South Dakota law limits direct nicotine shipments to consumers

People selling nicotine products in South Dakota for resale must get a license for each business location. The license covers a person selling nicotine products in South Dakota for resale. A separate license is required for each business location selling them. Licensed distributors and wholesalers under chapter 10-50 do not need this license. Distributor applicants must pay a $1,000 fee, hold a South Dakota sales and use tax license, and be current on applicable state and local taxes. A distributor license generally runs from July 1 through June 30. It remains valid for up to three extra days if the department has a new application before the current license expires.

Retailers may buy or receive nicotine products only from specified licensed sellers. The rule applies to retailers buying or receiving nicotine products. Products may come from a licensee under this chapter or a distributor or wholesaler licensed under chapter 10-50. A violation is a Class 2 misdemeanor.

Sellers and distributors may not ship nicotine products directly to South Dakota consumers, except where the law allows it. The rule applies to people selling or distributing nicotine products from inside or outside South Dakota when shipping directly to consumers in the state. The exception covers alternative nicotine products, not vapor products. The exception allows licensed sellers to ship alternative nicotine products if they verify the buyer is at least 21, take payment in the buyer's name, and require an adult signature at delivery. The seller must hold a South Dakota sales and use tax license, label the package, keep buyer information, and pay applicable taxes. The product must be for personal use, not resale. Other exceptions under chapter 10-50C also apply.

The law sets recordkeeping duties and penalties for distributors and people who break the direct-shipping rules. The recordkeeping duty applies to nicotine product distributors. Civil penalties apply to violations of the direct-shipping rules, including attempted shipments. Distributors must keep manufacturer and sales records for at least three years, allow inspection, and provide copies on request; violating this duty is a Class 2 misdemeanor. The attorney general may bring a civil case over a direct-shipping violation. A court may order other relief as well as a penalty. Other legal penalties and tax collection may also apply. The three-year recordkeeping period applies to distributor records. Each shipment, transport, or attempted shipment or transport in violation of the direct-shipping rules is a separate violation.