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Tobacco Taxes

The Department of Revenue administers Tobacco Taxes on cigarettes, other tobacco products (OTP), cigarette papers and snuff.

HB 361—TOBACCO TAX MODIFICATIONS

ATTENTION:  ALL TOBACCO DISTRIBUTORS HB 361 – TOBACCO TAX MODIFICATION

Effective August 1, 2013, HB 361 prohibits the distribution of untaxed tobacco products without first obtaining a license from the Department of Revenue (DOR). The annual fee for a tobacco distributor license designation is $500. A resident wholesaler, nonresident wholesaler, or subjobber may also obtain and maintain a distributor's license at each place of business at no additional cost each year. An unclassified acquirer may also obtain and maintain a distributor's license for the privilege of selling tobacco products in this state for an additional $450. The DOR may, upon application, grant a distributor's license to a person other than a retailer who is not otherwise required to hold a distributor's license. 

HB 361 prohibits retailers from buying untaxed tobacco products unless the retailer is a licensed retail distributor who directly pays the applicable excise tax on its purchase price of tobacco products to the DOR. The annual fee for this license designation is $100. Only retailers that choose to purchase tobacco products from distributors not licensed with the DOR must apply and receive the retail distributor license. This new license designation is now included on the revised Application for Cigarette and Tobacco Product Licenses (Form 73A181). A single license will cover each eligible retailer for all locations designated by the retailer on its license application.

Click here for a list of 2014-15 Tobacco Products Distributors. 

The new license application is available at the following link: http://revenue.ky.gov/NR/rdonlyres/8F1C01B4-2628-4DCC-8B05-BD780E91AF45/0/73A181613.pdf.

Please call the DOR’s Excise Tax Section at (502) 564-6823 if there are additional questions.


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Tobacco Products, Snuff, and Chewing Tobacco

Tobacco Products, Snuff, and Chewing Tobacco – Effective August 1, 2013

Tobacco products, other than snuff and chewing tobacco, are taxed at the rate of 15 percent of the actual price for which the distributor sells the product. Retail distributors are taxed at 15 percent of their total purchase price of the untaxed tobacco products.

“Tobacco products” means any smokeless tobacco products, smoking tobacco, chewing tobacco, and any kind or form of tobacco prepared in a manner suitable for chewing or smoking, or both, or any kind or form of tobacco that is suitable to be placed in an individual’s oral cavity, but does not include cigarettes or reference cigarettes.

Snuff is taxed at the rate of 19 cents per each 1-1/2 ounces or portion thereof by net weight. The term “snuff” means tobacco that is finely cut, ground, or powdered and is not for smoking. Snuff includes snus and dry snuff.  For dry snuff, this change in classification and tax rate is effective August 1, 2013.

“Chewing tobacco” means any leaf tobacco that is not intended to be smoked and includes loose leaf chewing tobacco, plug chewing tobacco, and twist chewing tobacco, but chewing tobacco does not include snuff.  Chewing tobacco is taxed at the following rates: 
a) 19 cents per each single unit (net weight less than 4 ounces) sold.  For retail distributors, the tax is levied on purchases of untaxed chewing tobacco at the same rate.
b) 40 cents per each half-pound unit (net weight of at least 4 ounces but not more than 8 ounces) sold.  For retail distributors, the tax is levied on purchases of untaxed chewing tobacco at the same rate.
c) 65 cents per each pound unit (net weight of at least 8 ounces but not more than 16 ounces) sold.  For retail distributors the tax is levied on purchases of untaxed chewing tobacco at the same rate.
d) If the container, pouch, or package on which the tax is levied contains more than 16 ounces by net weight, the rate that shall be applied to the unit shall equal the sum of 65 cents plus 19 cents for each increment of 4 ounces or portion thereof exceeding 16 ounces sold.  For retail distributors the tax is levied on purchases of untaxed chewing tobacco at the same rate.

Tobacco products, snuff, and chewing tobacco will be reported on the Monthly Report of Tobacco Products, Snuff, and Chewing Tobacco – Form 73A422.  The due date of the return is the 20th day of the month following the month in which the transactions occur. 

Cigarettes

The tax rate on packs of 20 cigarettes is 60 cents (proportionate rate for packs of 25). 

The cigarette tax is paid through the purchase of stamps from the Department of Revenue.  These stamps must be affixed to each package of cigarettes as evidence that the tax was paid.

Cigarette Tax Laws are located in Chapter 138 of the Kentucky Revised Statutes.

(MSA) Tobacco Directory

KRS 131.610 requires the Department of Revenue to provide a directory of all participating manufacturers and non-participating manufacturers that have been certified by the Attorney General as being in compliance with the Master Settlement Agreement and Model Act. The Department of Revenue will update the directory to add or remove a tobacco manufacturer or brand family that does not meet certification requirements as determined by the Attorney General. The Department of Revenue will notify wholesalers/distributors when there have been changes to the directory.

NOTE: Pursuant to KRS 131.612, it shall be unlawful for any wholesaler/distributor to affix a stamp to a package or other container of cigarettes or distribute such cigarettes of a tobacco product manufacturer or brand family not included in the directory. Unlawfully stamped cigarettes will be considered contraband in the hands of the wholesaler/distributor and will be subject to seizure and destruction. Civil or criminal penalties may also be pursued against the wholesaler/distributor.

Effective July 1, 2009, cigarettes and "roll your own" tobacco that have been removed from the directory for 60 days are considered contraband and will be subject to seizure and destruction even if a stamp had been applied. 

If you have any questions concerning the Tobacco Taxes please Email the Department of Revenue.

If you have questions concerning the Master Settlement Agreement (MSA), certification or brands, please Email the Office of the Attorney General.

Tobacco Directories

The cigarette brands listed on the links below have been certified by the Office of the Attorney General as being in compliance with the Master Settlement Agreement (MSA) and Model Act.

The Notice of Removal lists indicate manufacturers and brands that are no longer certified by the Office of Attorney General as being in compliance with the Master Settlement Agreement (MSA) and Model Act.

Participating Manufacturers

Non-Participating Manufacturers

2014 Notices of Removal from the Kentucky Tobacco Directory

2013 Notices of Removal from the Kentucky Tobacco Directory

2012 Notices of Removal from the Kentucky Tobacco Directory

Click here for Previous Years Notices

Locate Forms to Download
Contact DOR Staff

E-Mail DOR Taxing Areas

Questions can be directed to the Kentucky Department of Revenue, Excise Tax Section, Station 62, PO Box 138, Frankfort, KY  40602-0138, (502) 564-6823.

 

 

E-Filing and Payment Options

E-Tax - Electronic Filing and Payment Options

 

Please Note: Some of the links on this page resolve to non-governmental agencies. The information on these pages is not controlled by the Department of Revenue or the Commonwealth of Kentucky.

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Last Updated 9/8/2014
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