How to Register
The Department of Revenue administers Tobacco Taxes on cigarettes, other tobacco products, snuff, and vapor products. Cigarette and Tobacco Licenses are obtained online through the Kentucky One Stop Business Portal.
House Bill 249 - Open Vaping Systems (Effective July 1, 2021)
During the 2021 Legislative Session, KRS 138.140 was amended to modify the taxation of open vaping systems. When the components of an open vaping system are sold separately without the liquid solution, the open vaping system tax rate is not applicable. However, vaping kit sales that include the liquid solution or liquid solution sold separately continues to be subject to the open vaping systems tax rate of fifteen percent (15%).
Effective March 27, 2021: Prevent All Cigarette Trafficking (PACT) Act Reporting Requirements for Electronic Nicotine Delivery Systems (ENDS)
If you sell, transfer, or ship for-profit Electronic Nicotine Delivery Systems (ENDS) into Kentucky from outside the state, you are required to register and file monthly reports with the Department of Revenue.
Also, if you sell, transfer, or ship for-profit cigarettes, smokeless tobacco products, or ENDS in interstate commerce, you must register and file monthly reports with the tobacco tax administrator of the state where the shipment is delivered.
Current Kentucky filers, who are now filing and reporting on sales of vapor products, should not be affected by this new federal requirement as the Kentucky electronic filing format already captures all data needed at this time. These Kentucky filers reporting all ENDS products on their tax returns are already meeting all of their Kentucky state filing requirements.
However, if you need registration information, please contact the Tobacco Tax Section at (502) 564-6823 (Option 2) to begin the initial process. You may also review this page to find additional information on the electronic registration and filing requirements.
What are ENDS?
ENDS are defined as any electronic device that delivers nicotine, flavor, or any other substance to the user inhaling from the device. ENDS include:
- An eCigarette, eHookah, eCigar, vape pen, advanced refillable personal vaporizer, electronic pipe; and
- Any component, liquid, part, or accessory of an ENDS device, without regard to whether the component, liquid, part, or accessory is sold separately from the device.
The federal Prevent All Cigarette Trafficking (PACT) Act became effective on June 29, 2010. The PACT Act amends the federal Jenkins Act (15 U.S.C. section 375-378). The Preventing Online Sales of E-Cigarettes to Children Act (2021 Omnibus Appropriations Bill H.R. 133 section 601) amends the definition of cigarette to include electronic nicotine delivery systems (ENDS).
2020 Legislative Changes
Cigarette Tax Stamp Deferred Payment
Effective August 1, 2020, a cigarette wholesaler may choose to defer payment on a stamp order up to 10 days. In order to defer payment, the wholesaler must have a completely executed surety bond (Form 73A530) on file with the DOR. The surety bond must be in an amount that is equal to or greater than the tax, interest, penalties, and collection fees associated with any new or pending-payment stamp order. If the surety bond is not greater than the total of tax, interest, penalties, or collection fees, the wholesaler must pay in full at the time of that particular order. An exception to the payment deferral is during the month of June when stamp orders cannot be deferred beyond June 25th to ensure payment on all stamp orders before fiscal year end. Cigarette Tax Bond Form73A350 (8-20).pdf
Bond Calculation Template.xlsx
Vapor Products Tax, Licensing, and Electronic Filing Submission
House Bill (HB) 351 was enacted and established a tax on vapor products. Effective August 1, 2020, the vapor products tax rate on closed vaping systems is $1.50 per cartridge and the rate on open vaping systems is 15% of the actual price at which the distributor sells the product. Taxable items include both nicotine and non-nicotine products as provided in the following definitions.