A vapor product is any liquid or other substance that contains nicotine and is depleted as it is used in an electronic smoking product. It does not include any solution or substance that is regulated as a drug, device or combination product under Chapter V of the Federal Food, Drug and Cosmetics Act 21 U.S.C. 301, et seq.
An electronic smoking product is any noncombustible product, other than a cigarette or tobacco product, that contains or is designed to use vapor products and employs a heating element, power source, electronic circuit, or other electronic, chemical, or mechanical means, regardless of shape or size, that can be used to produce vapor from the vapor product. It does not include a product regulated as a drug, device, or combination product under Chapter V of the “Federal Food, Drug and Cosmetic Act,” 21 U.S.C. 301, et seq.
Electronic smoking products include but are not limited to the following:
Similar products and devices
The tax is levied on the sale of vapor products the first time an Ohio distributor receives untaxed vapor products or whenever an out-of-state distributor sells vapor products to an Ohio purchaser. The tax rate is one cent per one-tenth of a milliliter or one-tenth of a gram (equiv. of 10 cents per milliliter or gram), depending on whether sold in liquid or non-liquid form. The excise tax on vapor products does not apply to electronic smoking products, however, the liquid is always taxable if it contains nicotine, even if it is in a closed-end disposable electronic smoking product. Only one sale of the same article is used to compute the tax due. Additionally, if a tax-paid vapor product is repackaged, reconstituted, diluted or reprocessed, the tax does not apply to a subsequent sale of the vapor product.
Synthetic nicotine meets the definition of a vapor product and is taxable.
The distributor pays the tax. Distributors include any person that:
Sells vapor products to a retail dealer;
Is a retail dealer who receives untaxed vapor products which the tax has not or will not be paid by another distributor;
Is an Ohio wholesale dealer who receives vapor products from a manufacturer or receives untaxed vapor products;
Is an out-of-state wholesale dealer that sells vapor products to an Ohio wholesale dealer
In the case of an out-of-state dealer who sells directly to a consumer in Ohio, the seller is the taxpayer. However, if a consumer receives vapor products on which the tax has not been paid, the consumer is liable for the tax.
A secondary manufacturer is any person in Ohio engaged in the business of repackaging, reconstituting, diluting or reprocessing vapor products for resale to consumers.
Yes. A distributor is required to obtain a license issued by the Department to engage in the business of distributing tobacco products and vapor products. The application fee for a license to engage in the business of distributing both tobacco products and vapor products is $1,000 for each location where tobacco products and vapor products are received or distributed.
The application fee for a license to engage solely in the business of distributing vapor products (vapor products license) is $125 for each location where vapor products are received or distributed. In addition, secondary manufacturers must also obtain a vapor products license.
The Ohio Department of Taxation issues vapor distributors licenses. Please visit forms to obtain an application.
If you are a retailer and you sell vapor products, you will not need a vapor products distributors license if the following apply:
You purchase all vapor products tax-paid from Ohio licensed distributors. (A list of all active OTP and vapor distributors can be found here)
You are not a secondary manufacturer
The lists can be found on the Department of Taxation’s website tax.ohio.gov.
Out-of-state sellers of vapor products who have substantial nexus with the state, as defined in R.C. 5741.01, will need to register for both a vapor products license and a seller’s use tax account. An out-of-state seller that has substantial nexus must remit the excise tax on what is taxable for purposes of vapor products and collect and remit sales tax for all taxable sales.
No, if a product does not contain nicotine, then it does not meet the definition of a vapor product.
The distributor must electronically file and pay monthly tax returns with the Department via the Gateway. The return and payment are due by the 23rd day of the month following the reporting period. For example, the February tax return is due March 23rd. A tax return must be filed each month even if no taxable transactions occurred.
Yes. If a return is filed late, there may be a late filing charge of $50 or 10 percent of the tax due, whichever is greater. Interest also applies to all late payments.
Each distributor of vapor products subject to the tax levied by section 5743.54 of the Ohio Revised Code shall mark on the invoices the following:
A statement indicating that the Ohio excise tax has been paid
The total vapor volume in grams or milliliters.
Each distributor of vapor products must maintain complete and accurate records of all purchases and sales of vapor products and shall procure and retain all invoices, bills of lading, and other documents relating to the purchases and sales for a period of three years from the date the return was due or was filed, whichever is later. The distributor shall keep open records and documents during business hours for the inspection by the tax commissioner at the licensed location.
Yes, you are required to notify the Department of Taxation that you are closing and must file all required returns through the final date of operation.
Write to the Ohio Department of Taxation, Excise Tax Unit, P.O. Box 530, Columbus, Ohio 43216-0530, telephone us at (855) 466-3921, visit the cigarette and other tobacco products information release section at tax.ohio.gov, or e-mail us firstname.lastname@example.org.
Yes. Taxpayers must file the vapor products returns even if there are no taxable purchases or sales.