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ENGR. S. B. NO. 1102 Page 1
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ENGROSSED SENATE
BILL NO. 1102 By: Coleman and Frix of the
Senate
and
Roe of the House
An Act relating to vapor products; amending 63 O.S.
2021, Section 1-229.35, as amended by Section 1,
Chapter 95, O.S.L. 2022 (63 O.S. Supp. 2024, Section
1-229.35), which relates to vapor product
manufacturer attestation; defining terms; modifying
and adding requirements for certain attestation;
transferring certain duties to the Office of the
Attorney General; updating statutory language;
providing certain exemptions; requiring certain
notice; directing seizure of certain products;
providing date of certain withdrawal; prohibiting
certain sales; establishing certain penalties and
remedies for violations; imposing certain
requirements on nonresident of foreign manufacturer;
allowing certain compliance checks; promulgating
certain rules; directing certain funds; requiring
certain report; amending 68 O.S. 2021, Sections
400.1, as amended by Section 3, Chapter 285, O.S.L.
2023, 400.5, as amended by Section 4, Chapter 285,
O.S.L. 2023, 401, 414, 415, as amended by Section 2,
Chapter 285, O.S.L. 2023, 417, as amended by Section
5, Chapter 285, O.S.L. 2023, 420.1, and 422 (68 O.S.
Supp. 2024, Sections 400.1, 400.5, 415, and 417),
which relate to tobacco and vapor products; requiring
certain enforcement; updating statutory language;
updating statutory references; modifying certain
definitions; and declaring an emergency.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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SECTION 1. AMENDATORY 63 O.S. 2021, Section 1-229.35, as
amended by Section 1, Chapter 95, O.S.L. 2022 (63 O.S. Supp. 2024,
Section 1-229.35), is amended to read as follows:
Section 1-229.35. A. As used in this section:
1. “FDA” means the United States Food and Drug Administration;
2. “Timely filed premarket tobacco product application” means
an application pursuant to 21 U.S.C., Section 387j, for a vapor
product containing nicotine derived from tobacco marketed in the
United States as of August 8, 2016, that was submitted to the FDA on
or before September 9, 2020, and accepted for filing; and
3. “Vapor product” means a noncombustible product that contains
nicotine and that employs a mechanical heating element, battery,
electronic circuit, or other mechanism, regardless of shape or size,
that can be used to produce a vapor from a solution. Vapor product
includes any cartridge or other container with nicotine that is
intended to be used with an electronic cigarette, electronic cigar,
electronic cigarillo, electronic pipe, or other similar product or
device. Vapor product does not include any products regulated by
the FDA under Chapter V of the Federal Food, Drug, and Cosmetic Act.
B. Beginning July 1, 2023 2025, and annually thereafter, every
manufacturer of a vapor product that is sold or intended to be sold
for retail sale or to a consumer in this state, whether directly or
through a wholesaler, distributor, retailer, or similar intermediary
or intermediaries, shall execute and deliver an attestation under
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penalty of perjury to the Oklahoma Alcoholic Beverage Laws
Enforcement (ABLE) Commission Attorney General certifying that, as
of the date of such attestation form:
1. The vapor product was available for purchase in the United
States as of August 8, 2016, and the manufacturer has applied for a
marketing order for the vapor product by submitting a Premarket
Tobacco Product Application on or before September 9, 2020, to the
United States Food and Drug Administration (FDA) The manufacturer
submitted a timely filed premarket tobacco product application for
the vapor product to the FDA pursuant to 21 U.S.C., Section 387j,
and the application either remains under review by the FDA or has
received a denial order that has been and remains stayed by the FDA
or a court order, rescinded by the FDA, or vacated by a court; or
2. The manufacturer has received a marketing granted order or
other authorization for the vapor product from the FDA pursuant to
Section 387j of Title 21 of the United States Code.
B. The C. The manufacturer is not required to submit an
additional marketing granted order or premarket tobacco product
application for the vapor product because a change to the vapor
product merely reflects change to the name, brand style, or
packaging of a vapor product that is covered under paragraph 1 or 2
of subsection B of this section.
D. The attestation form shall separately list each brand name,
product name, flavor, and category including e-liquid, power unit,
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disposable vapor product, device, e-liquid cartridge, or e-liquid
pod for each vapor product that is sold in this state.
