

Department of Revenue Cigar Sales and Directory - Click on the "Classification of Cigars" tab to the right for cigar information. This tab will provide you with information on the classification of "little cigars" as cigarettes and a directory listing which cigars are classified as cigarettes for tax purposes.


Cigarette Tax Information


Montana cigarette wholesalers are required to pre-collect a tax of $1.70 per package of 20 cigarettes (8.5¢ per stick of cigarette). The tax is proportionally adjusted for different size packages. This tax applies to all cigarettes sold in Montana and it is included in the retail price of the cigarettes.

A tax decal must is required to be affixed to each package by a licensed wholesaler. The tax decal can be purchase only by a licensed wholesaler at face value less an allowance to defray the costs of affixing the insignias and pre-collecting the tax on behalf of the State of Montana.

The cigarette tax revenues, after tribal revenue sharing payments, are distributed 8.3% or $2 million, whichever is greater to a state special revenue fund for the credit of the department of public health and human services for the operation and maintenance of state veterans' nursing homes; 2.6% in the long-range building program account; 44% in the state special revenue fund to the credit of the health and Medicaid initiatives account; and the remainder to the state General Fund (16-11-101 through 16-11-159, MCA; 42.31.101 through 43.31.3), ARM and 42.31.301 through 42.31.350, ARM)


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Cigarette Tax Information


Montana cigarette wholesalers are required to pre-collect a tax of $1.70 per package of 20 cigarettes (8.5¢ per stick of cigarette). The tax is proportionally adjusted for different size packages. This tax applies to all cigarettes sold in Montana and it is included in the retail price of the cigarettes.

A tax decal must is required to be affixed to each package by a licensed wholesaler. The tax decal can be purchase only by a licensed wholesaler at face value less an allowance to defray the costs of affixing the insignias and pre-collecting the tax on behalf of the State of Montana.

The cigarette tax revenues, after tribal revenue sharing payments, are distributed 8.3% or $2 million, whichever is greater to a state special revenue fund for the credit of the department of public health and human services for the operation and maintenance of state veterans' nursing homes; 2.6% in the long-range building program account; 44% in the state special revenue fund to the credit of the health and Medicaid initiatives account; and the remainder to the state General Fund (16-11-101 through 16-11-159, MCA; 42.31.101 through 43.31.3), ARM and 42.31.301 through 42.31.350, ARM)


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Other Tobacco Products


Moist snuff is any finely cut, ground, or powdered tobacco, other than dry snuff, that is intended to be placed in the oral cavity. Moist snuff tobacco products are taxed at a rate of $0.85 per ounce, based upon the listed net weight of the package. The tax is collected monthly from a wholesaler or distributor of the product. The wholesaler or distributor is entitled to a 1.5% allowance for collection and administrative expenses at the time the tax return and payment is remitted to the Department of Revenue. Tobacco products tax revenues, after tribal revenue sharing payments, are distributed as follows: one-half in the state General Fund and one-half in the state special revenue fund account for health and Medicaid initiatives. (16-11-101 through 16-11-159, MCA; 42.31.201 through 42.31.221, ARM) All tobacco products, except cigarettes, and moist snuffs are subject to a tax of 50% of its wholesale price. The tax is collected monthly from a wholesaler or distributor of the product. The wholesaler or distributor is entitled to a 1.5% allowance for collection and administrative expenses at the time the tax return and payment is remitted to the Department of Revenue. Tobacco products tax revenues, after tribal revenue sharing payments, are distributed as follows: one-half in the state General Fund and one-half in the state special revenue fund account for health and Medicaid initiatives. (16-11-101 through 16-11-159, MCA; 42.31.201 through 42.31.221, ARM)
 

TOBACCO PRODUCTS WHOLESALER/SUBJOBBER LICENSES

A wholesaler's license is $50, a subjobber's license is $50 and a tobacco product vendors (ten or more vending machines) license is $50. A license fee is imposed on a cigarette wholesaler, subjobber and vendor who operates ten or more vending machines in Montana. The annual license fee is $50. All revenues are deposited to the General Fund. (16-11-120 through 16-11-125, MCA) Contact the Department of Revenue, eStop Business License Service toll free at (866) 859-2254 or (406) 444-6900 in Helena to register your business and obtain a retailer's license.
 

