Tobacco Products Tax

V.S.A. tit. 32, ch. 205, subch. 4

in effect

32 V.S.A. § 7811 Imposition of tobacco products tax

7811. Imposition of tobacco products tax (a) There is hereby imposed and shall be paid a tax on all other tobacco products, snuff, and new smokeless tobacco possessed in the State of Vermont by any person for sale on and after July 1, 1959 that were imported into the State or manufactured in the State after that date, except that no tax shall be imposed on tobacco products sold under such circumstances that this State is without power to impose such tax, or sold to the United States, or sold to or by a voluntary unincorporated organization of the U.S. Armed Forces operating a place for the sale of goods pursuant to regulations promulgated by the appropriate executive agency of the United States. The tax is intended to be imposed only once upon the wholesale sale of any other tobacco product and shall be at the rate of 92 percent of the wholesale price for all tobacco products except snuff, which shall be taxed at $2.57 per ounce or fractional part thereof; new smokeless tobacco, which shall be taxed at the greater of $2.57 per ounce or, if packaged for sale to a consumer in a package that contains less than 1.2 ounces of the new smokeless tobacco, at the rate of $3.08 per package; and cigars with a wholesale price greater than $2.17, which shall be taxed at the rate of $2.00 per cigar if the wholesale price of the cigar is greater than $2.17 and less than $10.00 and at the rate of $4.00 per cigar if the wholesale price of the cigar is $10.00 or more. Provided, however, that upon payment of the tax within 10 days, the distributor or dealer may deduct from the tax two percent of the tax due. It shall be presumed that all other tobacco products, snuff, and new smokeless tobacco within the State are subject to tax until the contrary is established and the burden of proof that any other tobacco products, snuff, and new smokeless tobacco are not taxable hereunder shall be upon the person in possession thereof. Licensed wholesalers of other tobacco products, snuff, and new smokeless tobacco shall state on the invoice whether the price includes the Vermont tobacco products tax. (b) The tax established in this section shall not be imposed on: (1) cannabis-related supplies sold by a dispensary registered under 7 V.S.A. chapter 37 to registered patients and registered caregivers, as those terms are defined in 7 V.S.A. § 972; (2) cannabis products, as defined in 7 V.S.A. § 831, that do not contain tobacco; or (3) hemp or hemp products, as defined in 7 V.S.A. § 852, that do not contain tobacco. Added 1959, No. 231, § 7; amended 1995, No. 14, § 7, eff. April 12, 1995; 2005, No. 191 (Adj. Sess.), § 38; 2007, No. 81, § 6, eff. June 11, 2007; 2009, No. 1 (Sp. Sess.), § H.38; 2009, No. 160 (Adj. Sess.), § 36; 2011, No. 45, § 22; 2013, No. 14, § 19, eff. June 30, 2013; 2013, No. 174 (Adj. Sess.), § 39; 2015, No. 54, § 50; 2019, No. 28, § 2; 2023, No. 3, § 91, eff. July 1, 2023; 2025, No. 178 (Adj. Sess.), § 18, eff. June 18, 2026.

32 V.S.A. § 7812 Liability for collection of tax

7812. Liability for collection of tax The licensed wholesale dealer shall be liable for the payment of the tax on tobacco products that he or she imports or causes to be imported into the State or that he or she manufactures in this State, and every licensed wholesale dealer authorized by the Commissioner to make returns and pay the tax on tobacco products sold, shipped, or delivered by him or her to any person in the State shall be liable for the collection and payment of the tax on all tobacco products sold, shipped, or delivered. Every retail dealer shall be liable for the collection of the tax on all tobacco products in his or her possession at any time, upon which the tax has not been paid by a licensed wholesale dealer, and the failure of any retail dealer to produce and exhibit to the Commissioner or his or her authorized representative, upon demand, an invoice by a licensed wholesale dealer for any tobacco products in his or her possession shall be presumptive evidence that the tax thereon has not been paid and that such retail dealer is liable for the collection of the tax thereon. The amount of taxes advanced and paid by a licensed wholesale dealer or retail dealer as hereinabove provided shall be added and collected as part of the sales price of the tobacco products. Added 1959, No. 231, § 7; amended 1971, No. 73, § 32, eff. April 16, 1971; 2015, No. 57, § 79, eff. June 11, 2015.

