Mass. Gen. Laws ch. 64C § 7E

Current through Chapter 223 of the 2024 Legislative Session

Section 64C:7E - Excise on an electronic nicotine delivery system

(a) As used in this section, the following words shall have the following meanings unless the context clearly requires otherwise:

"Electronic nicotine delivery system", an electronic device, whether for 1-time use or reusable, that can be used to deliver nicotine or another substance to a person inhaling from the device including, but not limited to, electronic cigarettes, electronic cigars, electronic cigarillos, electronic pipes, vaping pens, hookah pens and other similar devices that rely on vaporization or aerosolization; provided, however, that "electronic nicotine delivery system" shall also include any noncombustible liquid or gel that is manufactured into a finished product for use in such electronic device; provided further, that "electronic nicotine delivery system" shall also include any component, part or accessory of a device used during the operation of the device even if the part or accessory was sold separately; provided further, that "electronic nicotine delivery system" shall not include a product that has been approved by the United States Food and Drug Administration for the sale of or use as a tobacco cessation product or for other medical purposes and is marketed and sold or prescribed exclusively for that approved purpose.

"Electronic nicotine delivery system distributor", (i) a person who imports or causes to be imported into the commonwealth electronic nicotine delivery systems for sale or who manufactures electronic nicotine delivery systems in the commonwealth; or (ii) a person within or without the commonwealth who is authorized by the commissioner to make returns and pay the excise on electronic nicotine delivery systems sold, shipped or delivered by the person to a person in the commonwealth.

"Electronic nicotine delivery system retailer", a person who sells or furnishes electronic nicotine delivery systems to consumers for individual use; provided, however, that the electronic nicotine delivery systems shall not be used for the purpose of resale.

"Person", a natural person, corporation, association, partnership or other legal entity.

"Taxed electronic nicotine delivery system", an electronic nicotine delivery system upon which the excise has been paid in full by the date on which payment was due and with respect to which the return has been completed, signed and filed with the commissioner by the date on which the return was due pursuant to this section and section 16 of chapter 62C.

"Untaxed electronic nicotine delivery system", an electronic nicotine delivery system upon which the excise has not been paid in full by the date on which payment was due or with respect to which the return has not been completed, signed and filed with the commissioner by the date on which the return was due pursuant to this section and section 16 of chapter 62C.

"Wholesale price", in the case of:

(i) a manufacturer of electronic nicotine delivery systems, the price set for such products or, if no price has been set, the wholesale value of the electronic nicotine delivery system;

(ii) an electronic nicotine delivery system distributor who is not a manufacturer of electronic nicotine delivery systems, the price at which the electronic nicotine delivery system distributor purchased the electronic nicotine delivery system; or

(iii) an electronic nicotine delivery system retailer or a consumer, the price at which the electronic nicotine delivery system retailer or consumer purchased the electronic nicotine delivery system.

(b) There shall be an excise on an electronic nicotine delivery system held in the commonwealth at a rate of 75 per cent of the wholesale price. The excise shall be imposed on an electronic nicotine delivery system distributor at the time that the electronic nicotine delivery system is manufactured, purchased, imported, received or acquired in the commonwealth. The excise shall not be imposed on an electronic nicotine delivery system that is exported from the commonwealth. Thirty per cent of revenues received pursuant to this section, together with any penalties, forfeitures, interest, costs of suits and fines collected in connection therewith, less all amounts refunded or abated in connection therewith, as certified by the commissioner, shall be credited to the Community Behavioral Health Promotion and Prevention Trust Fund established in section 35GGG of chapter 10.

(c) An electronic nicotine delivery system retailer shall be liable for the collection of the excise on all electronic nicotine delivery systems that are in the electronic nicotine delivery system retailer's possession at any time and upon which the excise has not been paid by an electronic nicotine delivery system distributor. There shall be a presumption that the excise on the electronic nicotine delivery system has not been paid and that the electronic nicotine delivery system retailer is liable for the collection of the excise on the electronic nicotine delivery system if, upon demand, an electronic nicotine delivery system retailer fails to produce or exhibit to the commissioner or the commissioner's authorized representative an invoice by an electronic nicotine delivery system distributor for an electronic nicotine delivery system in the electronic nicotine delivery system retailer's possession.

(d) The amount of the excise advanced and paid by an electronic nicotine delivery system distributor or electronic nicotine delivery system retailer under this section shall be added to and collected as part of the sales price of the electronic nicotine delivery system.

(e)

(1) An electronic nicotine delivery system distributor shall be liable for the payment of the excise on electronic nicotine delivery systems that the electronic nicotine delivery system distributor imports or causes to be imported into the commonwealth or that the electronic nicotine delivery system distributor manufactures in the commonwealth. An electronic nicotine delivery system distributor authorized by the commissioner to make returns and pay the excise on electronic nicotine delivery systems sold, shipped or delivered by the electronic nicotine delivery system distributor to a person in the commonwealth shall be liable for the collection and payment of the excise on all of the electronic nicotine delivery systems so sold, shipped or delivered.

(2) A person who does not acquire untaxed electronic nicotine delivery systems but acquires taxed electronic nicotine delivery systems for sale at retail shall not be licensed as an electronic nicotine delivery system distributor under this section; provided, however, that the person shall be required to be licensed as an electronic nicotine delivery system retailer during the period that the person is an electronic nicotine delivery system retailer of taxed electronic nicotine delivery systems.

