States’ laws for internet e-cigarette sales
Let us start by stating what should be obvious. Please do not misconstrue opinions or information you read on this high-risk payments and e-commerce website, or on any other website, as legal advice. If you own a business, you probably need an attorney, if you sell a product that is under the scrutiny that the vaping industry is under you certainly do. We offer payment acceptance advice, vape friendly payment gateways, merchant account recommendations, chargeback mitigation, and cash flow funding recommendations, not legal advice. We have though, gathered a lot of information below on state laws that could be very informative for a new vape or e-juice merchant looking to sell online.
NOTE: Due to the sweeping changes caused by Congress passing the Jenkins/PACT Act, we feel that all new and established online vape merchants must sit with a qualified attorney before shipping any products online.
Electronic cigarettes have been the source of much debate in legislatures around the country, with state governments scrambling to determine how these popular new alternatives to traditional cigarettes will be treated and regulated. Many states have seemingly declared them to be tobacco products due to the fact that the nicotine in the devices is derived from that plant. Other states classify them separately, exempting them from the restrictions enacted by the tobacco laws.
As if this weren’t confusing enough, regulations on internet sales can be even hazier. Most state laws regarding e-cigarettes pertain to physical retailers and distributors. But some states are starting to directly regulate the online sale of electronic cigarettes in order to close the loopholes some feel minors use to purchase vapor products. Before you ship to any state, make sure you consult with an attorney who knows that state’s laws regarding internet sales as well as those of your own.
Please note that these laws are changing every day and new legislation is already pending in some states. Also, recognize that we are not lawyers and do not intend this to be legal advice. Always talk to an attorney for help interpreting and applying these complex laws. We hope you find the information below helpful.
All set with the legal mumbo jumbo and looking to skip ahead and get set up with a payment gateway?
Sample laws regulating internet sales
E-Retailers with customers from Idaho must obtain a state permit and require age verification and payment with a credit card in the customer’s name and with a billing address that matches the shipping address. They must ship the product by a carrier who offers age verification at the door and affix a label to the package with the following text:
“TOBACCO PRODUCTS: IDAHO LAW PROHIBITS SHIPPING TO INDIVIDUALS UNDER THE AGE OF EIGHTEEN YEARS, AND REQUIRES THE PAYMENT OF TAXES PURSUANT TO CHAPTER 25, TITLE 63, IDAHO CODE. PERSONS VIOLATING THIS MAY BE CIVILLY AND CRIMINALLY LIABLE.”
Additionally, they must also keep records of each sale, including the customer’s name and address, the brand(s) of the products sold and the quantity sold, and submit these records by the 10th of each month to both the health department and the Idaho State Tax Commission. They must also collect and pay all applicable state taxes
All Internet merchants must use an independent, third-party age verification service to confirm their customers are over 18 before processing an order.
Merchants wanting to do business in Indiana need to apply for a one-year state tobacco license and pay all state taxes.
Businesses accepting orders from Kansans may need to obtain a Kansas tobacco license and pay all applicable taxes, including affixing a Kansas cigarette tax stamp to each package. Before any remote order can be finalized, the customer must provide proof of age, guarantee that the e-cigarettes are not for use by a younger person, and sign a statement certifying his age, address, and understanding that signing another person’s name as well as buying or selling cigarettes to a minor is against state law.
Unless the customer sends a photocopy of his government-issued photo ID, all businesses must use age-verification software to ascertain age.
It appears as though all packages must have the word “cigarettes” printed on all sides of the package and the following notice on the same side as the address:
“IF THESE CIGARETTES HAVE BEEN SHIPPED TO YOU FROM A SELLER LOCATED OUTSIDE OF THE STATE IN WHICH YOU RESIDE, THE SELLER HAS REPORTED PURSUANT TO FEDERAL LAW THE SALE OF THESE CIGARETTES TO YOUR STATE TAX COLLECTION AGENCY, INCLUDING YOUR NAME AND ADDRESS. YOU ARE LEGALLY RESPONSIBLE FOR ALL APPLICABLE UNPAID STATE TAXES ON THESE CIGARETTES.”
All documents relating to internet e-cigarette sales to Kansans must contain a cigarette dealer license number, Kansas sales tax registration number, and the business name and address.
Direct shipments of e-cigarettes to consumers appear to be prohibited in Maine. Shipments may be made to licensed tobacco retailers, however, and some retailers will place special orders for their customers.
Texas is a prime example of how controversial e-cig legislation has been and the types of laws that have been considered in the past and may be considered in the future by other states that do not currently regulate e-commerce.
According to recently-enacted legislation, Internet merchants must use age-verification software to confirm that the customer is over 18 and ship all packages with paperwork stating the following:
“E-cigarette sales to individuals younger than the age prescribed by Section 161.082 are illegal under state law, and e-cigarette sales are restricted to individuals who provide verifiable proof of age in accordance with Section 161.453.
LAW PROHIBITS SHIPPING TO INDIVIDUALS YOUNGER THAN 18 YEARS OF AGE AND REQUIRES PAYMENT OF ALL APPLICABLE TAXES.”
Businesses the primarily sell e-cigarettes are not required to ship by a method that requires an adult signature, but businesses that sell a mix of regular and e-cigarettes may be required to do so.
These restrictions are considerably less than what was originally proposed, however. According to the original bill, all e-cig merchants would have been required to use shipping that required an adult signature (with its $6 surcharge); keep records of each transaction that would include customer names, addresses, phone numbers, e-mails, what they purchased, and how much and file these records each month; and require a photocopy of a government-issued photo ID. In addition, a 10% fee would have been levied on any outdoor advertisements, restricted such ads to more than 1,000 feet away from a church or school, and allowed for municipal laws to preempt state law, making legal compliance a question for each shipment.
What if my state does not regulate e-commerce?
Even states that do not specifically regulate internet sales ban the sale of vaping devices to minors. However, even here, definitions vary. Although 18 is the most common age of majority, in some states, such as Alabama, a person is a minor until 19. Beginning on January 1, 2016, Hawaiians must be 21 to purchase any tobacco product (including vapor devices). The best rule of thumb is to know the tobacco laws for each state and abide by them except in cases where alternative laws regulating e-commerce exist. If in any doubt, consult an attorney.
PLEASE NOTE: The information and materials on this page/site are provided for general informational purposes only and are not intended to be legal advice. The law changes frequently and varies from jurisdiction to jurisdiction. Being general in nature, the information and materials provided may not apply to any specific factual and/or legal set of circumstances.
Support for online e-cigarette merchants
Although legal concerns are unavoidable, other concerns, including how to find a payment gateway processing combo that works for your online vape store should not be. Tasker Payment Gateways offers vape friendly payment gateway solutions and merchant account recommendations for all common carts including WooCommerce and Shopify that will help you expand your business profitably. Please follow our social media and check our blog regularly as these topics are fast-moving and ever-changing.