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Guidelines on how to apply for Cigarette and Tobacco license in the State of Arizona
Definition of tobacco distributor:

A tobacco distributor is any person who manufactures, produces, ships, transports, imports, acquires or possesses for the purpose of making the first sale of cigarette and other tobacco products on which tobacco taxes have not been paid.

Who is required to obtain a tobacco license in the State of Arizona?

Every distributor acquiring or possessing for the purpose of sale or distribution for the first time in Arizona of any tobacco product on which tax is payable must obtain a license to sell tobacco products from the DOR.

Tobacco manufacturer also needs to obtain a distributor license from the DOR provided that it manufactures and sells tobacco products to a person not licensed by the department of revenue to do the same.

How can I apply for the distributor license?

Tobacco distributor license is obtained by applying on Arizona Luxury Tax Online ALTO service on DOR website. For this purpose, you have to make a user login account by following the instructions. You can select new business registration option for tobacco license application.

How much is the license fee?

License fee is $25 and is payable electronically through ALTO service.

Do I need to obtain a separate business license for each of my distribution locations?

There is no requirement for applying separately for each business location. But you have to pay the additional fee of $25 for each location.

What is the requirement to sell tobacco products from a retail storefront?

A supplier is based within the Arizona: A retailer who sells tobacco products from a storefront location to an end user, he/she applies for a TPT license to buy and sell tobacco products from the wholesalers who is based within the state of Arizona. The retailer of selling tobacco products must also check with the county clerk's office, if there is any requirement to secure a local tobacco permit. One of the cities of Arizona, Phoenix requires to obtain a retail tobacco license to buy and sell tobacco products in retail.

An out of state vendor: Every cigarette and tobacco retailer is required to file for a distributor's license along with the TPT license if he/she is buying tobacco products from an out of state tobacco product suppliers, and selling in a retail to an end user.

When I can renew my tobacco license?

Tobacco distributor licenses are valid for one year period, after that it can be renewed using the ALTO service by accessing your account and payment of renewal fee which is same as the original license application fee.

Please note that you cannot continue your tobacco distribution business once your license has expired. You will have to apply first for license renewal. You can commence your business again once you are granted renewal.

What are the requirement of PACT Act reporting?

  • As per the Prevent All Cigarette Trafficking PACT act, all tobacco distributors and sellers are required to comply with the all the state, local and tribal laws and regulation pertaining to cigarette and OTP as if the sale occurs in that particular state or tribal area.
  • PACT act requires all tobacco dealers, manufacturer, distributors to register with the US attorney general and the tobacco administrator in the relevant state in which tobacco shipment is received and a sale is made.
  • Any person who sells, transfers and distributes the tobacco products in the State of Arizona is required to file a monthly report with the Arizona DOR which contains details regarding brand, quantities and recipient of cigarette and OTP, shipment details. This report is due on the 10th of every month and is submitted electronically through ALTO service on DOR website.

What are the requirements of selling tobacco products in tribal lands in Arizona?

If you are selling tobacco products in tribal areas, you are required to get registered as a tobacco retailer with the DOR for that area. Upon registration, a retailer identity number will be assigned to you which will be used to report your sales by the licensed distributors.

What are the tax rates on cigarette and OTP in Arizona?

  • Cigarette: Tax rate is $2 per pack of 20 cigarettes.
  • Chewing tobacco, smoking tobacco, and snuff: $0.223 per ounce.
  • Cavendish, plug, or twist tobacco: $0.55 per ounce.
  • Small cigars: 0.441 per 20 cigars.
  • All other cigars: $ 0.218 per cigar depending on the manufacturer's retail price.
Licensed distributors are responsible for paying tax on cigarettes at the time of purchase of tax stamp from the DOR.

When the monthly tobacco returns are due?

Licensed tobacco distributors are required to file a tax return for each place of business on or before the 20th day of the month following the month reported on the return.

For cigarettes and tobacco products the return must be submitted on or before the due dates to avoid penalty. Penalties will be assessed if payment is not received within 10 calendar days of the due date.

If a person who fails to pay the amount shown as tax on any return within the due date, a penalty of 0.5 percent, subject to a maximum of ten percent, shall be imposed for each month or fraction of a month during which the failure continues.

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