(f) A person outside the commonwealth who ships or transports electronic nicotine delivery systems to electronic nicotine delivery system retailers in the commonwealth to be sold by electronic nicotine delivery system retailers may apply for a license as a nonresident electronic nicotine delivery system distributor. Upon the issuance of such a license, the licensee shall be subject to this section and may act as an electronic nicotine delivery system distributor; provided, however, that such person shall file proof with the person's application that the person has appointed the state secretary as the person's agent for service of process relating to any matter or issue arising under this section. The person shall also agree to submit the person's books, accounts and records for examination in the commonwealth during reasonable business hours upon request by the commissioner or the commissioner's authorized representative.

(g) A resident of the commonwealth shall be liable for the collection of the excise on all electronic nicotine delivery systems that are in the resident's possession at any time and upon which the excise has not been paid by an electronic nicotine delivery system distributor or electronic nicotine delivery system retailer. There shall be a presumption that the excise on the electronic nicotine delivery system has not been paid and that the resident is liable for such excise if a resident, upon demand, fails to produce or exhibit to the commissioner or the commissioner's authorized representative an invoice or sales receipt by an electronic nicotine delivery system distributor or electronic nicotine delivery system retailer for an electronic nicotine delivery system in the resident's possession.

(h) No person shall act as an electronic nicotine delivery system distributor or electronic nicotine delivery system retailer in the commonwealth unless licensed to do so under section 67 of chapter 62C. If an electronic nicotine delivery system distributor or electronic nicotine delivery system retailer acts as both an electronic nicotine delivery system distributor and electronic nicotine delivery system retailer at a single place of business, the electronic nicotine delivery system distributor or electronic nicotine delivery system retailer shall procure a license to act as an electronic nicotine delivery system distributor and a license to act as an electronic nicotine delivery system retailer unless, upon application to the commissioner, the commissioner determines otherwise. Each license so issued or a duplicate copy thereof shall be prominently displayed on the premises covered by the license.

(i) Except as otherwise provided in this section, the provisions of this chapter and chapter 62C relative to the assessment, collection, payment, abatement, verification and administration of taxes, including penalties, shall apply to the excise imposed by this section.

(j) For the purposes of section 5, electronic nicotine delivery systems shall be tobacco products, an electronic nicotine delivery system distributor shall be a wholesaler and an electronic nicotine delivery system retailer shall be a retailer.

(k) For the purposes of section 8, untaxed electronic nicotine delivery systems found in the commonwealth shall be cigarettes, which have not been returned and are not returnable under section 16 of chapter 62C or section 6 as applicable.

(l)

(1) A person who sells, offers for sale or possesses with intent to sell an electronic nicotine delivery system or otherwise acts as an electronic nicotine delivery system distributor or electronic nicotine delivery system retailer without being licensed as such shall, in addition to any other penalties provided by chapter 62C or this chapter, be subject to a civil penalty of not more than $5,000 for the first offense and not more than $25,000 for a second or subsequent offense.

A person shall not, either as principal or agent, sell or solicit orders for electronic nicotine delivery systems to be shipped, mailed or otherwise sent or brought into the commonwealth to any person who is not a licensed electronic nicotine delivery system distributor or licensed electronic nicotine delivery system retailer unless the same is to be sold to or through a licensed electronic nicotine delivery system distributor or licensed electronic nicotine delivery system retailer. A person who knowingly violates this paragraph shall, in addition to any other penalties provided by chapter 62C or this chapter, be subject to a civil penalty of not more than $5,000 for the first offense and not more than $25,000 for a second or subsequent offense.

An electronic nicotine delivery system shall be presumed to be subject to the excise under this section unless the person on whose premises the electronic nicotine delivery system was found establishes otherwise.

(2) A person who knowingly:

(i) has in the person's possession a shipping case or other container of electronic nicotine delivery systems that does not bear the name and address of the person receiving the electronic nicotine delivery systems from a manufacturer or such other markings as the commissioner may require; or

(ii) is in possession of a shipping case or other container of electronic nicotine delivery systems from which the name and address of the person receiving the electronic nicotine delivery systems from the manufacturer has been erased or defaced shall, in addition to any other penalties provided by chapter 62C or this chapter, be subject to a civil penalty of not more than $5,000 for the first offense and not more than $25,000 for a second or subsequent offense.

(3) A person who files a false return, affidavit or statement or who violates a provision of this section for which no other penalty has been provided shall, in addition to any other penalty provided by chapter 62C or this chapter, be subject to a civil penalty of not more than $5,000 for the first offense and not more than $25,000 for a second or subsequent offense.

(4) When the commissioner or a police officer discovers an untaxed electronic nicotine delivery system in the possession of a person who is not a licensed or commissioner-authorized electronic nicotine delivery system distributor, the commissioner or police officer may seize and take possession of the electronic nicotine delivery systems.

Any electronic nicotine delivery system seized by a police officer shall be turned over to the commissioner and shall be forfeited to the commonwealth. The commissioner shall destroy the electronic nicotine delivery systems.

(5) The state police and local police departments may, and, at the request of the commissioner or the commissioner's duly authorized agent, shall, enforce this section. Each violation of this section shall be a separate offense.

(6) Not more than 30 per cent of the amounts collected pursuant to civil penalties imposed pursuant to this section shall be appropriated to the department of public health's tobacco and cessation and prevention program.

(m) Marijuana products and marijuana accessories as defined in section 1 of chapter 94G shall not be subject to the excise imposed under this section; provided, however, that marijuana accessories that are manufactured to also deliver nicotine shall be considered an electronic nicotine delivery system and shall be subject to the excise imposed under this section.

(n) The commissioner may promulgate regulations to implement this section.

Mass. Gen. Laws ch. 64C, § 7E

Amended by Acts 2022, c. 180,§ 3, eff. 11/9/2022.

Amended by Acts 2020, c. 31,§ 6, eff. 6/1/2020.

Added by Acts 2019, c. 133,§ 16, eff. 6/1/2020.