32 V.S.A. § 7813 Returns and payment of tax by licensed wholesale dealer

7813. Returns and payment of tax by licensed wholesale dealer Every licensed wholesale dealer shall, on or before the 15th day of each month, file with the Commissioner a return on forms to be prescribed and furnished by the Commissioner showing the quantity and wholesale price of all tobacco products sold, shipped, or delivered by him or her to any person in the State during the preceding calendar month. Such returns shall contain such further information as the Commissioner of Taxes may require. Every licensed wholesale dealer shall pay to the Commissioner with the filing of such return the tax on tobacco products for such month imposed under this subchapter. When the licensed wholesale dealer files the return and pays the tax within the time specified in this section, he or she may deduct therefrom two percent of the tax due. Added 1959, No. 231, § 7; amended 1967, No. 346 (Adj. Sess.), § 5; 2015, No. 57, § 80, eff. June 11, 2015.

32 V.S.A. § 7814 Floor stock tax

7814. Floor stock tax (a) Snuff. A floor stock tax is hereby imposed upon every retail dealer of snuff in this State in the amount by which the new tax exceeds the amount of the tax already paid on the snuff. The tax shall apply to snuff in the possession or control of the retail dealer at 12:01 a.m. on July 1, 2015, but shall not apply to retail dealers who hold less than $500.00 in wholesale value of such snuff. Each retail dealer subject to the tax shall, on or before July 25, 2015, file a report to the Commissioner in such form as the Commissioner may prescribe showing the snuff on hand at 12:01 a.m. on July 1, 2015, and the amount of tax due thereon. The tax imposed by this section shall be due and payable on or before August 25, 2015, and thereafter shall bear interest at the rate established under section 3108 of this title. In case of timely payment of the tax, the retail dealer may deduct from the tax due two percent of the tax. Any snuff with respect to which a floor stock tax has been imposed and paid under this section shall not again be subject to tax under section 7811 of this title. (b) Cigarettes, little cigars, or roll-your-own tobacco. Notwithstanding the prohibition against further tax on stamped cigarettes, little cigars, or roll-your-own tobacco under section 7771 of this title, a floor stock tax is hereby imposed upon every dealer of cigarettes, little cigars, or roll-your-own tobacco in this State who is either a wholesaler or a retailer who, at 12:01 a.m. on July 1, 2015, has more than 10,000 cigarettes or little cigars or who has $500.00 or more of wholesale value of roll-your-own tobacco, for retail sale in his or her possession or control. The amount of the tax shall be the amount by which the new tax exceeds the amount of the tax already paid for each cigarette, little cigar, or roll-your-own tobacco in the possession or control of the wholesaler or retail dealer at 12:01 a.m. on July 1, 2015, and on which cigarette stamps have been affixed before July 1, 2015. A floor stock tax is also imposed on each Vermont cigarette stamp in the possession or control of the wholesaler at 12:01 a.m. on July 1, 2015 and not yet affixed to a cigarette package, and the tax shall be at the rate of $0.33 per stamp. Each wholesaler and retail dealer subject to the tax shall, on or before July 25, 2015, file a report to the Commissioner in such form as the Commissioner may prescribe showing the cigarettes, little cigars, or roll-your-own tobacco and stamps on hand at 12:01 a.m. on July 1, 2015 and the amount of tax due thereon. The tax imposed by this section shall be due and payable on or before July 25, 2015, and thereafter shall bear interest at the rate established under section 3108 of this title. In case of timely payment of the tax, the wholesaler or retail dealer may deduct from the tax due two and three-tenths of one percent of the tax. Any cigarettes, little cigars, or roll-your-own tobacco with respect to which a floor stock tax has been imposed under this section shall not again be subject to tax under section 7771 of this title. Added 1959, No. 231, § 7; amended 1995, No. 14, § 10, eff. April 12, 1995; 2001, No. 140 (Adj. Sess.), § 25; 2001, No. 140 (Adj. Sess.), § 27, eff. July 1, 2003; 2005, No. 191 (Adj. Sess.), § 39; 2009, No. 1 (Sp. Sess.), § H.39; 2011, No. 45, § 27a; 2013, No. 174 (Adj. Sess.), § 40; 2015, No. 54, § 51.

