Utah permits remote cigar and pipe tobacco sales starting in 2027

Retailers may sell cigars and pipe tobacco remotely when they meet the law's requirements. These rules cover consumer orders placed while the seller and buyer are apart, followed by delivery or receipt while they are apart. Specified sales between tobacco dealers are excluded. Sellers must meet licensing, bond, reporting, and applicable tax requirements. An independent service must check the buyer's age and identity. Someone at least 21 must sign for delivery and take possession. This permission excludes little cigars and other tobacco or nicotine products. In-person sales require the appropriate separate license. The law takes effect on January 1, 2027.

The state tax commission issues remote sales licenses and requires sellers responsible for collecting tobacco tax to post a bond, a guarantee securing tax payments. Each license covers one selling facility. The commission may deny or revoke it for violations, unmet requirements, false applications, or another state's revocation of a tobacco or nicotine sales license. Retailers with a tobacco sales license under Section 59-14-301 do not need another remote sales license. A bond under that section also avoids an additional bond. The minimum bond is $500. Combined bonds for specified other tobacco sales licenses have minimums of $1,000 or $1,500. The remote license lasts three years and has no fee unless S.B. 210 also becomes law. If it does, the license lasts one year and costs $250 to issue or renew. Licensing and bond rules begin January 1, 2027. The conditional license term and fee also begin that day.

Covered remote sales carry a tobacco tax equal to 86% of the price the retailer paid. Buyers of untaxed cigars or pipe tobacco must report and pay the tax. Nonresidents bringing products into Utah for their own use while visiting are exempt from that duty. Revenue goes to the state's General Fund. The tax applies only if the product was not already taxed under Section 59-14-302. Both tobacco taxes cannot apply to the same covered sale. If the retailer's actual cost is unavailable, the tax uses its annually certified average cost for that item. Sellers meeting the referenced sales-tax collection requirements collect the tobacco tax at purchase and send it to the state quarterly. Applicable sales taxes also apply. Sellers must provide itemized invoices, keep them for three years, and keep purchase records supporting the tax calculation. Buyers must keep tax records for three years after filing their statements. Tax rules begin January 1, 2027. Buyers must report and pay by the last day of the month following the purchase month. Sellers file and pay quarterly by the last day of April, July, October, and January.

Making a remote cigar or pipe tobacco sale without following these requirements is a criminal offense. The criminal penalty applies to anyone making a remote cigar or pipe tobacco sale without complying with these rules. Separate tax penalties and interest apply when a person fails to pay the required tax, pays late, or fails to file a required return. The criminal penalty takes effect on January 1, 2027.