An act relating to the regulation of tobacco products and tobacco substitutes

Tobacco license fee increased from $150 to $1,000 per year; tobacco substitute endorsement fee increased from $75 to $1,000 per year.

New section 1015 directs all penalties, settlement monies from tobacco violations, and excess licensing fees to the Tobacco Trust Fund (18 V.S.A. 9502) for tobacco cessation and prevention activities.

Civil penalty for selling tobacco products or substitutes without a license increased from $200 (first offense) and $500 (subsequent) to $2,000 (first offense) and $5,000 (subsequent).

Civil penalty for selling tobacco to a person under 21 increased from $100 for the first offense to $1,000; subsequent offenses now also carry license suspension or revocation in addition to the $500 civil penalty.

New section 1014 grants the Department of Liquor and Lottery the same enforcement powers and authority for tobacco laws as it has for alcohol laws.

Minimum civil penalties added for wholesale dealer violations: not less than $25 for first offense and not less than $200 for subsequent offenses.

Annual reporting requirement on online tobacco sales enforcement activity by the Department of Liquor and Lottery and Office of the Attorney General to legislative committees was removed from section 1010.

Specific tobacco administrative penalty provisions in section 210 (up to $7,500 for wholesale dealers, up to $2,500 for tobacco licensees, and first-violation warning requirement) were repealed.

Tax stamps are now required on tobacco substitutes in addition to cigarettes, as evidence of tax payment under section 7771(b).

Wholesale dealer licensing authority shifted from the Division of Liquor Control to the Commissioner of Taxes (32 V.S.A. 7731).

Tax records may now be disclosed to the Department of Liquor and Lottery for purposes of investigating and enforcing tobacco laws (32 V.S.A. 3102(e)(25)).

Wholesale dealer definitions in 32 V.S.A. 7702 expanded to include 'other tobacco products' alongside cigarettes, tobacco substitutes, little cigars, roll-your-own tobacco, and snuff.

All tobacco tax rate provisions (including rates of 154 mills per cigarette, 92% of wholesale price for low-nicotine substitutes, and 100% for high-nicotine substitutes) were removed. The bill title changed from 'regulation and taxation' to just 'regulation.'

A new section 1002b was added to 7 V.S.A. chapter 40, moving wholesale dealer licensing from the Department of Taxes (32 V.S.A.) to the Division of Liquor Control. A $1,245 annual license fee per wholesale outlet is now set. New definitions for 'licensed wholesale dealer,' 'wholesale dealer,' 'wholesale dealer's license,' 'wholesale outlet,' and 'wholesale price' were added to the chapter.

A new exemption was added to the internet sales prohibition: licensed wholesale dealers may now ship directly to licensed retail dealers in Vermont without violating the direct-to-consumer shipping ban.

The Tobacco Trust Fund establishment (18 V.S.A. section 9502) and the provision directing penalties, settlements, and excess licensing fees into that fund were removed. The Complex Litigation Special Fund amendment was also removed.

Municipal tobacco license fees were reduced from $1,000 (Senate version) to $150 for a tobacco license and $75 for a tobacco substitute endorsement in the enacted version.

The first-offense civil penalty for selling or furnishing tobacco to a person under 21 was reduced from $1,000 (Senate) to $150 in the enacted version. Subsequent offense penalties remain at $500.

New annual reporting requirements were added requiring the Department of Liquor and Lottery and the Office of the Attorney General to report to legislative committees each January 15 on online tobacco sales enforcement, including number of compliance checks, cases referred, public reports received, and penalties imposed.

In the multiple-violation escalation schedule for repeat sales to minors, 'civil penalty' was changed to 'administrative penalty,' and the language was adjusted from fixed amounts to 'not less than' minimums.

A new requirement was added that the Division of Liquor Control shall only issue a tobacco license if the municipality's local control commissioners have approved the application, giving local governments a gatekeeping role.

The deceptive products prohibition (section 1013) was expanded to include 'possess for sale' as a prohibited activity, broadening beyond just marketing, promoting, labeling, advertising, distributing, offering for sale, or selling.

License expiration changed from a fixed date (midnight, April 30 of each year) to a rolling term of one year from the date of issue.

Youth who misrepresent their age to purchase tobacco now have the option to participate in a nationally recognized youth tobacco cessation program (to be determined by the Department of Health) as an alternative to or in addition to community service.

All tax provisions removed, including cigarette tax rates (154 mills per cigarette), tobacco substitute tax rates (92% or 100% of wholesale price based on nicotine concentration), stamp requirements, and nonresident wholesale dealer collection mechanisms. The bill title changed from 'regulation and taxation' to just 'regulation.'