TOBACCO PRODUCTS RETAIL LICENSE

Retailer's license is $5. A person is required to obtain a $5 annual retailer's license to sell tobacco products (on premises) at retail, whether over the counter, by vending machine, or otherwise. A retail vendor who operates nine or fewer vending machines is considered a retailer and pays an annual license fee of $5. All revenues are deposited to the General Fund. (16-11-120 through 16-11-125, MCA) Contact the Department of Revenue, eStop Business License Service toll free at (866) 859-2254 or (406) 444-6900 in Helena to register your business and obtain a retailer's license.


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Cigarette Minimum Price Listing


Minimum Price List - Updated on May 01, 2016

NOTICE:

Montana regulations prohibit the sales of cigarette brands that do not have a minimum price listed. The attached documents provide the complete and current list of cigarette brands that are registered with the Montana Attorney General's Office. Sales of unlisted cigarettes are a violation of 16-11-505 of the Montana Code Annotated, and punishable by 16-11-509, MCA for each violation. A civil penalty in the amount of $250 for the first full or partial pack and $10 for each additional full or partial pack to which a tax insigna is affixed or that is sold, offered for sale, or possessed for sale in violation of the 16-11-505 of the MCA.


 

Classification of Cigars as Cigarettes


Important Information for Manufacturers, Montana Licensed Wholesalers, Subjobbers and Retailers

Effective July 1, 2007, some cigars because of their appearance and characteristics were classified as cigarettes.

Administrative Rules of Montana 42.31.206, 42.31.207, and 42.31.208 clarify that certain cigars are considered cigarettes for the Youth Access to Tobacco Products Control Act and the taxation of tobacco products in Montana. These rules also establish the criteria and process the department will use to identify which cigars are cigarettes for the Youth Access Act and for tax purposes, and how to contest and request a judicial review of this determination.

These rules impact such cigar brands as (but not limited to) Blackstone, Captain Black, Dark Horse, Dean's, Hats Off, Muriel, Prime Time, Red Buck, Rojo, Swisher Sweet Little Cigars, and Winchester.

Future determinations that a cigar is classified as a cigarette by the department under the administrative rules are effective immediately upon publication. We will not allow time to sell off existing inventory for future determinations. Therefore, if you wish to sell a product that is not on the list, but that you suspect might be in the future, please contact us about that product.

The links below will help you better understand the classification of cigarettes as defined in Montana statute.

Department of Revenue's list of cigars classified as cigarettes
Specific administrative rules related to cigars and cigarettes - Administrative Rules of Montana 42.31.206, 207 and 208
Definition of "cigarette" for tax application purposes as found in 16-11-102 (2)(a), MCA

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Alternative nicotine or other vapor product Retail Licenses


Do you sell or plan to sell alternative nicotine products in your retail establishment? The Montana Department of Revenue wants to notify retailers who sell alternative nicotine or vapor products that under new Montana law SB 66, you’ll need to apply for a license before January 1, 2016. They’re sometimes called vapor cigarettes or vapes, and even if you have a retail tobacco license, you’ll need this license to sell these types of products.

 

The alternative nicotine or vapor products license is $5 annually.

Apply for Your Alternative Nicotine or other vapor products license here:

The alternative nicotine or vapor products license application is now available on the Department of Revenue website. Please visit the eStop Business Licenses Online Service to apply and pay for your alternative nicotine or other product retail sales license.  

The Montana Department of Revenue eStop unit can issue you an alternative nicotine license via the online process or paper application.  


