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HOUSE OF REPRESENTATIVES - FLOOR VERSION
STATE OF OKLAHOMA
2nd Session of the 59th Legislature (2024)
HOUSE BILL 3971 By: Echols
AS INTRODUCED
An Act relating to vapor products; amending 63 O.S.
2021, Section 1-229.35, as amended by Secti on 1,
Chapter 95, O.S.L. 2022 (63 O.S. Sup p. 2023, Section
1-229.35), which relates to vapo r product
manufacturer attestation , material change, directory
of manufacturers and p roducts and unlawful acts;
directing attestation s be filed with the Attorney
General; clarifying attestation information;
directing filing of certain reports ; clarifying
material change informa tion; establishing certain
fines for certain violations; providing for criminal
penalties; amending 68 O.S. 2021, Section 400.1, as
amended by Section 3, Chapter 285, O.S.L. 2023 (68
O.S. Supp. 2023, Section 400.1), which relates to
tobacco products tax enforcement unit, duties,
creation of industry advisory committee, and a nnual
report; adding vapor products; amending 68 O.S. 2021,
Section 400.5, as amended by Section 4, Chapter 285,
O.S.L. 2023 (68 O.S. Supp. 2023, Section 400.5),
which relates to purchase regulations, fines, and
list of licensed retailers; adding vapor products;
amending 68 O.S. 2021, Section 401, which relates to
definitions; amending definitions; adding a
definition; amending 68 O.S. 2021, Section 412, which
relates to untaxed merchandise, bond, and penalties;
changing untaxed merchandise to tobacco products ;
amending 68 O.S. 2021, Section 414, which relates to
trucks and vehicles, and untaxed merchandise; adding
vapor products; changing untaxed merchandise to
tobacco products; amending 68 O.S. 2021, Section 415,
as amended by Section 2, Chapter 285, O.S.L. 2023 (68
O.S. Supp. 2023, Section 415 ), which relates to Tax
Commission licenses and fees, and penalties; adding
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vapor products; amending 68 O.S. 2021, Section 420 .1,
which relates to tobacco product distributors and
retailers, required record -keeping, adding vapor
products; amending 68 O.S. 2021, Section 422, which
relates to sellers; adding vapor products; and
providing for an effective date .
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 63 O.S. 2021, Section 1 -229.35, as
amended by Section 1, Chapter 95, O .S.L. 2022 (63 O.S. Supp. 2023,
Section 1-229.35), is amended to read as follows:
Section 1-229.35 A. Beginning July 1, 2023, and annually
thereafter, every manufacturer o f a vapor product that is sold or
intended to be sold in this state, whether direct ly or through a
distributor wholesaler, retailer, or similar intermediary or
intermediaries, shall execute and deliver an attestation under
penalty of perjury to the Oklahoma Alcoholic Beverage Laws
Enforcement (ABLE) Commission Attorney General certifying that, as
of the date of such attestation , such manufacturer, has completed
all necessary registrations required pursuant to Section 376 of
Title 15 of the United States Code , and either of the following :
1. The vapor product was available for purchase on the market
in the United States as of August 8, 2016, and the manufacturer has
applied for a marketing order pursuant to Section 387j of Title 21
of the United States Code for the vapor product by submitting a
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Premarket Tobacco Pro duct Application on or b efore September 9,
2020, to the United Sta tes Food and Drug Administration (FDA); or
and either of the following is true:
a. the premarket tobacco product application for the
product remains under review by the FDA, and neither a
marketing authorization no r a marketing denial order
has been issued, or
b. the FDA has issued a marketing denial orde r for the
vapor product from the FDA; however, the agency or a
federal court has issued a stay order or injunction .
2. The manufacturer has received a marketing order or other
authorization for the vapor product from the FDA pursuant to Section
387j of Title 21 of the United States Code.
B. In addition to the requirements in subsection A of this
section, each manufacturer shall provide the following:
1. Copies of monthly reports filed pursuant to the fede ral
Prevent All Cigarette Trafficking (PACT) Act, and;
2. A copy of the cover page of the Premarket Tobacco
Application with evidence of receipt of the application by the FDA
or a copy of the cover page of the mar keting order or other
authorization issued pursuant to Section 387j of Title 21 of the
United States Code, whichever is applicable.
