When a distributor sells a cartridge, bottle, or other package of a solution containing nicotine as part of a kit that also includes a product, device, component, part, or accessory, the wholesale sales price is generally the price the distributor paid for the entire kit.
However, if the distributor sells the same exact cartridge, bottle, or other package of solution containing nicotine separately from the kit and can isolate the cost of the cartridge, bottle, or other package of solution containing nicotine, then the kit is taxed on the wholesale sales price of the separately sold solution containing nicotine as well as any federal excise taxes, freight charges, or packaging costs, regardless of whether they were included in the purchase price.
Examples
- A tobacco distributor sells a vaping starter kit to retailers that includes a bottle of a solution containing nicotine and a vaping device. The distributor does not sell the same exact bottle of solution containing nicotine separately from the kit. The Tobacco Tax is calculated on the price at which the distributor purchased the kit along with any applicable taxes, charges, and costs.
- A tobacco distributor sells a vaping starter kit to retailers that includes a cartridge of a solution containing nicotine and a vaping device. The distributor sells the same exact cartridge of solution containing nicotine separately from the kit and can isolate the cost of the separately sold cartridge of solution containing nicotine. The kit is taxed on the wholesale sales price of the separately sold cartridge along with any applicable taxes, charges, or costs.
Additional examples:
Item |
Subject to Tobacco Tax |
---|
One-time use e-cigarette that contains nicotine |
Yes |
Reusable or refillable device only and sold separately from starter kit |
No |
Cartridges or e-juice containing nicotine |
Yes |
Cartridges or e-juice with no nicotine |
No |