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How to obtain tobacco License in the State of New Jersey

Tobacco industry in the US is the most regulated and administered industry. It is mandatory to obtain relevant permits and licenses when manufacturing, importing, selling tobacco products. Here are some guidelines on how to obtain tobacco wholesaler and retail licenses in the State of New Jersey.

Definition of Distributor: A person, wherever resident or located, who brings or causes to be brought into this State unstamped cigarettes purchased directly from the manufacturers and stores, sells or otherwise disposes of the same after they reach the State.

Definition of Manufacturer: A person, irrespective of location who manufactures or produces, sells, uses, stores or distributes the tobacco products within or without the State.

Definition of Wholesaler: A person who engages in the business of sale and/or purchase of taxincluded cigarettes to retail dealers who resell the cigarettes or who places the cigarettes into warehouse facilities for storage for future distribution.

Definition of retailer: Any person who, in the usual course of business, purchases or receives cigarettes from any source for the purpose of sale to the ultimate consumer and any person who, owns, leases or otherwise operates one or more vending machines for the purpose of sale of cigarettes to the ultimate consumer.

Eligibility for applying as tobacco retailer and manufacturer in New Jersey?

Every person starting a business as retailer, manufacturer and vending machine operator for tobacco products is required to apply for a tobacco license on form CM-100 from Division of Taxation, State of New Jersey.

Licenses are issued for one year from April to March and can be renewed by applying online on the Division of Revenue site by providing your business identification number. In order to expedite the processing, please submit the tax due before applying.

What is the tobacco license fee?

  • Cigarette Retailers $50.
  • Cigarette Vending Machine Operators $50.
  • Manufacturer $5.

How to apply for cigarettes wholesalers and distributors license?

Wholesalers and distributors of tobacco products are required to file an application on form CWD-1 available on the Division of taxation, Department of Treasury, State of New Jersey website. Applications with the supporting documents are submitted to the Division of Taxation. Distributors and wholesalers are required to apply for a separate license for each business location.

Please note that the same application is used when applying for the renewal of the license. Renewal is applied on the same form CWD-1 along with the renewal fee on or before 1st of March.

How much will my wholesaler and distributor license cost?

  • Wholesaler license fee is $250.
  • Distributor‘s cigarette license fee is $350.

Can my license be revoked or suspended?

If you fail to update your business information, with the Division of Taxation within 10 days of the change, your license can be revoked or cancelled by the authorities.

Prerequisite for a distributor or wholesaler license

  • Wholesalers has to mention on the form the total number of retailers, vending machines and vending machine operators. Further, he or she also has to mention if sale of cigarettes has taken place outside the New Jersey.
  • Letter of confirmation must be submitted along with the application mentioning that applicant should be a direct buyer of cigarettes from manufacturers.
  • Cigarettes wholesalers and distributors are required to file a performance bond of amount $6,000 on form CD-3 with the application. Similarly, performance bond on form CD-5 is filed by nonresidents for the amount of $2,000.
  • A certificate is required to be filed in place of a new performance bond at the time of renewal of license.

What are the other requirements to be followed under the laws?

If any of the below mentioned person is related to the cigarettes wholesalers, distributors, and retailers of more than five retail locations and vending machine operators of five vending machines, he or she will be required to submit their finger-prints that are processed through the FBI and NJ State Police:

  • Individuals having interests in proprietorship or company.
  • Partners in a partnership.
  • Joint venturers.
  • Officers, directors who have more than 5% shares of a corporation.
  • Employees receiving more than $30,000 in compensation of services.
  • Any other person who have any controlling interest in the applicant business entity thorough loans, mortgages and pledges of securities.
Please note that above mentioned persons are exempt from submitting the fingerprints if they already have submitted their valid fingerprints in the past with Department of Taxation, New Jersey.

Responsibilities of cigarettes and tobacco products licensee?

  • Sale of tobacco products to a person less than 21 years of age is prohibited in the State. If any person found selling tobacco products to the said person, he or she will be charged with a penalty.
  • Cigarette and tobacco products licensee is required to display the license in a prominent position at retail or business location.

What are tax rates on tobacco products in New Jersey?

  • Cigarettes: Tax rate is $2.7 per pack of 20 cigarettes.
  • Moist snuff: $0.75 per ounce and proportionate rate on all fraction part thereof.
  • Other Tobacco products: 30% of the wholesale price.

What are the tax return filing requirements in the New Jersey?

Cigarettes dealers and distributors are required to file monthly returns as per their inventory, type on form CR-1 for ‘resident cigarette distributor tax return’ available on the Division of Taxation, State of New Jersey site. Similarly, no resident distributors file cigarette tax return on form CNR-1.

Every person who is liable for tobacco product tax in the state is required to file a return of income with the Department of Taxation on form TPT-10. The return is filed monthly and is due on or before the 20th of the following of the reporting month. Retailers of tobacco products need to file a report of their monthly sales to the tax department.

Failure to file return of income and tax on time may impose a penalty on you that is 5% of the amount of tax payable up to a maximum 25% of the unpaid amount of tax. An additional penalty of $100 may also be imposed for each month for which tax has not been paid.

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