E. Each annual attestation form shall be accompanied by:
1. A copy of:
a. the marketing granted order issued by the FDA pursuant
to 21 C.F.R. 1114.31,
b. the acceptance letter issued by the FDA pursuant to 21
C.F.R. 1114.27, for a timely filed premarket tobacco
product application, or
c. the document issued by the FDA or by a court
confirming that the premarket tobacco product
application has received a denial order that has been
and remains stayed by the FDA or a court order,
rescinded by the FDA, or vacated by a court; and
2. A payment of Five Thousand Dollars ($5,000.00) the first time
the manufacturer submits an attestation form and a payment of Two
Thousand Five Hundred Dollars ($2,500.00) for each annual renewal
submission.
F. The information submitted by the manufacturer pursuant to
subsection C of this section shall be considered confidential
commercial or financial information for purposes of Section 24A.1 et
seq of Title 51 of the Oklahoma Statutes. The manufacturer may
redact certain confidential or commercial information provided under
paragraph 1 of subsection E and paragraph 2 of subsection J of this
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section. The Attorney General shall not disclose such information
except as required or authorized by law.
G. A manufacturer required to submit an attestation form
pursuant to this section shall notify the ABLE Commission Attorney
General within thirty (30) days of any material change to the
attestation form, including whether the FDA has issued or not issued
a market order or other authorization or has ordered the
manufacturer to remove the vapor product, either temporarily or
permanently, from the United States market the issuance or denial of
a marketing authorization or other order by the FDA pursuant to 21
U.S.C., Section 387j, or any other order or action by the FDA or any
court that affects the ability of the vapor product to be introduced
or delivered into interstate commerce for commercial distribution in
the United States.
C. The ABLE Commission
H. 1. No later than September 1, 2025, the Attorney General
shall develop a directory listing all of the manufacturers that have
provided attestations that comply with subsection A of this section
and all vapor products that are listed in such attestations. The
ABLE Commission shall:
1. Make the directory available for public inspection on its
website on or before October 1, 2023; and
2. Update the directory as necessary to correct mistakes and to
add or remove manufacturers or vapor products to maintain the
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directory in conformity with the requirements of this section
maintain and make publicly available on the Attorney General’s
official website a directory that lists all vapor product
manufacturers and all vapor products including brand names, product
names, flavor, and categories to include e-liquid, power unit,
disposable vapor product, device, e-liquid cartridge, or e-liquid
pod for which certification forms have been submitted and approved
by the Attorney General.
2. The Attorney General shall update the directory at least
monthly to ensure accuracy, and shall establish a process to provide
retailers, distributors, and wholesalers and other relevant parties
notice of the initial publication of the directory and changes made
to the directory in the prior month.
D. It shall be unlawful for any person, directly or indirectly,
to knowingly manufacture, distribute, sell, barter, or furnish in
this state any vapor product that is not included in the directory
I. No manufacturer or the manufacturer’s vapor products shall
be included or retained in the directory if the Attorney General
determines that any of the following apply:
1. The manufacturer failed to provide a complete and accurate
attestation form as required by this section;
2. The manufacturer submitted an attestation form that does not
comply with the requirements of subsections D and E of this section;
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3. The manufacturer failed to include with its certification
the payment required by subsection E of this section;
4. The manufacturer sold vapor products in this state required
to be certified under this act during a period when either the
manufacturer or the vapor product had not been certified and listed
on the directory; or
5. The information provided by the manufacturer in its
certification is determined by the Attorney General to contain false
information or contains material misrepresentations or omissions.
J. The Attorney General shall provide manufacturers notice and
an opportunity to cure deficiencies before removing manufacturers or
vapor products from the directory.
1. The Attorney General may not remove a manufacturer or its
vapor products from the directory until at least thirty (30) days
after the manufacturer has been given notice of an intended action.
Notice shall be sufficient and be deemed immediately received by a
manufacturer if the notice is sent either electronically or by
facsimile to an electronic mail address or facsimile number,
provided by the manufacturer in its most recent certification filed
under this section.
2. A manufacturer shall have fifteen (15) days from the date of
service of notice of the Attorney General’s intended action to cure
the deficiencies or establish that the vapor product manufacturer or
its vapor products should be included in the directory.
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3. Retailers shall have thirty (30) days following the removal
of a manufacturer or its vapor products from the directory to sell
such vapor products that were in the retailer’s inventory as of the
date of removal.
4. After thirty (30) days following removal from the directory,
the vapor products of a manufacturer identified in the notice of
removal and intended for retail sale in this state or to a consumer
in this state are subject to seizure from distributors and
retailers, forfeiture from distributors and retailers, and
destruction or disposal, and may not be purchased or sold for retail
sale in this state. The cost of such seizure, forfeiture, and
destruction or disposal shall be borne by the person from whom the
vapor products are confiscated.