32 V.S.A. § 7815 Licensed wholesale dealers

7815. Licensed wholesale dealers All resident licensed wholesale dealers within the State are required to pay the tax on tobacco products for which they may be liable. A person outside this State who ships or transports tobacco products to retailers in this State, to be sold by those retailers, may make application for license as a nonresident licensed wholesale dealer, be granted such license by the Commissioner, and thereafter be subject to all the provisions of this chapter so far as the same pertain to tobacco products, and be entitled to act as a licensed wholesale dealer, provided he or she files proof with his or her application that he or she has appointed the Secretary of State as his or her agent for service of process relating to any matter or issue arising under this chapter. Such nonresident person shall also agree to submit his or her books, accounts, and records to examination during reasonable business hours by the Commissioner or his or her duly authorized agent. Added 1959, No. 231, § 7; amended 1981, No. 31, § 17; 2013, No. 14, § 20.

32 V.S.A. § 7816 Records to be kept; examination

7816. Records to be kept; examination At the time of delivering other tobacco products, snuff, or new smokeless tobacco to any person, each licensed wholesale dealer shall make a true duplicate invoice showing the date of delivery; and the items; and the wholesale price of each item in each shipment of other tobacco products, snuff, and new smokeless tobacco delivered; and the name of the purchaser to whom delivery is made and shall retain the same for a period of three years, subject to the use and inspection of the Commissioner. Each licensed wholesale dealer shall procure and retain invoices showing the items and wholesale price of each item in each shipment of other tobacco products, snuff, or new smokeless tobacco received by him or her; the date of receipt; and the name of the shipper and shall retain the same for a period of three years, subject to the use and inspection of the Commissioner. The Commissioner, by regulation, may provide that whenever other tobacco products, snuff, or new smokeless tobacco are shipped into the State, the railroad company, express company, trucking company, or other carrier transporting any shipment thereof shall file with the Commissioner a copy of the freight bill within 10 days after the delivery in the State of each shipment. All licensed wholesale dealers shall maintain and keep for a period of three years such other records of tobacco products received, sold, or delivered within the State as may be required by the Commissioner. The Commissioner or authorized agents of the Commissioner are hereby authorized to examine the books, papers, invoice, and other records; stock of other tobacco products, snuff, and new smokeless tobacco in and upon any premises where the same are placed, stored, and sold; and equipment of any such dealer pertaining to the sale and delivery of other tobacco products, snuff, and new smokeless tobacco taxable under this subchapter. To verify the accuracy of the tax imposed and assessed by this subchapter, each such person is hereby directed and required to give to the Commissioner or authorized agents of the Commissioner the means, facilities, and opportunity for such examinations as are herein provided for and required. Added 1959, No. 231, § 7; amended 2013, No. 14, § 21.

