Frequently Asked Questions - Tobacco Tax

Effective January 1, 2020, the Tobacco Tax under RSA 78 is imposed on electronic cigarettes (or "e-cigarettes," among other names), particularly on the liquids or other substances containing nicotine that are intended to be used with or in such devices.

Every manufacturer, wholesaler, retailer, and sampler in the business of selling or distributing e-cigarettes in New Hampshire must register with the New Hampshire Secretary of State, obtain a license issued by the New Hampshire Department of Revenue Administration (DRA) or the New Hampshire Liquor Commission, as applicable, and otherwise comply with the Tobacco Tax Law (RSA 78:6, effective January 1, 2020).

All manufacturers and wholesalers must apply for a Tobacco Tax License by filing Form DP-31, "Application for Tobacco Tax License," with the DRA. All retailers and samplers must apply to the Liquor Commission: https://www.nh.gov/liquor/enforcement/ .

Technical Information Release (TIR) 2019-008: Electronic Cigarettes Taxable under the RSA 78 Tobacco Tax Effective January 1, 2020

• What is the Tobacco Tax?
• What is the Tobacco Tax rate?
• Who pays the tax?
• How is the tax paid?
• When does a wholesaler file the Form DP-151 and pay the tax?
• Who needs a Tobacco License?
• Where does a licensed wholesaler buy Tobacco Tax Stamps?
• Is there a Tobacco Tax on cigars?
• Is there a tax on cigarettes I buy on the Internet?
• Who do I contact with questions?

What is the Tobacco Tax?

It is a tax on all tobacco products other than premium cigars sold to consumers in this state under RSA Chapter 78 and NH Code of Administrative Rules, Rev 1000. Tobacco products include, but are not limited to, cigarettes, little cigars, electronic cigarettes (or "e-cigarettes" , among other names), loose tobacco, smokeless tobacco and cigars.

What is the Tobacco Tax rate?

• The tax rate for each package containing 20 cigarettes or little cigars is $1.78 per package.
• The tax rate for each package containing 25 cigarettes or little cigars is $2.23 per package.
• The tax rate for closed system e-cigarettes is $0.30 per milliliter on the volume of the liquid or other substance containing nicotine as listed by the manufacturer (effective January 1, 2020).
• The tax rate for open system e-cigarettes is 8% of the wholesale sales price of the container of liquid or other substance containing nicotine (effective January 1, 2020).
• The tax rate for all other tobacco products (OTP), except premium cigars, is 65.03% of the wholesale sales price.

Who pays the tax?

All taxes upon tobacco products are direct taxes upon the consumer at retail and when purchased from a licensed retailer are conclusively presumed to be pre-collected by the wholesaler who shipped or transported the tobacco products to a retailer in this state (RSA 78:2, III).

How is the tax paid?

A wholesaler shall demonstrate that it paid the tax due on cigarettes and little cigars by affixing stamps purchased from the Department to each package of 20 or 25. Since the tax is paid when the wholesaler purchases the stamps, to report the cigarettes and little cigars that have been stamped, resident wholesalers are required to file Form AU-202, "Resident Wholesaler Cigarette Tax Report" and non-resident wholesalers are required to file Form AU-201, "Non-Resident Wholesaler Cigarette Tax Report". Forms AU-201 and AU-202 are available online or by calling the Department's Forms Line at (603) 230-5001. If little cigars are sold in packages other than 20 or 25 sticks, the wholesaler is required to file on a monthly basis Form DP-151, "Wholesalers' Other Tobacco Product Tax Return", to report the number of sticks sold and pay the tax due.

A wholesaler shall demonstrate that it paid the tax due on tobacco products other than cigarettes and stamped little cigars by filing on a monthly basis Form DP-151 , including an accounting of all such tobacco products transferred to and from any premises in this state (effective January 1, 2020), and paying the tax due. Form DP-151 is available online or by calling the Department's Forms Line at (603) 230-5001.

When does a wholesaler file the Form DP-151 and pay the tax?

All wholesalers are required to report and pay the tax due on tobacco products other than cigarettes and stamped little cigars on a monthly basis by filing Form DP-151. Both the DP-151 and payment are due on or before the 15th day of the month following the end of the reporting period.