C. The manufacturer shall notify the ABLE Commission Attorney
General within thirty (30) days of any material change to the
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attestation, including whether the FDA ha s issued or not issued a
market order or other authorization or has ordered the manufacturer
to remove the vapor product, either temporarily or pe rmanently, from
the United States market any of the following:
1. A marketing authorization pursuant to Secti on 387j of Title
21 of the United States Code ;
2. An order revoking a marketing authorization with respect to
a manufacturer or a product ; or
3. Any notice of action taken by the FDA affecting the ability
of the new product to be introduced or delivered into interstate
commerce for commercial distribution.
C. D. The ABLE Commission Attorney General shall develop a
directory listing all of the ma nufacturers that have provide d
attestations that comply with subsecti on A of this section and all
vapor products that are listed in such attest ations. The ABLE
Commission Attorney General shall:
1. Make the directory available for public inspection on its
website on or before October 1, 2023; and
2. Update the directory as necessary to corr ect mistakes and to
add or remove manufacturers or vapor products on a monthly basis to
maintain the directory in conformity with the requirements of this
section; and
3. Send monthly notifications to each wholesaler and re tailer
that has qualified or registered with the Attor ney General, by
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electronic communication, containi ng a list of all changes that have
been made to the directory in the previous month. The Attorney
General shall also make the information a vailable in a prominent
place on the Attorney General 's public website.
D. It shall be unlawful for an y person, directly or indirectly,
to knowingly manufacture, distrib ute, sell, barter, or furnish in
this state any vapor product that is not included i n the directory.
E. The Attorney General shall provide manufacturer s notice and
an opportunity to cure deficiencies before removing manufacturers or
products from the direc tory.
1. The Attorney General may not remove the manufacturer or its
vapor products from the directory until at least fifteen (15) days
after the manufacturer has been given notice of an intended action.
Notice shall be sufficient and be deemed immediatel y received by a
manufacturer if the notice is sent either electronically or by
facsimile to an electronic ma il address or facsimile number, as the
case may be, provided by the manufactur er in its most recent
attestation filed under subsection A of this section.
2. The manufacturer of vapor products shall have fifteen (15)
business days from the date of service of the notice of the Attorney
General's intended action to establish that the manufacturer should
be included in the directory.
3. A determination by the Attorney General to not include or to
remove from the directory a manufacturer or a manufacturer 's vapor
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product shall be subject to review by the filing of a civil action
for prospective declaratory or injunctive relief.
F. Each certifying manufac turer of vapor products shall pay an
initial fee of Five Thousand Dollars ($5,000.00) to offset the costs
incurred by the Attorney General for process ing the attestations and
operating the directory. The Attorney General shall collect an
annual renewal fee of Two Thousand Five Hundred Dollars ($2,500.00)
to offset the costs associated with maintaining the direc tory and
satisfying the requirements of th is section. The fees received
under this section by the Attorney General shall be used by the
Attorney General exclusively for processing the attestations and
operating and maintaining the directory.
G. Beginning October 1, 2023, or on the date that the Attorney
General first makes the directory available for public inspection on
its website as provided in subsectio n D of this section, whichever
is later, a manufacturer of vapor products who offers for sale a
vapor product not listed on the directory is s ubject to a daily fine
of One Thousand Dollars ($1,000.00) for each vapor product offered
for sale in violation of this section until th e offending vapor
product is removed from the market or until the offending vapor
product is properly listed on the dire ctory.
H. If there is a material change to the st atus of a vapor
product requiring it to be removed from the directory established
and maintained by the Attorney General pursuant to subsection D of
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this section, each wholesaler shall have twenty-one (21) days, and
each retailer shall have forty-two (42) days, from the day suc h
vapor product is removed from the directory to remove such vapor
products from its inventory and return such vapor products to the
manufacturer of such vapor products for disposal. The Attorney
General or its agents, which shall in clude the Oklahoma Alcoholic
Beverage Laws (ABLE) Commission and local law enforcement, shall
have the power to confiscate and destr oy any vapor products that are
not listed on the directory established and maintained by the
Attorney General pursuant to su bsection D of this section, and which
are in possession of a wholesaler or retailer. The cost of such
confiscation and destruction shall be borne by the perso n from whom
the products are confiscated.