Tobacco Trust Fund provisions removed entirely, including the requirement that penalties, settlements, and excess licensing fees be deposited into the fund for tobacco cessation and prevention activities. Also removed the amendment to the Complex Litigation Special Fund that would have directed settlement monies to the Tobacco Trust Fund.

Municipal license fee increased from $110 to $150 (introduced version had it at $1,000). Municipal tobacco substitute endorsement fee increased from $50 to $75 (introduced version had it at $1,000). The Senate adopted much more modest fee increases.

Civil penalties for selling without a license increased substantially: first offense from $200 to $2,000, subsequent offenses from $500 to $5,000. These changes were retained from the introduced version.

Penalty for furnishing tobacco to persons under 21 increased from $100 to $150 for first offense (introduced version had it at $1,000). Penalty for a minor misrepresenting age increased from $50 to $100 (introduced version left it unchanged at $50).

Section 1014 removed, which had explicitly granted the Department of Liquor and Lottery the same enforcement powers for tobacco as it has for alcoholic beverages. Also removed a provision allowing disclosure of tax records to DOL for tobacco enforcement investigations.

New section 1002b created within chapter 40 requiring wholesale dealers to obtain a license from the Division of Liquor Control (previously under Department of Taxes authority in 32 V.S.A. section 7731). License fee is $1,245 per outlet. Includes provisions for revocation or suspension for noncompliance with multiple statutes.

Section 1013 prohibiting deceptive tobacco products removed, which had banned marketing products that imitate food, school supplies, portable devices, or characters appealing to minors, as well as concealing the nature of a product.

Section 1010 on internet and mail-order sales restrictions removed, which had prohibited shipping tobacco products ordered online to anyone other than a licensed dealer and imposed criminal penalties (up to 5 years imprisonment) for knowing violations.

New definitions added to chapter 40 for 'licensed wholesale dealer,' 'wholesale dealer,' 'wholesale dealer's license,' 'wholesale outlet,' and 'wholesale price,' moving these concepts from the tax code (32 V.S.A. section 7702) into the tobacco regulation chapter.

Bill title expanded from 'regulation of tobacco products and tobacco substitutes' to 'regulation and taxation of tobacco products and tobacco substitutes,' reflecting the addition of an entire tax framework.

New ad valorem tax on tobacco substitutes: 92% of wholesale price for products with nicotine concentration below 5 mg/g, and 100% of wholesale price for products at or above 5 mg/g. This is a significant new revenue source not present in the unofficial version.

Tobacco license fee increased from $110 to $1,000 per year; tobacco substitute endorsement fee increased from $50 to $1,000 per year. These are roughly 10x and 20x increases respectively.

New section 1015 directs all penalties, settlement monies, and excess licensing fees into a Tobacco Trust Fund (18 V.S.A. section 9502) for tobacco cessation and prevention activities. The Complex Litigation Special Fund is amended to exclude tobacco-related settlements.

Civil penalty for selling without a license increased from $200 (first offense) / $500 (subsequent) to $2,000 (first) / $5,000 (subsequent). Penalty for furnishing tobacco to a minor increased from $100 first offense to $1,000 first offense.

Wholesale dealer penalty for unlicensed sales increased from $25 first offense / $200 subsequent to $2,000 first offense / $5,000 subsequent (with a $25 minimum).

New section 1010 makes internet sales of tobacco products to unlicensed parties a criminal offense punishable by up to 5 years imprisonment and/or $5,000 fine, plus civil penalties of up to $5,000 per shipment.

New section 1009 establishes contraband seizure authority and requires seized tobacco products to be destroyed at the violator's expense in compliance with hazardous waste regulations. Vehicles used to transport contraband may be subject to forfeiture.

New section 1014 grants the Department of Liquor and Lottery the same enforcement powers for tobacco laws as it has for alcohol laws. Section 3102(e)(25) allows disclosure of tax records to the Department for tobacco enforcement purposes.

Penalty for a minor misrepresenting age to purchase tobacco increased from $50 to $100 (or up to 10 hours community service, or both).

New section 1013 prohibits marketing tobacco products or substitutes that imitate candy, school supplies, portable devices, or characters appealing to minors, and bans concealing the nature of the product.

New tax stamp requirements for tobacco substitutes (sections 7772, 7774, 7775) requiring wholesale dealers to affix stamps as evidence of tax payment, with retail dealers required to affix stamps within 24 hours of receiving unstamped products.

New definitions added in 32 V.S.A. section 7702 including 'manufacturer,' 'other tobacco products' (broadly defined to include nicotine-containing products sold as substitutes), and cross-reference for 'tobacco substitute.'