5. The directory developed by the Alcoholic Beverage Laws
Enforcement (ABLE) Commission and published prior to the date of
enactment of this act shall be withdrawn on September 1, 2025, or on
the date the Attorney General first makes the new directory
available for public inspection on its website as provided in
subsection H of this section.
K. 1. Except as provided in paragraphs 2 and 3 of this
subsection, beginning September 1, 2025, or on the date that the
Attorney General first makes the directory available for public
inspection on its official website, whichever is later, vapor
products not included in the directory may not be sold for retail
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sale in this state or to a consumer in this state, either directly
or through an importer, distributor, wholesaler, retailer, or
similar intermediary or intermediaries.
2. Each retailer shall have sixty (60) days from the date that
the Attorney General first makes the directory available for
inspection on its public website to sell vapor products that were in
its inventory but not included in the directory or to remove those
vapor products from inventory.
3. Each distributor or wholesaler shall have sixty (60) days
from the date that the Attorney General first makes the directory
available for inspection on its public website to remove those vapor
products intended for retail sale in the state from its inventory.
4. After sixty (60) days following publication of the
directory, vapor products not listed in the directory and intended
for retail sale in this state or to a consumer in this state are
subject to seizure, forfeiture, and destruction or disposal, and may
not be purchased or sold for retail sale in this state except as
provided in this subsection and subsection J of this section. The
cost of such seizure, forfeiture, and destruction or disposal shall
be borne by the person from whom the products are confiscated.
L. The following penalties and remedies shall apply to
violations of this section:
1. A retailer, distributor, wholesaler, or importer who sells
or offers for sale a vapor product for retail sale in this state or
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to a consumer in this state that is not included in the directory
shall be subject to a civil penalty of Five Hundred Dollars
($500.00) for each individual vapor product offered for sale in
violation of this section;
2. For a second violation of this type within a twelve-month
period, the administrative fine established by the Attorney General
shall be at least Two Thousand Five Hundred Dollars ($2,500.00) but
not more than Five Thousand Dollars ($5,000.00) for each individual
vapor product offered for sale in violation of this section;
3. For a third or any subsequent violation within a twelve-
month period, there shall be an administrative fine of at least Five
Thousand Dollars ($5,000.00) for each individual vapor product
offered for sale in violation of this section;
4. A manufacturer whose vapor products are not listed in the
directory and who causes the vapor products that are not listed to
be sold for retail sale or to a consumer in this state, whether
directly or through an importer, distributor, wholesaler, retailer,
or similar intermediary or intermediaries, is subject to a civil
penalty of Ten Thousand Dollars ($10,000.00) for each individual
vapor product offered for sale in violation of this section until
the offending vapor product is removed from the market or until the
offending vapor product is properly listed on the directory. In
addition, any manufacturer that falsely represents any information
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required by a certification form shall be guilty of a misdemeanor
for each false representation;
5. In an action to enforce this act, this state shall be
entitled to recover costs, including the costs of investigation,
expert witness fees, and reasonable attorney fees; and
6. A second or subsequent violation of this section shall
constitute a deceptive trade practice for purposes of the Oklahoma
Deceptive Trade Practices Act and, in addition to the remedies
provided for in this section, shall be subject to the remedies
provided in Section 54 of Title 78 of the Oklahoma Statutes.
M. 1. Any nonresident or foreign manufacturer that has not
registered to do business in this state as a foreign corporation or
business entity shall appoint and continually engage without
interruption, as a condition precedent to having its vapor products
included or retained in the directory, the services of an agent in
this state to act as an agent for the service of process on whom all
process, and any action or proceeding against it concerning or
arising out of the enforcement of this section, may be served in any
manner authorized by law. The service shall constitute legal and
valid service of process on the manufacturer. The manufacturer
shall provide the name, address, phone number, and proof of the
appointment and availability of the agent to perform the duties of
an agent to the satisfaction of the Attorney General.
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2. The manufacturer shall provide notice to the Attorney
General thirty (30) days prior to termination of the authority of an
agent and shall further provide proof to the satisfaction of the
Attorney General of the appointment of a new agent no less than five
(5) days prior to the termination of an existing agent appointment.
If an agent terminates an agency appointment, the manufacturer shall
notify the Attorney General of the termination within five (5) days
and shall include proof to the satisfaction of the Attorney General
of the appointment of a new agent.