I. Beginning October 1, 202 3, or on the date that the Attorney
General first makes the directory available for public inspection on
its website as provided in subsection D of this section, whichever
is later, no retailer or wholesaler of vapor products may sell,
offer for sale, or otherwise distribute a vapor product not listed
on the directory.
J. If a retailer or wholesaler violates subsection I of this
section, the retailer or wholesaler is subject to the following
penalties:
1. For a first violation, a ci vil penalty of not more than Five
Hundred Dollars ($500.00).
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2. For a second violation within a twelve-month period, a civil
penalty of at least Two Thousand Five Hundred Dollars ($2,500.00),
but not more than Five Thousand Dollars ($5,000.00). The Attorney
General shall instruct the Oklahoma Tax Commis sion to suspend the
license of the retailer or wholesaler for fourteen (14) days.
3. For a third or any subsequent violation within a twelve-
month period, a civil penalty of at least Five Thousand Dollars
($5,000.00). The Attorney General shall instruct the Oklahoma Tax
Commission to revoke the license of the retailer or wholesaler.
L. Any manufacturer that falsely represents any of the
information required by subsection A or B of this section shall be
guilty of a misdemeanor for each false representatio n.
M. Any other violation of this section shall result in a fine
of Five Hundred Dollars ($500.00) per offense. In any action
brought by the state to enforce this section, the state shall be
entitled to recover the costs of inves tigation, costs of action , and
reasonable attorney fees.
N. Each wholesaler and retailer shall be subject to at least
two unannounced compliance checks by the Attorney General or its
agents, which shall include ABLE or local law enforcement, annually
for purposes of enforcing thi s section, and such co mpliance checks
may be conducted at any time during normal operating hours.
Unannounced follow-up compliance checks of all noncompliant
tobacco wholesalers and tobacco retailers are r equired within thirty
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(30) days after any violation of this article. The Attorney General
shall publish the results of all compliance checks at least annually
and shall make the results available to the public on request.
O. The Attorney General shall ad opt rules for the
implementation and enforcement o f this section.
SECTION 2. AMENDATORY 68 O.S. 2021, Section 400.1, as
amended by Section 3, Chapter 285, O.S.L. 2023 (68 O.S. Supp. 2023,
Section 400.1), is amended to read as fol lows:
Section 400.1 A. For the purpose of enforci ng the tobacco tax
laws of this state, the Oklahoma Tax Commission is authorized,
contingent upon the av ailability of funds, to establish and maintain
a unit to be known as the "Tobacco Products Tax Enforcement Unit".
The unit shall enforce the tobacco ta x laws of this state an d ensure
that all taxes are paid on tobacco products or vapor products by:
1. Confirming that all entities selling tobacco products or
vapor products in this state are properly licensed as provided in
Section 400 et seq. of Title 68 of the Oklahoma Statutes;
2. Verifying that all retailers are only purchasing tobacco
products or vapor products from wholesalers licens ed by the Tax
Commission;
3. Providing a dedicated telephone line and email address for
licensed wholesalers, licen sed retailers and the general public to
report suspected violations of tobacco tax l aws; provided, no
entity, individual or those who report violations on behalf of a
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licensed wholesaler or retailer shall be required to disclose their
identity;
4. Auditing licensed wholesalers and retailers to ensure all
tobacco product taxes are paid;
5. Issuing fines for violations as provided in Section 4 00 et
seq. of Title 68 of the Oklahoma Statutes;
6. Conducting wholesale and retail toba cco inspections to find
and confiscate untaxed tobacco products or vapor products;
7. Establishing data-sharing programs with tax dep artments in
surrounding states related to tobacco p roduct taxes;
8. Creating an industry advisory committee including licensed
wholesalers and retailers who may represent the entity related to
tobacco products tax enforcement concer ns and suggestions. The
industry advisory committee shall be composed of five (5) members as
follows:
a. two members who are licensed wholesalers to be
appointed by the Governor,
b. one member who is a licensed retailer to be appointed
by the President Pro Tempore of the Oklahoma State
Senate,
c. one member who is a licensed retailer to be appointed
by the Speaker of the Oklahoma House of
Representatives, and
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d. one member who is a licensed wholesaler to be
appointed by the four members provided for in
subparagraphs a through c of this paragraph.
