What is a Tobacco License and why you need to obtain it?
Before selling, any Tobacco Product, you must obtain a License or permit that allows you to sell the tobacco products.
License is a permit that is allowing you to start or continue your business activities legally within the jurisdiction provided by the license. It is an NOC that permits you to buy and sell Tobacco products within the area mentioned in the license certificate.
Which authority is responsible to issue a license?
You can apply to the State of Massachusetts, Government site for obtaining the license, provided you submit complete details and information required by the State.
What are the requirements to fulfill before obtaining a license?
- You are required to submit the details about your business and fill the forms available on the State, the department of revenue website.
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For Retailers: No need to fill paper form, create an online account on MassTaxConnect, register your business and provide the required Information. Alternatively, you may download Form CT-RL from the state site which is an application for the Retailers’ license for cigarettes, cigars and other tobacco products.
- For Wholesalers and Distributors: All distributors for Cigars and Smoking Tobacco in the State are required to Download Form CT-CDL (application for the Distributors’ License) from the Department of Revenue site and fill and submit it accordingly.
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All Wholesalers who hold a valid license to wholesale cigarettes in the State are also required to submit the Form CT-CDL to the Department of Revenue for a Distributor License.
- Form CT-CDL is required to be submitted along with the Form CT-CHL (checklist for distributor's license for selling tobacco products) and Form CT-PQ (online personal questionnaire).
What is Form CT-CDL:
It is an application for Distributors License for Selling cigars and tobacco products. It is issued by the Department of revenue, the State of Massachusetts. Following are some of the details you are required to provide for the license application:
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Your Legal name
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Your business Name
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Type of Business
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Your Complete business address
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Your Federal Employee Identification Number
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Details of your Tax return
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Date of Starting business in the State.
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Details of your Shareholders, Officers, Directors, Employees
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Details of Shareholdings
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Details of your tobacco products suppliers
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Details of your bank.
What other licenses or permits do I need to apply for?
You, being a retailer is required to apply for a local tobacco sales permit from the respective Board of Health of the city in addition to the tobacco license.
What is the Fee?
The tobacco license fee for retailers selling tobacco products is $ 50 in the State of Massachusetts.
What are the penalties for noncompliance with the License requirements?
A penalty amounting to $ 5000 for the first offense and $ 25000 for every subsequent offense will be imposed if you are not in compliance with the State requirements or commit the following offense:
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You sell, possess or offer tobacco products without having a tobacco permit or license.
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You, being a retailer, purchase tobacco products from a wholesaler or distributor who does not have a tobacco license to do the business.
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. You purchase or sale tobacco products from or to the wholesaler or distributor who is not licensed by the State of Massachusetts to do so.
What are the Taxation requirements in the State for Tobacco products:
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Following are the Tax rates on different tobacco products in the State of Massachusetts:
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Items
Tax rate
Cigarettes
$ 3.51 per pack of 20 cigarettes plus $ 0.53 sales tax per pack making it a total of $ 4.04 tax per pack .
Cigar & Other Smoking Tobacco
40% of Wholesale price.
Smokeless Tobacco
210% of the state excise of the wholesale price.
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The excise is required to be paid by the distributors of the tobacco products provided he mentions on all invoices that excise tax has been paid. If he fails to do so, retailers would assume that excise has not been paid and therefore would be liable to pay the tax.
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In addition to the above excise taxes, tobacco products in the State of Massachusetts is also subject to Federal Tobacco Excise Taxes at various rates.
- Federal Excise taxes are included in the total price of the tobacco products and are to be borne by the consumers.
- Late filing and late payment of fee for the return are subject to penalties prescribed by the Department of Revenue, State of Massachusetts.