3. Any nonresident or foreign manufacturer whose vapor products
are sold for retail sale in this state, who has not appointed and
engaged an agent as required by this section, shall be deemed to
have appointed the Secretary of State as its agent and may be
proceeded against in courts of this state by service of process upon
the Secretary of State. However, the appointment of the Secretary
of State as the agent shall not satisfy the condition precedent for
having the vapor products of the manufacturer included or retained
in the directory.
N. 1. Any nonresident or foreign manufacturer that has not
registered to do business in the state as a foreign corporation or
business entity shall, as a condition precedent to having its name
or its vapor products listed and retained in the directory, submit
to the Attorney General a surety bond or other cash security payable
to the State of Oklahoma in the amount of Twenty-five Thousand
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Dollars ($25,000.00). The bond shall be posted by a corporate
surety located within the United States.
2. The bond shall be conditioned on the performance by the
manufacturer of all requirements and obligations imposed by this
section. A surety on a manufacturer’s bond shall be liable up to
the amount of the bond, and the state may execute on such surety
bond for the payment of fines and penalties imposed on the
manufacturer under this section and for the costs of seizure and
destruction of vapor products sold in violation of this section. If
the state executes on the surety bond, it may require the
manufacturer to provide an additional bond as a condition precedent
for retaining the manufacturer or its vapor products in the
directory.
3. A surety on a bond furnished by a manufacturer as provided
in this section shall be released and discharged from liability to
the state accruing on the bond after expiration of sixty (60) days
from the date upon which such surety shall have lodged with the
Attorney General a written request to be released and discharged.
This provision shall not operate to relieve, release, or discharge
the surety from liability already accrued or which shall accrue
before the expiration of the sixty-day period. The Attorney General
shall, upon receiving any such request, notify the manufacturer who
furnished the bond. Unless the manufacturer, on or before the
expiration of the sixty-day period, files with the Attorney General
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a new bond, with the surety approved by and acceptable to the
Attorney General, the Attorney General shall remove the manufacturer
and its vapor products from the directory.
O. Each wholesaler and retailer of vapor products shall be
subject to at least two unannounced compliance checks by the
Attorney General or its agents, which shall include the ABLE
Commission or local law enforcement, annually for purposes of
enforcing this section, and such compliance checks may be conducted
at any time during normal operating hours. Unannounced follow-up
compliance checks of all noncompliant wholesalers and retailers are
required within thirty (30) days after any violation of this act.
The Attorney General shall publish the results of all compliance
checks at least annually and shall make the results available to the
public on request.
P. The Attorney General shall adopt rules for the implementation
and enforcement of this section.
Q. All fees and penalties collected pursuant to this section
shall be used for administration and enforcement of this section.
R. Starting January 31, 2026, and annually thereafter, the
Attorney General shall electronically submit a report to the
Governor, the President Pro Tempore of the Senate, and the Speaker
of the House of Representatives regarding the status of the
directory, manufacturers and vapor products included in the
directory, revenue and expenditures related to administration of
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this section, and enforcement activities undertaken pursuant to this
section.
SECTION 2. AMENDATORY 68 O.S. 2021, Section 400.1, as
amended by Section 3, Chapter 285, O.S.L. 2023 (68 O.S. Supp. 2024,
Section 400.1), is amended to read as follows:
Section 400.1. A. For the purpose of enforcing the tobacco tax
laws of this state, the Oklahoma Tax Commission is authorized,
contingent upon the availability of funds, to establish and maintain
a unit to be known as the “Tobacco Products Tax Enforcement Unit”.
The unit shall enforce the tobacco tax laws of this state and ensure
that all taxes are paid on tobacco products and ensure compliance
with the provisions of Section 1-229.35 of Title 63 of the Oklahoma
Statutes for tobacco products and vapor products by:
1. Confirming that all entities selling tobacco products or
vapor products in this state are properly licensed as provided in
Section 400 et seq. of Title 68 of the Oklahoma Statutes;
2. Verifying that all retailers are only purchasing tobacco
products and vapor products from wholesalers and manufacturers
licensed by the Tax Commission;
3. Verifying that all retailers are only purchasing vapor
products listed in the directory created pursuant to subsection H of
Section 1-229.35 of Title 63 of the Oklahoma Statutes;
3. 4. Providing a dedicated telephone line and email address
for licensed wholesalers, licensed retailers and the general public
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to report suspected violations of tobacco tax laws; provided, no
entity, individual or those who report violations on behalf of a
licensed wholesaler or retailer shall be required to disclose their
identity;
4. 5. Auditing licensed wholesalers and retailers to ensure all
tobacco product taxes are paid;
5. 6. Issuing fines for violations as provided in Section 400
et seq. of Title 68 of the Oklahoma Statutes;
6. 7. Conducting wholesale and retail tobacco inspections to
find and confiscate untaxed tobacco products or vapor products that
may not be sold legally in this state;
7. 8. Establishing data-sharing programs with tax departments
in surrounding states related to tobacco product taxes and illicit
trade in tobacco products or vapor products;
8. 9. Creating an industry advisory committee including
licensed wholesalers and retailers who may represent the entity
related to tobacco products tax enforcement concerns and
suggestions. The industry advisory committee shall be composed of
five (5) members as follows:
a. two members who are licensed wholesalers to be
appointed by the Governor,
b. one member who is a licensed retailer to be appointed
by the President Pro Tempore of the Oklahoma Senate,
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c. one member who is a licensed retailer to be appointed
by the Speaker of the Oklahoma House of
Representatives, and
d. one member who is a licensed wholesaler to be
appointed by the four members provided for in
subparagraphs a through c of this paragraph.