The committee shall meet quarterly. The Oklahoma Tax Commission
shall promulgate rules establishing minimum requirements as ma y be
deemed necessary to carry out the purposes of the committee; and
9. Working with law enforcement and conducting investigations
to stop illegal acquisition and s hipment of tobacco products or
vapor products by persons not licensed to sell tobacco products or
vapor products in this state.
B. The Tax Commission shall annually submit a report to the
Governor, President Pro Tempore of the Senate and Speaker of the
House of Representatives listing the number of wholesale and retail
tobacco inspections conducted, the amount of untaxed tobac co
products or vapor products confiscated, the number of tobacco
products tax audits conducted, the amount of taxes assessed and the
amount of taxes collected as the result of audits and confiscations,
the number of suspected violations reported and the actions taken in
response, and the number of fines issued and the amount of fines
collected.
SECTION 3. AMENDATORY 68 O.S. 2021, Section 400.5, as
amended by Section 4, Chapter 28 5, O.S.L. 2023 (68 O.S. Supp. 2023,
Section 400.5), is amended to read as follows:
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Section 400.5 A. Retailers shall only purchase tobacco
products or vapor products from an Oklahoma-licensed tobacco
wholesaler evidenced by a cur rent listing provided by the Oklahoma
Tax Commission. All purchase invoices shall contain the license
number of the wholesaler and shall be made available for inspection
by the Tax Commission. Any purchases of tobacco products or vapor
products from a person who is not holding a current Oklahoma
wholesale tobacco license shall be punishable by a fine of the
greater of One Thousand Do llars ($1,000.00) or five times the unpaid
tax on such products. The fine shall be in addition to payment of
any unpaid tobacco products tax and the forfeiture o f any tobacco
products or vapor products to the State of Oklahoma as provided by
Section 414 of this title. A second or subsequent offense shall be
punishable by revocation of the license. If the retailer fails to
pay a fine within thirty (30) days, the retailer's license shall be
suspended until the fine is paid in full.
B. The Oklahoma Tax Commission shall make available for all
licensed retailers a list of currently licensed wholesalers at least
monthly or through the use of a website maintained by or on behalf
of the Oklahoma Tax Commission with updates made as often as
practical but no less than every thirty (30) days.
C. Fines collected pursuant to the provisions of subsection A
of this section shall be deposit ed in the Tobacco Products Tax
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Enforcement Unit Revolving Fund created in Secti on 400.6 of this
title.
SECTION 4. AMENDATORY 68 O.S. 2021, Section 401, is
amended to read as follows:
Section 401. For the purpose of this article:
1. The word "person" shall mean any individual, c ompany,
limited liability com pany, corporation, partnership, association,
joint adventure, estate, tr ust or any other group, or combination
acting as a unit, and the plural as well as the singular, unless t he
intention to give a more limited meaning is dis closed by the
context;
2. The term "Tax Commission" shall mean the Oklahoma Tax
Commission;
3. The word "wholesaler" shall include dealers whose pr incipal
business is that of a wholesale dealer , and who is known to the
trade as such, who shall sell any tobacco products or vapor products
to licensed retail dealers only for the purpose of resale ;
4. The word "retailer" shall include every dealer, other than a
wholesaler as defined above, whose principal bus iness is that of
selling merchandise at retail, wh o shall sell, or offer for sa le,
tobacco products or vapor products;
5. The word "consumer" shall mean a person who comes into
possession of tobacco or vapor products for the purpose of consuming
it;
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6. The words "first sale" shall mean and include the f irst
sale, or distribution, o f tobacco products in intrastate commerce,
or the first use or consumption of tobacco products within this
state;
7. The words "tobacco products" shall mean any cigars, smoking
tobacco and smokeless tobacco;
8. The term "cigars" shall include any roll of tobacco for
smoking, irrespective o f size or shape and irrespective of the
tobacco being flavored, adulterated or mixe d with any other
ingredients, where such roll has a wra pper made chiefly of tobacco;
9. The term "smokeless tobacco" shall mean all smokeless
tobacco including snuff and chewing tobacco;
10. The term "snuff" shall mean any finely cut, ground or
powdered tobacco that is not intended to be smoked;