32 V.S.A. § 7817 Determination of tax on failure to file return

7817. Determination of tax on failure to file return (a) When the Commissioner discovers, by examination of the records of the taxpayer as provided in section 7816 of this title or otherwise, that a person required to file a return under this subchapter has filed an incorrect or insufficient return, the Commissioner may, at any time within three years after the date the return was due, determine the correct amount of tax and shall give notice to the taxpayer of the amount of any deficiency in such tax, together with penalty and interest as hereinafter provided. If no return has been filed as provided by law, the tax may be assessed at any time. When, before the expiration of the period prescribed herein for assessment of an additional tax, a taxpayer has consented in writing that the period be extended, the amount of the additional tax due may be determined at any time within the extended period. The period so extended may be further extended by subsequent consents in writing made before the expiration of the extended period. (b) A determination by the Commissioner in accordance with subsection (a) of this section shall fix the tax, unless the person against whom it is assessed shall, within 60 days after receiving the notice of such determination, apply to the Commissioner for a hearing as is herein provided. The decision of the Commissioner after the hearing may be reviewed as provided in this chapter. Added 1959, No. 231, § 7; amended 1971, No. 73, § 33, eff. April 16, 1971; 1989, No. 222 (Adj. Sess.), § 13; 2007, No. 81, § 5, eff. June 11, 2007; 2013, No. 73, § 10, eff. June 5, 2013.

32 V.S.A. § 7818 Tax as debt to the State

7818. Tax as debt to the State A tax on tobacco products imposed by this subchapter and all increases, interest, and penalties thereon shall become, from the date it is due and payable, a personal debt from the person liable to pay the same to the State of Vermont, to be recovered in a civil action under this section. Added 1959, No. 231, § 7.

32 V.S.A. § 7819 Refunds

7819. Refunds Whenever any tobacco products upon which the tax has been paid have been sold and shipped into another state for sale or use there, or have become unfit for use and consumption or unsalable, or have been destroyed, the licensed wholesale dealer shall be entitled to a refund of the actual amount of tax paid with respect thereto. If the Commissioner is satisfied that any licensed wholesale dealer is entitled to a refund, he or she shall so certify to the Commissioner of Finance and Management who shall issue his or her warrant in favor of the licensed wholesale dealer entitled to receive such refund. Added 1959, No. 231, § 7; amended 1983, No. 195 (Adj. Sess.), § 5(b); 2015, No. 57, § 81, eff. June 11, 2015.

32 V.S.A. § 7821 Criminal penalties [Effective until July 1, 2027; see also § 7821 effective July 1, 2027, set out below]

7821. Criminal penalties [Effective until July 1, 2027; see also § 7821 effective July 1, 2027, set out below] Any person who shall fail, neglect, or refuse to comply with or shall violate the provisions of this chapter relating to the tax on tobacco products or the rules adopted by the Commissioner under this chapter relating to such tax shall be guilty of a misdemeanor and upon conviction for a first offense shall be sentenced to pay a fine of not more than $250.00 or to be imprisoned for not more than 60 days, or both, such fine and imprisonment in the discretion of the court, and for a second or subsequent offense shall be sentenced to pay a fine of not less than $250.00 nor more than $500.00 or be imprisoned for not more than six months, or both, such fine and imprisonment in the discretion of the court. This section shall not apply to violations of sections 7731–7734 and 7776 of this title. Added 1959, No. 231, § 7; amended 2015, No. 57, § 82, eff. June 11, 2015; 2021, No. 105 (Adj. Sess.), § 567, eff. July 1, 2022.

32 V.S.A. § 7822 Application of provisions

7822. Application of provisions The provisions of subchapters 1-3 of this chapter shall apply to the tobacco products tax imposed by this subchapter unless they are clearly applicable only to the tax on cigarettes and the enforcement thereof. Added 1959, No. 231, § 7.

32 V.S.A. § 7823 Deposit of revenue

7823. Deposit of revenue The revenue generated by the taxes imposed under this chapter shall be credited to the General Fund. Added 1995, No. 14, § 8; amended 1999, No. 152 (Adj. Sess.), § 272a; 2005, No. 215 (Adj. Sess.), § 314; 2009, No. 1 (Sp. Sess.), § E.307.3, eff. June 2, 2009; 2011, No. 75 (Adj. Sess.), § 109; 2019, No. 6, § 70, eff. April 22, 2019.

Source: Vermont General Assembly (legislature.vermont.gov)URL: https://legislature.vermont.gov/statutes/chapter/32/205Fetched: 10/21/2026