Who needs a Tobacco License?

Manufacturers and Wholesalers

• Every manufacturer and wholesaler shall obtain a Tobacco Tax license from the New Hampshire Department of Revenue Administration before engaging in the business of selling or distributing tobacco products in this state.
• A wholesaler must have a separate license for each location.
• License Fees:
  • Manufacturer's license - $100
  • Wholesaler's license - $250
• Tobacco Tax licenses expire on June 30 of each even-numbered year.
• Form DP-31, "Application for Tobacco Tax License",is available online or by calling the Department's Form Line at (603) 230-5001.

Retailers and Samplers

• Every retailer (including vending machine operators) and sampler shall obtain a tobacco license from the New Hampshire Liquor Commission under RSA 178 before engaging in the business of selling or distributing tobacco products in New Hampshire.
• For more information on obtaining a tobacco license from the New Hampshire Liquor Commission, please contact their lincesing department at (603)271-3523 or visit their website at www.nh.gov/liquor/enforcement/licensing.

Note: All manufacturers and wholesalers selling cigarettes to consumers (whether directly, or through a distributor, retailer or similar intermediary or intermediaries) in the State of New Hampshire must register with the Attorney General's Office for purposes of the Master Settlement Agreement (MSA) as outlined in RSA 541-C. Please contact the Attorney General's Office at (603) 271-3641 or visit their website at www.doj.nh.gov/consumer/tobacco for more information.

Where does a licensed wholesaler buy Tobacco Tax Stamps?

A licensed wholesaler may purchase Tobacco Tax Stamps at the Department of Revenue Administration Collection Division located at:

New Hampshire Department of Revenue Administration
Governor Hugh Gallen State Office Park
109 Pleasant Street (Medical & Surgical Building)
Concord, NH 03302-1467

The Commissioner may permit a wholesaler to pay for stamps within 30 days after the date of purchase, provided the wholesaler files a bond with the Commissioner in an amount not less than the sale price of the stamps purchased conditioned upon payment for the stamps purchased. To open a credit account and charge purchases of stamps, wholesalers shall submit a written request to:

New Hampshire Department of Revenue Administration
Collections Division
PO Box 454
Concord, NH 03302-0454

The request shall be accompanied by:

• The wholesaler's most recent financial statement prepared in accordance with generally accepted accounting principles;
  
• The names, addresses and telephone numbers of 3 credit references; and
  
• A completed Form CD-18, "Tobacco Tax Credit Bond".

Form CD-18 is available online or by calling the Department's Forms Line at (603) 230-5001.

The NH Department of Insurance publishes a list of Licensed Surety Companies licensed to issue a surety bond in New Hampshire at: www.nh.gov/insurance/companies.

Is there a Tobacco Tax on cigars?

Yes, The Tobacco Tax is also imposed on cigars, except "premium cigars". "Premium cigars" are cigars which:

• Are made entirely by hand of all natural tobacco leaf;
• Are hand constructed and hand wrapped;
• Weigh more than 3 pounds per 1,000 cigars; and
• Are kept in a humidor.

The Tobacco Tax is imposed on cigars which do not meet the definition of "premium cigar" or "little cigar" (also a "cigarette" under RSA 78) at the OTP rate. For more information, See TIR 2013-002 .

Is there a tax on tobacco products purchased on line?

Online Tobacco Purchases

A consumer who purchases, imports, receives, or otherwise acquires tobacco products without evidence of tax paid is responsible for paying the tax directly to the New Hampshire Department of Revenue Administration by filing Form AU-215, "Consumer Tobacco Products Tax Return". this return shall be filed on or before the last day of the month following each month in which the consumer acquires such tobacco products.

Form AU-215 is available online or by calling the Department's Form Line at (603) 230-5001.

Who do I contact with questions?

Call the Department's Tobacco Tax Group at (603) 230-4359 or write to the NH DRA, Tobacco Tax Group, PO Box 1388, Concord, NH 03302-1388.

Note: If calling to inquire about the purchase of Tobacco Tax Stamps, please contact the Collections Division at (603) 230-5900.