11. The term "chewing tobacco" means any leaf tobacco that is
not intended to be smoked;
12. The term "smoking tobacco" shall mean any pipe tobacco or
roll-your-own tobacco;
13. The term "pipe tobacco" means any tobacco which, because of
its appearance, type, packaging or labeling, is suitable for use and
likely to be offered to, or purchased by, consumers as tobacco to be
smoked in a pipe;
14. The term "roll-your-own tobacco" means any tobacco which ,
because of its appearance, type, packaging or lab eling, is suitable
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for use and likely to be offered to, or purchased by, consumers as
tobacco for making cigarettes or cigars, or for use as wrappers
therof; and
15. The term "untaxed" means that the full amo unt of tax has
not been paid as required by Section 400 et seq . of this title; and
16. The term "vapor product" means noncombustible products,
that may or may not contain nicotine, that employ a mechanical
heating element, battery, electronic circuit or other me chanism,
regardless of shape or size, that can be used to produce a vapor
from a solution. Vapor products shall include any vapor cartri dge
or other container with or without nicotine or other form that is
intended to be used with an electronic cigarette , electronic cigar,
electronic cigarillo, electronic pipe o r similar product or device,
and any vapor cartridge or other container of a sol ution that may or
may not contain nicotine, that is intended to be used with or in an
electronic cigarette, electroni c cigar, electronic cigarillo, or
electronic device. Vapor products do not include any products
regulated by the United States Food and Dr ug Administration under
Chapter V of the Food, Drug , and Cosmetic Act.
SECTION 5. AMENDATORY 68 O.S. 202 1, Section 412, is
amended to read as follows:
Section 412. A. Every wholesaler who purchases or allows to
come into his or her possession any untaxed merchandise coming under
the scope of this article tobacco products shall file with the
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Oklahoma Tax Commission a surety or collateral or cash bond in the
amount of Twenty-five Thousand Dollars ($25,000.00), payable to the
State of Oklahoma and conditioned upon compliance with the
provisions of this article and the rules of the Tax Commission.
B. Any consumer who purchases or brings into this state untaxed
tobacco products whereon the tax would be more than twenty-five
cents ($0.25) is subject to the tax thereon. Upon failure to pay
the tax levied in this article, the consumer shall be su bject to a
fine of not more than Five Hundred Dollars ($500.00 ) or not less
than Twenty-five Dollars ($25.00) to be deposited in the Tobacco
Products Tax Enforcement Unit Revolving Fund created in Section 7 of
Enrolled House Bill No. 2292 of the 1 st Session of the 58th Oklahoma
Legislature. Provided, any person in p ossession of more than one
thousand small or large cigars or two hundred sixteen (2 16) ounces
of smokeless or smoking tobacco in packages or containe rs for which
the tax required by law has not been paid shall be pun ished by
administrative fines in the manner and amounts provided in
subsection D of Section 418 of this title.
SECTION 6. AMENDATORY 68 O.S. 2021, Section 414, is
amended to read as follows:
Section 414. A. Each truck or vehicle wherefrom tobacco
products or vapor products are sold shall be considered as a place
of business and required to have a wholesale license and a bond of
not less than Five Hundred Dollars ($500.00).
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B. Any person operating a truck or vehicle by selling,
exchanging or giving away untaxed merchandise covered by this
article tobacco products shall be deemed guilty of violation of same
and shall be penalized as hereinbefore set forth, and untaxed
merchandise tobacco products handled by this person as well as the
vehicle used to transport the untax ed tobacco products shall be
subject to confiscat ion by authorized agents of the Tax Commission
or duly authorized peace officers.
C. After seizure or confiscation by such agent or officer, the
merchandise tobacco products and property shall be held until all
taxes, interest and pena lties due have been paid. If not paid
within five (5) days after date of seizure, it sh all be sold at
public sale by the sheriff of the county where con fiscated, after
being advertised by posting of notice of such sale in five public
places in the county where the sale is to occur. The proceeds of
the sale shall be applied to taxes, interes t and penalties due and
to the cost of the sale, and the rema inder, if any, shall be paid to
the State Treasurer, by the sheriff conducting such sale, to be
deposited to the credit of the General Revenue Fund.
