Other Tobacco Products Tax
Act 84 of 2016 imposed tax on Other Tobacco Products. That includes smokeless tobacco, pipe tobacco, roll-your-own tobacco, e-cigarettes (including substances that go into e-cigarettes), and any other tobacco products for chewing, ingesting or smoking, except cigars.
The tax rate for e-cigarettes is 40 percent of the purchase price from the wholesaler on the following:
- Electronic cigarettes — defined as an electronic oral device, such as one composed of a heating element and battery, electronic circuit or both. An electronic cigarette provides a vapor of nicotine or any other substance, and the use or inhalation of an electronic cigarette simulates smoking. Electronic cigarettes are subject to be taxable regardless of whether the devices are manufactured, distributed, marketed or sold as an e-cigarette, e-cigar, e-pipe or under any other product, name or description. These devices are taxable when sold with or without the liquid or substance.
- Any liquid or substance sold for use in an electronic cigarette, regardless of whether the liquid or substance contains nicotine.
- E-cigarette devices sold in complete kits that include any liquid or substance for use in the electronic cigarette, regardless of whether the liquid or substance contains nicotine.
Example: If the retailer purchased e-cigarette liquid for $10, the retailer would pay tax of $4.
Roll-your-own, chewing tobacco, snuff and pipe tobacco
The tax is 55 cents ($0.55) per ounce, with a minimum tax per package of 66 cents ($0.66). For example, if the retailer purchases 100 ounces of tobacco in two-ounce packages, the tax due would be $55. If the same quantity is purchased in one-ounce packages, the tax due would be $66.
List of what is taxable under the Tobacco Products Tax
- E-cigarette devices sold with or without liquid or substance
- Liquids or any other substance that goes into e-cigarettes
- Roll-your-own tobacco
- Pipe tobacco
- Granulated tobacco
- Plug cut tobacco
- Crimp cut tobacco
- Ready rubbed tobacco
- Chewing tobacco
- Dry snuff
- Snuff flour
- Plug and twist tobacco
- Fine cut tobacco
- Any other type or variation of smoking and or chewing tobacco.
All manufacturers, wholesalers and retailers engaged in commerce in the commonwealth are required to be licensed for the sale of tobacco products.
The cost of an OTP license is as follows:
- Wholesaler & Manufacturer licenses are $1,500 per location.
- Retailer licenses are $25 per location.
- Vending machine licenses are $25 per location.
New Tobacco Products Licenses can be applied for online by visiting www.pa100.state.pa.us. Tobacco Products License renewals must now be completed electronically through e-TIDES by visiting www.etides.state.pa.us.
Reporting and Payment
Pennsylvania licensed tobacco product manufacturers and wholesalers are required to file monthly tax returns, whether or not taxable transactions occur in a period. Visit www.etides.state.pa.us to file and remit payments electronically. In addition to filing the electronic tax return, reports REV-679 along with accompanying schedules, and REV-1808 must be filed on a monthly basis. All reports and schedules can be found under Forms and Publications.
Attention Tobacco Retailers in Philadelphia: In addition to required state tobacco licensure, any tobacco/e-cigarette retailer located in the City of Philadelphia must also obtain a Philadelphia tobacco retailer permit. To apply for a Philadelphia tobacco retailer permit, please visit www.tobaccopermit.phila.gov.