The committee shall meet quarterly. The Oklahoma Tax Commission
shall promulgate rules establishing minimum requirements as may be
deemed necessary to carry out the purposes of the committee; and
9. 10. Working with law enforcement and conducting
investigations to stop illegal acquisition and shipment of tobacco
products or vapor products by persons not licensed to sell tobacco
products or vapor products in this state.
B. The Tax Commission shall annually submit a report to the
Governor, President Pro Tempore of the Senate and Speaker of the
House of Representatives listing the number of wholesale and retail
tobacco inspections conducted, the amount of untaxed or illicit
tobacco products or vapor products confiscated, the number of
tobacco products tax audits conducted, the amount of taxes assessed
and the amount of taxes collected as the result of audits and
confiscations, the number of suspected violations reported and the
actions taken in response, and the number of fines issued and the
amount of fines collected.
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SECTION 3. AMENDATORY 68 O.S. 2021, Section 400.5, as
amended by Section 4, Chapter 285, O.S.L. 2023 (68 O.S. Supp. 2024,
Section 400.5), is amended to read as follows:
Section 400.5. A. Retailers shall only purchase tobacco
products or vapor products from an Oklahoma-licensed tobacco
wholesaler or vapor product manufacturer evidenced by a current
listing provided by the Oklahoma Tax Commission. All purchase
invoices shall contain the license number of the wholesaler and
shall be made available for inspection by the Tax Commission. Any
purchases of tobacco products from a person who is not holding a
current Oklahoma wholesale tobacco or manufacturer license shall be
punishable by a fine of the greater of One Thousand Dollars
($1,000.00) or five times the unpaid tax on such products. The fine
shall be in addition to payment of any unpaid tobacco products tax
and the forfeiture of any tobacco products or vapor products to the
State of Oklahoma this state as provided by Section 414 of this
title. A second or subsequent offense shall be punishable by
revocation of the license. If the retailer fails to pay a fine
within thirty (30) days, the retailer’s license shall be suspended
until the fine is paid in full.
B. The Oklahoma Tax Commission shall make available for all
licensed retailers a list of currently licensed wholesalers or vapor
product manufacturers at least monthly or through the use of a
website maintained by or on behalf of the Oklahoma Tax Commission
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with updates made as often as practical but no less than every
thirty (30) days.
C. Fines collected pursuant to the provisions of subsection A
of this section shall be deposited in the Tobacco Products Tax
Enforcement Unit Revolving Fund created in Section 400.6 of this
title.
