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Last Updated: 7/23/2014

E-cigarettes

An electronic cigarette or e-cigarette is a device that simulates smoking tobacco. In Minnesota, e-cigarettes and e-juice which contain nicotine derived from tobacco meet the definition of a tobacco product found in (Minnesota Statutes, section 297F.01, subdivision 19). 

E-cigarettes are Taxable

E-cigarettes and e-juice are considered tobacco products and are subject to the Tobacco Tax, which is currently 95% of the wholesale cost of any product containing or derived from tobacco. For example, the Tobacco Tax on an e-cigarette starter kit is calculated on the total cost unless the nicotine cartridges are sold separately and then the tax would only be on the nicotine cartridge value. Similarly, a disposable e-cigarette may have the tax calculated on its nicotine cartridge value if the cartridge is replaceable.

Printable handout: E-cigarettes are Taxable in Minnesota

​Item

​Taxable or Not Taxable?

​One time use e-cigarette

​Taxable

​Reusuable/refillable device & components

​Not Taxable

​Cartridges/e-juice containing nicotine

​Taxable

​Cartridges/e-juice with 0% nicotine

​Not Taxable

 

E-cigarettes in Minnesota

​I am a…

​So I...

​If I don't, then...

Distributor

​Pay Tobacco Tax on all e-cigarette purchases that contain nicotine derived from tobacco.

​I will be assessed tax, penalty and interest on any unreported purchases. My license from the commissioner of revenue may be revoked. I may be criminally prosecuted.

Retailer

​Purchase e-cigarettes from distributors licensed by the State of Minnesota. Collect and remit sales tax on e-cigarette sales.

​My e-cigarette products could be seized as contraband or I could be assessed tax, penalty and interest. My license from the county or city government may be revoked.

I may be criminally prosecuted.

Consumer

​Pay Tobacco Consumer Use Tax on all e-cigarettes that are not purchased through a retailer located in Minnesota. This includes e-cigarettes purchased online See Tobacco Consumer Use Tax.

​I will be assessed tax, penalty and interest as information on my purchase becomes available to the commissioner of revenue.

I may be criminally prosecuted.

​County or city government

​License retailers who sell e-cigarettes and e-juice.