SECTION 7. AMENDATORY 68 O.S. 2021, Section 415, as
amended by Section 2, Chapter 285, O.S.L. 2023 (68 O.S. Supp. 2023,
Section 415), is amended to read as follows :
Section 415. A. Every wholesaler of tobacco pr oducts or vapor
products in this state, as a condition of car rying on such business,
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shall annually secure from the Oklahoma Tax Commission a written
license and shall pay an annual fee of Two Hundred Fifty Dollars
($250.00); provided, such fee shall not b e applicable if paid
pursuant to Section 304 of this title. The Tax Commission shal l
promulgate rules which provide a procedure for the issuance of a
joint license for any wholesaler making applicati on pursuant to this
section and Section 304 of this titl e. Application for such
license, which shall be made upon su ch forms as prescribed by the
Tax Commission, shall include the following:
1. The applicant's agreement to the jurisdiction of the Tax
Commission and the courts of this state for purposes of enf orcement
of the provisions of S ection 301 et seq. of this tit le; and
2. The applicant's agreement to abide by the provisions of
Section 301 et seq. of this title and the rules promulgated by the
Tax Commission with reference thereto. This license, which will be
for the ensuing year, m ust at all times be displayed in a
conspicuous place so that it can be seen. Persons operating more
than one place of business must secure a license for each place of
business. "Place of business" shall be construed to incl ude the
place where orders are received, or where tobacco pro ducts or vapor
products are sold. A "place of business" cannot be a location with
a physical residential address. The Tax Commission shall not issue
a license for a place of business with a phy sical residential
address. If tobacco products or vapor products are sold on or from
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any vehicle, the vehicle shall con stitute a place of b usiness, and
the license fee of Two Hundred Fifty Dollars ($250.00) shall be paid
with respect thereto. However, if the vehicle is owned or operat ed
by a place of business for which the regular license fee is paid,
the annual fee for t he license with resp ect to such vehicle shall be
only Ten Dollars ($10.00). The expiration for such vehicle license
shall expire on the same date as the current licen se of the place of
business.
B. Every retailer in this state, as a condition of carrying on
such business, shall secure from the Tax Commission a license and
shall pay therefor a fee of Thirty Dollars ($30 .00). Application
for such license, which shall b e made upon such forms as pres cribed
by the Tax Commission, shall include the following:
1. The applicant's agreement to the jurisdiction of the Tax
Commission and the courts of this state for purposes of enforcement
of the provisions of Section 301 et se q. of this title;
2. The applicant's agreement to abide by the provisions of
Section 301 et seq. of this ti tle and the rules promulgated by the
Tax Commission with reference thereto;
3. The applicant's agreement that it sha ll not purchase any
tobacco products or vapor products for resale from a supplier that
does not hold a current wholesaler 's license issued pursuant to this
section; and
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4. The applicant's agreement to sell tobacco products or vapor
products only to consumers.
Such license, which will be for the ensuing three (3) ye ars,
must at all times be displayed in a co nspicuous place so that it can
be seen. Upon expir ation of such license, the retailer to whom such
license was issued may obtain a renewal license which shall be valid
for three (3) years or until expiration of t he retailer's sales tax
permit, whichever is earlier, after which a renewal license shall be
valid for three (3) years. The manner and prorated fee for renewals
shall be prescribed by the Tax Commission. Every person operating
under such license as a ret ailer and who owns or operates more than
one place of business must secure a license for each place of
business. "Place of business" shall be construed to include places
where orders are received or where tobacco products or vapor
products are sold. A "place of business" cannot be a location with
a physical residential address. The Tax Commission shall n ot issue
a license for a plac e of business with a physical residential
address.
C. Nothing in this section shall be constr ued to prohibit any
person holding a retail license from also holding a wholesaler
license.
D. 1. All wholesale or retail licenses shall be nonassignable
and nontransferable from one person to another person. Such
licenses may be transferred from one lo cation to another location
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after an application has been filed with the Tax Commission
requesting such transfer and after the approva l of the Tax
Commission.