SECTION 4. AMENDATORY 68 O.S. 2021, Section 401, is
amended to read as follows:
Section 401. For the purpose of this article:
1. The word “person” shall mean any individual, company,
limited liability company, corporation, partnership, association,
joint adventure, estate, trust or any other group, or combination
acting as a unit, and the plural as well as the singular, unless the
intention to give a more limited meaning is disclosed by the
context;
2. The term “Tax Commission” shall mean the Oklahoma Tax
Commission;
3. The word “wholesaler” shall include dealers whose principal
business is that of a wholesale dealer, and who is known to the
trade as such, who shall sell any tobacco products or vapor products
to licensed retail dealers only for the purpose of resale;
4. The word “retailer” shall include every dealer, other than a
wholesaler as defined above, whose principal business is that of
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selling merchandise at retail, who shall sell, or offer for sale,
tobacco products or vapor products;
5. The word “consumer” shall mean a person who comes into
possession of tobacco products or vapor products for the purpose of
consuming it;
6. The words “first sale” shall mean and include the first
sale, or distribution, of tobacco products or vapor products in
intrastate commerce, or the first use or consumption of tobacco
products or vapor products within this state;
7. The words “tobacco products” shall mean any cigars, smoking
tobacco and smokeless tobacco;
8. The term “cigars” shall include any roll of tobacco for
smoking, irrespective of size or shape and irrespective of the
tobacco being flavored, adulterated or mixed with any other
ingredients, where such roll has a wrapper made chiefly of tobacco;
9. The term “smokeless tobacco” shall mean all smokeless
tobacco including snuff and chewing tobacco;
10. The term “snuff” shall mean any finely cut, ground or
powdered tobacco that is not intended to be smoked;
11. The term “chewing tobacco” means any leaf tobacco that is
not intended to be smoked;
12. The term “smoking tobacco” shall mean any pipe tobacco or
roll-your-own tobacco;
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13. The term “pipe tobacco” means any tobacco which, because of
its appearance, type, packaging or labeling, is suitable for use and
likely to be offered to, or purchased by, consumers as tobacco to be
smoked in a pipe;
14. The term “roll-your-own tobacco” means any tobacco which,
because of its appearance, type, packaging or labeling, is suitable
for use and likely to be offered to, or purchased by, consumers as
tobacco for making cigarettes or cigars, or for use as wrappers
therof; and
15. The term “untaxed” means that the full amount of tax has
not been paid as required by Section 400 et seq. of this title; and
16. The term “vapor product” has the same meaning as that term
is defined in Section 1-229.35 of Title 63 of the Oklahoma Statutes.
SECTION 5. AMENDATORY 68 O.S. 2021, Section 414, is
amended to read as follows:
Section 414. A. Each truck or vehicle wherefrom tobacco
products or vapor products are sold shall be considered as a place
of business and required to have a wholesale license and a bond of
not less than Five Hundred Dollars ($500.00).
B. Any person operating a truck or vehicle by selling,
exchanging or giving away untaxed merchandise covered by this
article tobacco products shall be deemed guilty of violation of same
and shall be penalized as hereinbefore set forth, and untaxed
merchandise tobacco products handled by this person as well as the
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vehicle used to transport the untaxed tobacco products shall be
subject to confiscation by authorized agents of the Tax Commission
or duly authorized peace officers.
C. After seizure or confiscation by such agent or officer, the
merchandise tobacco products and property shall be held until all
taxes, interest and penalties due have been paid. If not paid
within five (5) days after date of seizure, it shall be sold at
public sale by the sheriff of the county where confiscated, after
being advertised by posting of notice of such sale in five public
places in the county where the sale is to occur. The proceeds of
the sale shall be applied to taxes, interest and penalties due and
to the cost of the sale, and the remainder, if any, shall be paid to
the State Treasurer, by the sheriff conducting such sale, to be
deposited to the credit of the General Revenue Fund.
SECTION 6. AMENDATORY 68 O.S. 2021, Section 415, as
amended by Section 2, Chapter 285, O.S.L. 2023 (68 O.S. Supp. 2024,
Section 415), is amended to read as follows:
Section 415. A. Every wholesaler of tobacco products or vapor
product manufacturer in this state, as a condition of carrying on
such business, shall annually secure from the Oklahoma Tax
Commission a written license and shall pay an annual fee of Two
Hundred Fifty Dollars ($250.00); provided, such fee shall not be
applicable if paid pursuant to Section 304 of this title. The Tax
Commission shall promulgate rules which provide a procedure for the
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issuance of a joint license for any wholesaler making application
pursuant to this section and Section 304 of this title. Application
for such license, which shall be made upon such forms as prescribed
by the Tax Commission, shall include the following:
1. The applicant’s agreement to the jurisdiction of the Tax
Commission and the courts of this state for purposes of enforcement
of the provisions of Section 301 et seq. of this title; and
2. The applicant’s agreement to abide by the provisions of
Section 301 et seq. of this title and the rules promulgated by the
Tax Commission with reference thereto. This license, which will be
for the ensuing year, must at all times be displayed in a
conspicuous place so that it can be seen. Persons operating more
than one place of business must secure a license for each place of
business. “Place of business” shall be construed to include the
place where orders are received, or where tobacco products or vapor
products are sold. A “place of business” cannot be a location with
a physical residential address. The Tax Commission shall not issue
a license for a place of business with a physical residential
address. If tobacco products or vapor products are sold on or from
any vehicle, the vehicle shall constitute a place of business, and
the license fee of Two Hundred Fifty Dollars ($250.00) shall be paid
with respect thereto. However, if the vehicle is owned or operated
by a place of business for which the regular license fee is paid,
the annual fee for the license with respect to such vehicle shall be
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only Ten Dollars ($10.00). The expiration for such vehicle license
shall expire on the same date as the current license of the place of
business.
