Other Tobacco Product Taxes

Overview

Montana taxes all tobacco products except cigarettes and moist snuff at 50% of the wholesale price, except for premium cigars.

Premium Cigars

Premium cigar means any roll of tobacco that is hand wrapped in 100% whole tobacco leaf, is not wrapped by a machine, and does not contain a filter, tip, or any characterizing non-tobacco flavor. Premium cigars are taxed at the lessor of 50% of the wholesale price or $0.35 per premium cigar.

We collect tobacco tax from wholesalers and distributors every month.

Montana gives wholesalers and distributors a 1.5% allowance for collecting and administering the tax when they submit their return and payment.

Wholesaler and Distributor Requirements

We collect tobacco tax from wholesalers and distributors every month.

Montana gives wholesalers and distributors a 1.5% allowance for collecting and administering the tax when they submit their return and payment.

Licensing

You may apply for the following licenses through the eStop Business Licenses Service:

• Wholesaler
• Subjobber
• Tobacco vendor
• Retailer

Reporting

You may report tobacco sales through our TransAction Portal (TAP).

The return is due by the 15th of each month.

Revenue Distribution

Revenues, after tribal revenue sharing payments, are distributed:

• 50% to the state General Fund
• 50% to a state special fund for health and Medicaid initiatives

Legislative Update: Senate Bill 122

Senate Bill 122, signed into law by Gov. Greg Gianforte on May 19, 2023, revised the Other Tobacco Product tax.

This bill:

• Defines premium cigars
• Revises the tax on premium cigars to the lesser of 50% of the wholesale price or $0.35 per cigar
• Applies to premium cigars sold by a wholesaler after June 30, 2023

Related Laws

• 16-11-101 through 16-11-159, MCA
• 42.31.201 through 42.31.221, ARM