2. Wholesale and retail licenses shall be applied for on a form
prescribed by the Tax Commission. Any person operating as a
wholesaler or retailer must at all times have an effective unex pired
license which has been issued by the Tax Commission. If any such
person or licensee continues to operate as such on a license issued
by the Tax Commission whi ch has expired, or operates wi thout ever
having obtained from the Tax Commission such licen se, such person or
licensee shall, after b ecoming delinquent for a peri od in excess of
fifteen (15) days, pay to the Tax Commission, in addition to the
annual license fee, a penalty of Ten Dollar s ($10.00) per day on
each delinquent license for each day so operated in excess of
fifteen (15) days. The penalty provided for her ein shall not exceed
the annual license fee for such license. The penalties collected
pursuant to the provisions of this pa ragraph shall be deposited in
the Tobacco Products Tax Enforc ement Unit Revolving Fund created in
Section 400.6 of this title.
E. No license may be granted, maintained or renewed if any of
the following conditions apply to the applicant. For purposes of
this section, "applicant" includes any combination of p ersons owning
directly or indirectly, in the agg regate, more than ten p ercent
(10%) of the ownership interests in the applicant:
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1. The applicant owes Five Hundred Dollars ($500.00) or more in
delinquent tobacco products taxes;
2. The applicant had a who lesaler or retailer license revoked
by the Tax Commission within the pa st two (2) years; or
3. The applicant has been convicted of a crime relating to
stolen or counterfeit tobacco products or vapor products, or
receiving stolen or counterfeit tobacco products or vapor products.
F. No person or entity licensed pursuant to the provisions of
this section shall purchase tobacco products or vapor products from
or sell tobacco products or vapor products to a person or entity
required to obtain a license unless such person or entity has
obtained such license .
G. In addition to any civil or criminal penalty provided by
law, upon a finding that a licensee has violated any provision of
Section 301 et seq. of this title, the Tax Commission may revok e or
suspend the license or licenses of the licensee pursuant to the
procedures applicable to revocation of a license set forth in
Section 418 of this title.
SECTION 8. AMENDATORY 68 O.S. 2021, Section 42 0.1, is
amended to read as follows:
Section 420.1 A. Each wholesaler of tobacco products or vapor
products, as defined in Sectio n 400 of this title, shall maintain
copies of invoices or equivalent documen tation for each of its
facilities for every transaction in which the wholesaler is the
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seller, purchaser, consignor, consignee or recipient of tobacco
products or vapor products. The invoices or documentation shall
contain the wholesaler's tobacco license number and the retailer's
tobacco license number if the sale is to a retailer and the quantity
by brand style of the tobacco products invol ved in the transaction .
Each wholesaler shall maintain the documents requi red by this
subsection for a period of th ree (3) years.
B. Each retailer of tobacco products or vapor products, as
defined in Section 400 of this title, shall maintain copies of
invoices or equivalent documentation for eve ry transaction in which
the retailer receives or p urchases tobacco product s or vapor
products at each of its facilities . The invoices or documentation
shall show the name, address, and tobacco license number of the
wholesaler from whom, or the address of another facility of the same
retailer from which, the tobacco products or vapor products were
received, the quantity of each brand style re ceived in such
transaction, the date the tobacco pr oducts or vapor products were
received and the retail cigarette li cense number or sales tax
license number. Each retailer shall maintain th e documents required
by this subsection for a period of one (1) y ear.
SECTION 9. AMENDATORY 68 O.S. 2021, Section 422, is
amended to read as follows:
Section 422. All wholesalers or retailers selling or
distributing such tobacco product s or vapor products under the
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provisions of this act shall comply with the provisions of suc h
sections, and the rules and regula tions of the Oklahoma Tax
Commission as to such sale or distribution, and failure to so comply
shall constitute grounds for revo cation of any license issued t o the
wholesaler or retailer by the Tax Commission.
SECTION 10. This act shall become e ffective November 1, 2024.
COMMITTEE REPORT BY: COMMITTEE ON BUSINESS AND COMMERCE, dated
02/21/2024 - DO PASS.