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Demo: Vapor Retailer Registration
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.
What products does this supplemental sales tax apply to? Specifically, e-liquids or all vape products and hardware?
E-liquid is subject to the supplemental sales tax regardless of whether it is sold separately or together with the battery and/or charger. If the battery and/or charger are sold separately from the e-liquid, the battery and charger are not subject to the supplemental sales tax imposed on vapor products.
Will this tax be on all liquids regardless of whether it is an Ends Product? CBD liquid? Vitamin Liquids? E-Cigarettes?
Yes. The supplemental sales tax applies to all noncombustible liquids or gels, regardless of the presence of nicotine therein, that is manufactured into a finished product for use in an electronic cigarette, electronic cigar, electronic cigarillo, electronic pipe, vaping pen, hookah pen or other similar device. "Vapor product" shall 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 marijuana under Title 5-A of Article 33 of the Public Health Law.
See Title 5-A of Article 33 of the Public Health Law.
Will the vapor product supplier collect prepaid sales tax to claim as a credit on the sales tax return?
No. There is no pre-paid sales tax for vapor products.
No. Sales tax is not charged on the 20% supplemental sales tax. The supplemental sales tax is only applied to the retail price of the vapor product and will be listed separately on the customer’s receipt.
Example: Customer A purchases a vapor product from XYZ Vaping Co., a registered vapor products dealer, for $10. The sales tax and supplemental sales tax due on the vapor product are computed as follows:
Sales price of vapor product $10.00
Sales tax due at 8% .80
Supplemental sales tax due at 20% 2.00
Total amount due for the vapor product $12.80
See TSB-M-19(3)S, Vapor Products Dealer Registration and Filing Requirements, for more information.
If the item is on sale at a reduced price or purchased with a store coupon issued by the seller, the supplemental sales tax is charged on the reduced price.
If the reduced price is the result of a manufacturer's reimbursement, such as a manufacturer's coupon or rebate or any other third-party's reimbursement, then the supplemental sales tax is due on the full amount received by the seller, whether from the purchaser or a third- party.
See Tax Bulletin Coupons and Food Stamps (TB-ST-140)
No. Tax professionals will not be able to apply on behalf of their client.
If I am a tax professional, can I still file the vapor products section of my client's sales tax return?
Yes, if you are authorized to do so.
If you report the supplemental sales tax on vapor products do you have to file quarterly if you currently are an annual tax filer?
No, you can remain an annual filer if the total tax due does not exceed $3,000 for the annual period in which the return is filed.
If a vaping business continues to file sales tax annually (along with filing the vapor tax annually) does the vapor tax become part of the tax amount for purposes of determining annual filing?
Yes, the supplemental sales tax on vapor products becomes part of the total tax due for purposes of determining the $3,000 threshold for annual filing.
If an existing business has had its tobacco retailer registration suspended or revoked for sales to minors, will it be prohibited from registering as a vapor products dealer?
A certificate of registration may not be issued to a person who has had a license issued under the Tax Law revoked within 1 year from the date on which the application for a Vapor Products Dealer Certificate of Registration was submitted to the Tax Department. If the applicant’s license was suspended based on a criminal conviction under the Tax Law within 1 year from the date in which the application for a Vapor Products Dealer Certificate of Registration was filed with the Tax Department, the commissioner may refuse to issue a Vapor Products Dealer Certificate of Registration to that person.
1 Public Health Law, Article 33, Title 5-A