B. Every retailer in this state, as a condition of carrying on
such business, shall secure from the Tax Commission a license and
shall pay therefor a fee of Thirty Dollars ($30.00). Application
for such license, which shall be made upon such forms as prescribed
by the Tax Commission, shall include the following:
1. The applicant’s agreement to the jurisdiction of the Tax
Commission and the courts of this state for purposes of enforcement
of the provisions of Section 301 et seq. of this title;
2. The applicant’s agreement to abide by the provisions of
Section 301 et seq. of this title and the rules promulgated by the
Tax Commission with reference thereto;
3. The applicant’s agreement that it shall not purchase any
tobacco products or vapor products for resale from a supplier that
does not hold a current wholesaler’s license issued pursuant to this
section; and
4. The applicant’s agreement to sell tobacco products or vapor
products only to consumers.
Such license, which will be for the ensuing three (3) years,
must at all times be displayed in a conspicuous place so that it can
be seen. Upon expiration of such license, the retailer to whom such
license was issued may obtain a renewal license which shall be valid
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for three (3) years or until expiration of the retailer’s sales tax
permit, whichever is earlier, after which a renewal license shall be
valid for three (3) years. The manner and prorated fee for renewals
shall be prescribed by the Tax Commission. Every person operating
under such license as a retailer and who owns or operates more than
one place of business must secure a license for each place of
business. “Place of business” shall be construed to include places
where orders are received or where tobacco products or vapor
products are sold. A “place of business” cannot be a location with
a physical residential address. The Tax Commission shall not issue
a license for a place of business with a physical residential
address.
C. Nothing in this section shall be construed to prohibit any
person holding a retail license from also holding a wholesaler
license.
D. 1. All wholesale or retail licenses shall be nonassignable
and nontransferable from one person to another person. Such
licenses may be transferred from one location to another location
after an application has been filed with the Tax Commission
requesting such transfer and after the approval of the Tax
Commission.
2. Wholesale and retail licenses shall be applied for on a form
prescribed by the Tax Commission. Any person operating as a
wholesaler or retailer must at all times have an effective unexpired
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license which has been issued by the Tax Commission. If any such
person or licensee continues to operate as such on a license issued
by the Tax Commission which has expired, or operates without ever
having obtained from the Tax Commission such license, such person or
licensee shall, after becoming delinquent for a period in excess of
fifteen (15) days, pay to the Tax Commission, in addition to the
annual license fee, a penalty of Ten Dollars ($10.00) per day on
each delinquent license for each day so operated in excess of
fifteen (15) days. The penalty provided for herein shall not exceed
the annual license fee for such license. The penalties collected
pursuant to the provisions of this paragraph shall be deposited in
the Tobacco Products Tax Enforcement Unit Revolving Fund created in
Section 400.6 of this title.
E. No license may be granted, maintained or renewed if any of
the following conditions apply to the applicant. For purposes of
this section, “applicant” includes any combination of persons owning
directly or indirectly, in the aggregate, more than ten percent
(10%) of the ownership interests in the applicant:
1. The applicant owes Five Hundred Dollars ($500.00) or more in
delinquent tobacco products taxes;
2. The applicant had a wholesaler or retailer license revoked
by the Tax Commission within the past two (2) years; or
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3. The applicant has been convicted of a crime relating to
stolen or counterfeit tobacco products or vapor products, or
receiving stolen or counterfeit tobacco products or vapor products.
F. No person or entity licensed pursuant to the provisions of
this section shall purchase tobacco products or vapor products from
or sell tobacco products or vapor products to a person or entity
required to obtain a license unless such person or entity has
obtained such license.
G. In addition to any civil or criminal penalty provided by
law, upon a finding that a licensee has violated any provision of
Section 301 et seq. of this title, the Tax Commission may revoke or
suspend the license or licenses of the licensee pursuant to the
procedures applicable to revocation of a license set forth in
Section 418 of this title.
