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Effective December 1, 2019, a new 20% supplemental sales tax will apply to retail sales of vapor products in New York. The tax is collected by a vapor products dealer. Beginning on December 1, 2019, any business that intends to sell vapor products must be registered as a vapor products dealer before making sales of vapor products.
Who must register
Any business currently selling vapor products at retail must be registered with the Tax Department as a vapor products dealer before December 1, 2019. Businesses that intend to sell vapor products must register before they begin selling these products. The nonrefundable application fees for a Vapor Products Dealer Certificate of Registration are:
- $300 for each retail or online location
- $300 for each vending machine
A Vapor Products Dealer Certificate of Registration is valid for the calendar year for which it is issued. It must be renewed annually and applications for renewal must be filed on or before September 20 of each calendar year.
Note: If you sell cigarettes and tobacco products, you must also register as a vapor products dealer if you make retail sales of vapor products. Form DTF-720, Retail Dealer Certificate of Registration for Cigarettes and Tobacco Products and/or Form DTF-721, Vending Machine Registration Certificate for Cigarettes and Tobacco Products does not allow you to sell vapor products.
How to register
To register with the Tax Department, you must complete an online application and obtain a Vapor Products Dealer Certificate of Registration for each retail location, online location or vending machine where vapor products are sold.
If you are not a registered sales tax vendor, you must register for sales tax before registering as a vapor products dealer. You can apply to register for sales tax through New York Business Express. For more information, see Tax Bulletin How to Register for New York State Sales Tax (TB-ST-360).
Once you are registered for sales tax, you can apply to register as a vapor products dealer.
- Log in to your Business Online Services account (or create one)
- Select the Services menu in the upper left-hand corner of your Account Summary homepage
- Select Registrations and account updates, then
- Select Vapor products registration from the expanded menu.
Once your application for registration is approved, the Tax Department will issue you:
- Form DTF-720.1, Retail Dealer Certificate of Registration for Vapor Products, and/or
- Form DTF-721.1, Vending Machine Registration Certificate for Vapor Products.
A vapor products dealer has all the same obligations and rights as a sales tax vendor, including but not limited to:
- obtaining a Certificate of Authority;
- collecting tax, filing returns, and remitting tax due;
- the right to accept a certificate or other documentation substantiating an exemption or exclusion from tax; and
- the right to receive a refund authorized by the Tax Law.
If the information reported in connection with your application for registration changes, you must update the information in your Business Online Services account by the last day of the month in which the change occurred.
A vapor products dealer must separately state on the customer's receipt the 20% supplemental sales tax. In addition, a vapor products dealer must only charge sales tax on the retail price of the vapor product. The 20% supplemental sales tax is not included in the receipt subject to sales tax.
The supplemental sales tax on vapor products is reported and paid with your applicable sales tax returns.
The use tax on vapor products is due within 20 days of such use or, where applicable, on the due date of the sales tax return for the period in which the taxable use occurred.
The supplemental sales tax on retail sales of vapor products does not apply to purchases made by:
- The state of New York and its agencies and instrumentalities;
- The United States of America and its agencies and instrumentalities;
- The United Nations;
- Indian nations or tribes.
Any person, including a vapor products dealer, that sells vapor products at an unregistered location or while a registration for such retail location is suspended or revoked, may be subject to a civil fine and suspension or revocation of its Vapor Products Dealer Certificate(s) of Registration. The following penalties may apply:
- First violation: A civil fine of $5,000 to $25,000 and suspension of a Vapor Products Dealer Certificate of Registration for up to 6 months.
- Second or subsequent violation within 3 years of a prior violation: A civil fine of $10,000 to $35,000 and suspension of a Vapor Products Dealer Certificate of Registration for up to 36 months.
If a third violation occurs within 5 years of a prior violation, the Tax Department may refuse to issue a Vapor Products Dealer Certificate of Registration; and/or revoke all certificate(s) of registration issued to each place of business owned or operated by the vapor products dealer, for a period of up to 5 years.
Vapor product means noncombustible liquids and gels (with or without nicotine) that are manufactured into a finished product for use in an electronic cigarette, cigar, cigarillo, or pipe, vaping or hookah pen, or similar device. Vapor products do not include any product approved by the United States food and drug administration as a drug or medical device or manufactured and dispensed as medical marijuana1.
Vapor products dealer means a person issued a Certificate of Registration by the Commissioner of Taxation and Finance.
1 Public Health Law, Article 33, Title 5-A