Tobacco Luxury Tax
Please see Publication 541 for general information regarding current laws impacting the distribution, sale and taxation of tobacco products in Arizona.
The Tobacco Luxury Tax FAQs are also available for answers to frequently asked questions regarding tobacco luxury tax.
Please see the attached letter for additional information on how the PACT Act may apply to Electronic Nicotine Delivery Systems.
Taxpayers may also contact the Tobacco Tax Unit at (602) 716-7808 for more information or for assistance.
Notice for Licensed Tobacco Distributors regarding Manufacturers’ Invoice Numbers
Pursuant to Arizona Revised Statutes (A.R.S.) § 42-3462(A)(3) and (4), Arizona licensed tobacco distributors are required to reference not only invoice numbers from invoices documenting shipments of cigarettes to their customers but also invoice numbers corresponding to the invoices documenting cigarette shipments by manufacturers to them.
The department issues this reminder to all licensed distributors that manufacturers’ invoice numbers must be provided for all cigarette transactions reported on Arizona Luxury Tax Online (ALTO). Beginning with the February 2020 monthly return that is due on March 20, 2020, the department will reject returns filed lacking manufacturers’ invoice numbers, and may additionally assess penalties associated with the failure to timely file this data. The department also recommends that distributors review monthly returns before the February 2020 return and amend filings that are missing manufacturers’ invoice numbers to avoid additional penalties.
Please contact the department’s Tobacco Tax Unit at (602) 716-7808 or [email protected] for additional information or assistance.
Reminder of Statewide Prohibition Against Single Cig Sales
The department has issued Arizona Luxury Tax Notice 20-1, reminding all businesses (retailers, restaurant and bar/lounge operators) that Arizona law prohibits the sale of single cigarettes (“loosies”) taken out from 20- and 25-cigarette packs.
Tax Treatment of “Heat-Not-Burn” Products
The department has issued Arizona Luxury Tax Ruling 20-1, finding that Heatsticks will be classified as cigarettes for the purposes of Arizona tobacco tax and the state’s Escrow and Directory statutes.
Tobacco 21 Legislation
Please be advised, the federal “Tobacco 21” legislation, Pub. L. No. 116-94, § 603 (codified as amended at 21 U.S.C. § 387f) signed by President Trump on December 20, 2019, raises the federal minimum legal age for purchasing tobacco products from 18 to 21.
For additional guidance on how to comply with the new laws as a tobacco retailer, please consult the U.S. Food and Drug Administration's website at www.fda.gov/tobacco-products/retail-sales-tobacco-products/selling-tobacco-products-retail-stores. The Department of Revenue, as well as other agencies that have a role in enforcing state tobacco laws, will seek to provide updated guidance to the public should any change to Arizona law occur.
State law requires distributors that acquire or possess tobacco products for the purpose of making the initial sale or distribution in Arizona to apply for and obtain a tobacco distributor license from the department.
Applications for a tobacco distributor license must be submitted electronically through Arizona Luxury Tax Online (“ALTO”). The department may only consider applications that comply with this requirement.
Licensed distributors are required to renew their license annually. A tobacco distributor license is valid for one year and must be renewed prior to the expiration date.
A license renewal notice will be sent to the distributor two months prior to the license expiration date. The license fee will post to the license account on Arizona Luxury Tax Online (“ALTO”) at that time. Payment for the license renewal fee must be submitted online. Requests for license renewals are subject to review by the Department to determine continued eligibility.
Directory of Arizona Licensed Tobacco Distributors:
ADOR publishes a directory of licensed tobacco distributors, including any trade names or business names used by the licensee. The directory is updated each month to reflect active licensees.
Internet and Delivery Sales of Cigarettes and Most Other Tobacco Products are Prohibited.
The sale of cigarettes and most other tobacco products over the internet to any person in Arizona other than a licensed tobacco distributor or retailer is illegal.
For more information, please see the Arizona Attorney General’s website.
- Publication 541 - General information regarding current laws impacting the distribution, sale and taxation of tobacco products in Arizona.
- Tobacco Luxury Tax FAQs
- Tobacco Luxury Tax Notices
- Tobacco Luxury Tax Rulings, Procedures and Decisions
- Tobacco Tax Fraud & Criminal Investigations
- Cigarette Tax Stamp Guide
- Arizona Luxury Tax Online (ALTO) Resources
- Arizona Revised Statutes
- Arizona Administrative Code - Title 15, Chapter 3 contains administrative rules relating to taxes on tobacco products.
- Inventory Tobacco Letter - The Department is aware certain distributors are having issues with beginning inventory not matching ending inventories on monthly filings. Please note the beginning inventory of the month should always match the prior reported month’s ending inventory. Affected distributors will be receiving a letter requesting that they amend their filing as soon as possible.
- The Arizona Attorney General’s Office - Information regarding the Arizona Cigarette Directory, delivery sales ban and other tobacco laws.
- Tobacco Luxury Tax Forms
Please note that most tobacco tax transactions must be completed electronically through Arizona Luxury Tax Online (“ALTO”).
- For more information or for assistance, please contact the Tobacco Tax Unit at (602) 716-7808.
- Brand Codes Presentation