SECTION 7. AMENDATORY 68 O.S. 2021, Section 417, as
amended by Section 5, Chapter 285, O.S.L. 2023 (68 O.S. Supp. 2024,
Section 417), is amended to read as follows:
Section 417. A. All tobacco products upon which a tax is
levied by Section 400 et seq. of this title and all tobacco products
sold, offered for sale or imported into this state in violation of
the provisions of Section 403.2 of this title, and all vapor
products sold or offered for sale in violation of Section 1-229.35
of Title 63 of the Oklahoma Statutes, found in the possession,
custody or control of any person for the purpose of being consumed,
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sold or transported from one place to another in this state, for the
purpose of evading or violating the provisions of Section 400 et
seq. of this title, or with intent to avoid payment of the tax
imposed thereunder, or with intent to avoid complying with the
requirements of Section 1-229.35 of Title 63 of the Oklahoma
Statutes, and any vehicle being used in avoidance of such tax or
such requirements may be seized by any authorized agent of the
Oklahoma Tax Commission or any sheriff, deputy sheriff or police
within the state. Tobacco products or vapor products from the time
of seizure shall be forfeited to the State of Oklahoma and
assessment of penalty as provided thereby and assessment for any
delinquent taxes found to be owing. A proper proceeding shall be
filed to maintain such seizure and prosecute the forfeiture as
herein provided; the provisions of this section shall not apply,
however, where the tax on such tobacco products does not exceed One
Dollar ($1.00).
B. All such tobacco products or vapor products so seized shall
first be listed and appraised by the officer making such seizure and
turned over to the Tax Commission and a receipt taken therefor.
C. The person making such seizure shall immediately make and
file a written report thereof to the Tax Commission, showing the
name of the person making such seizure, the place where seized, the
person from whom seized, the property seized and an inventory and
appraisement thereof, which inventory shall be based on the usual
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and ordinary retail price or value of the articles seized, and the
Attorney General, in the case of tobacco products sold, offered for
sale or imported into this state in violation of the provisions of
Section 403.2 of this title or in violation of Section 1-229.35 of
Title 63 of the Oklahoma Statutes. Within sixty (60) days of
seizure, the person from whom the property was seized may file a
request for hearing with the Tax Commission or the Attorney General
to show why the seized property should not be forfeited and
destroyed. If a hearing is requested, the owner of the tobacco
products or vapor products shall be given at least ten (10) days’
notice of the hearing. If no request for hearing is filed within
the time provided, the property seized will be forfeited and
destroyed.
D. The seizure of such tobacco products or vapor products shall
not relieve the person from whom such tobacco products or vapor
products were seized from prosecution or the payment of penalties.
E. The forfeiture provisions of Section 400 et seq. of this
title shall only apply to persons having possession of or
transporting tobacco products or vapor products with intent to
barter, sell or give away the same.
SECTION 8. AMENDATORY 68 O.S. 2021, Section 420.1, is
amended to read as follows:
Section 420.1. A. Each wholesaler of tobacco products or vapor
product manufacturer, as defined in Section 400 of this title, shall
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maintain copies of invoices or equivalent documentation for each of
its facilities for every transaction in which the wholesaler is the
seller, purchaser, consignor, consignee or recipient of tobacco
products or vapor products. The invoices or documentation shall
contain the wholesaler’s tobacco license number and the retailer’s
tobacco license number if the sale is to a retailer and the quantity
by brand style of the tobacco products or vapor products involved in
the transaction. Each wholesaler shall maintain the documents
required by this subsection for a period of three (3) years.
B. Each retailer of tobacco products or vapor products, as
defined in Section 400 of this title, shall maintain copies of
invoices or equivalent documentation for every transaction in which
the retailer receives or purchases tobacco products or vapor
products at each of its facilities. The invoices or documentation
shall show the name, address, and tobacco license number of the
wholesaler from whom, or the address of another facility of the same
retailer from which, the tobacco products or vapor products were
received, the quantity of each brand style received in such
transaction, the date the tobacco products or vapor products were
received and the retail cigarette license number or sales tax
license number. Each retailer shall maintain the documents required
by this subsection for a period of one (1) year.
SECTION 9. AMENDATORY 68 O.S. 2021, Section 422, is
amended to read as follows:
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Section 422. All wholesalers or retailers selling or
distributing such tobacco products or vapor products under the
provisions of this act shall comply with the provisions of such
sections, and the rules and regulations of the Oklahoma Tax
Commission as to such sale or distribution, and failure to so comply
shall constitute grounds for revocation of any license issued to the
wholesaler or retailer by the Tax Commission.
SECTION 10. It being immediately necessary for the preservation
of the public peace, health or safety, an emergency is hereby
declared to exist, by reason whereof this act shall take effect and
be in full force from and after its passage and approval.
Passed the Senate the 27th day of March, 2025.
Presiding Officer of the Senate
Passed the House of Representatives the ____ day of __________,
2025.
Presiding Officer of the House
of Representatives