Frequently Asked Questions

Businesses that sell alternative nicotine products directly to Montana’s consumers must purchase a $5 retail license by January 1, 2016, in order to continue selling alternative nicotine or vapor products.

Even if you currently sell these vapor products and have a retail tobacco license, you will need this new alternative nicotine or vapor products license in order to continue selling these vapor products in Montana. This is a new law that came from Senate Bill 66 during the 2015 legislative term.


Q. What are alternative nicontine or vapor (vape) products?


A. Vape products are electronic devices used to produce an inhaling or smoking vapor. These vape devices are known as e-cigarette, vapor device, vape, vapor generator, or cold smoke devices. Accessories, liquid, or e-juice used with or used to modify the vape devices are also alternative nicotine or vapor products.


Q. We are a medical marijuana dispensary co-op. We do not sell any form of tobacco or nicotine alternative, nor do we sell e-cigarettes. Does my business need to have a vape license?


A. Yes. A vape license is required if the dispensary sells or leases any vapor or cold smoke devices used by your clients as an alternative method to smoking their medications. Only licensed medical equipment distributors of vaporizers and nebulizers regulated and properly certified by the FDA are exempt from the vape licensing requirement.


Q. How do I buy an alternative nicotine or vapor products (vape) license?


A. The vape license is processed through the eStop Business Licenses service:

1. Apply and pay online through our eStop Business Licenses Service.

2. Mail in the application using our fillable Form MA - Master Application Form for eStop Licenses.

3. Email our customer service center directly at DOReStop@mt.gov or call toll free at 1 (866) 859-2254 (in Helena (406) 444-6900).


Q. I already have a tobacco retail license. Why do I have to buy this license?


A. The tobacco retailer license allows you to sell tobacco products. Vapor products do not contain any tobacco. This new law has limited the sales of vape products to consumers who are 18 or older. This license requirement allows the state to identify the retail distributors of these products. It helps our investigators to ensure vape products are not made available to children under 18.


Q. Does a licensed wholesaler, subjobber, or vendor need to have this license?


A. No. Wholesalers, subjobbers, and vending machine operators are not required to be licensed because their customers are not Montana consumers. Only if a wholesaler, subjobber, or vending machine operator also sells retail vapor products and vape accessories directly to consumers, then they are required to buy this license.


Q. My business only sells vapor products. Do I have to buy a tobacco products retail license?


A. No. You only need to buy an alternative nicotine or vape products retail license.


Q. My eStop license's anniversary date is in February. Can I add this license on my anniversary date?


A. No. To continue to sell vapor products and accessories, your business must be actively licensed to sell to Montana customers by January 1, 2016.


Q. Will the department prorate the $5 fee when my anniversary date is in February and my licenses are renewed within a month after I added this license?


A. No. The $5 fee cannot be prorated.


Q. What is the penalty for selling without a license?


A. The civil penalty is a $100 fine. This penalty can be assessed by inspectors from the DPHHS or AG office. Montana Code Annotated 16-11-308(1) Civil penalties – license suspension – tobacco education fee speaks to the penalty of operating without a license.


Q. Will my business be penalized if I failed to obtain a license by January 1, 2016?


A.That is a possibility, if your business is selected for an onsite inspection to check your business licensing compliance and you haven’t bought a license yet. There are four different state and federal agencies enforcing the sales of tobacco and vape products. Each agency has their own inspectors and goals.

1. The Montana Department of Public Health and Human Services' (DPHHS) job is to ensure tobacco and vapor products are not sold to underage minors.

2. The Montana Department of Justice's (AG) job is to ensure sales of cigarettes and loose tobacco are in compliance with the National Tobacco Master Settlement Agreement (MSA).

3. The Montana Department of Revenue’s (DOR) job is to ensure all businesses are properly licensed and the tobacco taxes are properly assessed.

4. The federal Food and Drug Administration’s (FDA) job is to regulate and approve the type, packaging, and availability of tobacco products sold in the United States.