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STATE OF OKLAHOMA
2nd Session of the 60th Legislature (2026)
HOUSE BILL 4456 By: Newton
AS INTRODUCED
An Act relating to revenue and taxation; creating the
Vapor Products Tax Code; defining terms; establishing
excise tax on wholesale costs on e-liquid; providing
for payment of excise tax; establishing how excise
tax is to be remitted and paid; declaring person
collecting and remitting excise tax to be an agent of
the state; providing for an assumption that all e-
liquid delivered to a retailer in this state shall be
used and consumed in this state; requiring the sale
of e-liquids to continue to be subject to sales tax;
declaring excise tax to be a direct tax upon the
ultimate retail consumer; requiring copies of
invoices to be retained for a certain period;
allowing the Oklahoma Tax Commission to inspect such
invoices; providing for allocation of revenue derived
from excise tax; creating revolving fund; providing
for codification; and providing an effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1550 of Title 68, unless there
is created a duplication in numbering, reads as follows:
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This act shall be known and may be cited as the "Vapor Products
Tax Code".
SECTION 2. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1551 of Title 68, unless there
is created a duplication in numbering, reads as follows:
A. As used in this act:
1. "Commission" means the Oklahoma Tax Commission; and
2. "E-liquid" means a liquid that may contain nicotine,
flavorings, or other ingredients that are intended for use in a
vapor product.
SECTION 3. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1552 of Title 68, unless there
is created a duplication in numbering, reads as follows:
A. For the purpose of providing revenue for the support of the
functions of state government, there is hereby levied an excise tax
of thirty percent (30%) of the wholesale cost on all e-liquid
imported or manufactured, for sale, use or distribution, or used or
possessed in this state.
B. The excise tax levied under subsection A of this section
shall be paid as follows:
1. Payment of such tax shall be made by the manufacturer,
distributor, or retailer who first receives the product in the
state; and
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2. Due and payable excise taxes levied by this section shall be
remitted electronically simultaneously with a tax return
electronically filed with the Oklahoma Tax Commission using
procedures prescribed by the Commission. The tax returns shall be
made under oath by the person liable for the tax on forms prescribed
and provided by the Commission and shall be accompanied by payment
of the taxes due and any additional sums due as provided by this
section. Tax returns and payment of excise tax and other sums due
shall be electronically filed with the Commission no later than the
fifteenth day of the month immediately succeeding the month of
shipment, importation, or first sale of the e-liquids as provided in
paragraph 1 of this section.
C. For the purpose of collecting and remitting the excise tax
imposed under this section, the person liable for such tax is hereby
declared to be an agent of the state for such purposes.
D. The Commission shall consider it a presumption that all e-
liquids delivered to a retailer in this state shall be used and
consumed within this state.
E. The retail sale of e-liquids shall continue to be subject to
the tax levied by Section 1355 of Title 68 of the Oklahoma Statutes.
SECTION 4. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1553 of Title 68, unless there
is created a duplication in numbering, reads as follows:
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The excise tax levied by this act is hereby declared and
intended to be a direct tax upon the ultimate retail consumer of e-
liquids in this state, and when such tax is paid by, or collected
from, any other person, as herein provided for, such payment shall
be considered as an advance payment for convenience and facility
only, and such tax shall thereafter be added to the price of such e-
liquid and recovered from the ultimate retail consumer thereof.
SECTION 5. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1554 of Title 68, unless there
is created a duplication in numbering, reads as follows:
Copies of all invoices for the purchase or sale of any e-liquids
shall be retained by each manufacturer, distributor, and retailer
for a period of not less than three (3) years from the date of such
transaction. Upon the request of the Oklahoma Tax Commission, such
documents, in physical or electronic form, shall be made available
to the Commission for inspection by the Commission and its
authorized agents, provided such requests occur during the normal
business hours of the manufacturer, distributor, or retailer.
SECTION 6. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1555 of Title 68, unless there
is created a duplication in numbering, reads as follows:
All revenue accruing from the excise tax levied by Section 3 of
this act shall be collected by the Commission and distributed as
follows:
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1. For fiscal years ending on or prior to June 30, 2028:
a. fifty percent (50%) to the Vapor Products Regulation
Revolving Fund created pursuant to Section 7 of this
act, and
b. fifty percent (50%) to the General Revenue Fund;
2. For fiscal years beginning on or after July 1, 2028:
a. seventy-five percent (75%) to the General Revenue
Fund, and
b. twenty-five percent (25%) to the Vapor Products
Regulation Revolving Fund created pursuant to Section
7 of this act.
SECTION 7. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1556 of Title 68, unless there
is created a duplication in numbering, reads as follows:
There is hereby created in the State Treasury a revolving fund
for the Alcoholic Beverage Laws Enforcement Commission to be
designated the "Vapor Products Regulation Revolving Fund". The fund
shall be a continuing fund, not subject to fiscal year limitations,
and shall consist of all monies designated for deposit in the fund
by law. All monies accruing to the credit of said fund are hereby
appropriated and may be budgeted and expended by the Alcoholic
Beverage Laws Enforcement Commission for the purpose of regulating
vapor products as required by law. Expenditures from said fund
shall be made upon warrants issued by the State Treasurer against
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claims filed as prescribed by law with the Director of the Office of
Management and Enterprise Services for approval and payment.
SECTION 8. This act shall become effective January 1, 2027.
60-2-14076 AO 01/05/26