An Act to Provide for Licensing of and Tax Collection from Remote Retail Sellers of Pipe Tobacco and Premium Cigars
Maine Legislature, Session 131, LD 1923
Committee: Taxation
Sponsors: POULIOT
Amends: 22 MRSA §1551, 22 MRSA §1555-B, 22 MRSA §1555-C, 22 MRSA §1555-D, 22 MRSA §1555-F, 36 MRSA §4401, 36 MRSA §4402, 36 MRSA §4403, 36 MRSA §4404, 36 MRSA §4404-A

Legislative Document
No. 1923
S.P. 785
In Senate, May 11, 2023
An Act to Provide for Licensing of and Tax Collection from Remote 
Retail Sellers of Pipe Tobacco and Premium Cigars
Reference to the Committee on Taxation suggested and ordered printed.
DAREK M. GRANT
Secretary of the Senate
Presented by Senator POULIOT of Kennebec.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  22 MRSA §1551, sub-§6 is enacted to read:
6.  Pipe tobacco.  "Pipe tobacco" means a tobacco product that, because of its 
appearance, type, packaging or labeling, is suitable for use by and likely to be offered to or 
purchased by a consumer as a tobacco product to be smoked in a pipe.
Sec. 2.  22 MRSA §1551, sub-§7 is enacted to read:
7.  Remote retail seller.  "Remote retail seller" has the same meaning as in Title 36, 
section 4401, subsection 6-B.
Sec. 3.  22 MRSA §1555-B, sub-§1, as amended by PL 2017, c. 308, §6, is further 
amended to read:
1.  Retail sales.  Tobacco products, except for pipe tobacco and premium cigars sold 
by remote retail sellers, may be sold at retail only in a direct, face-to-face exchange in 
which the purchaser may be clearly identified.  For direct, face-to-face sales, employees 
who sell tobacco products must be at least 17 years of age.  An employee who is 17 years 
of age or older and under 21 years of age may sell tobacco products only in the presence of 
an employee who is 21 years of age or older and is in a supervisory capacity.
Sec. 4.  22 MRSA §1555-C, as amended by PL 2009, c. 652, Pt. A, §30, is repealed.
Sec. 5.  22 MRSA §1555-D, first ¶, as amended by PL 2009, c. 398, §4 and affected 
by §6, is further amended to read:
A person may not knowingly transport or cause to be delivered to a person in this State 
a tobacco product purchased from a person who is not licensed as a tobacco retailer or 
remote retail seller in this State, except that this provision does not apply to the 
transportation or delivery of tobacco products to a licensed tobacco distributor or tobacco 
retailer or from a remote retail seller to a consumer.
Sec. 6.  22 MRSA §1555-F, sub-§1, ¶A, as enacted by PL 2009, c. 398, §5 and 
affected by §6, is amended to read:
A.  A tobacco product may not be shipped to anyone other than a licensed tobacco 
distributor or licensed tobacco retailer in this State, except that a remote retail seller 
may ship pipe tobacco and premium cigars to a consumer.
Sec. 7.  36 MRSA §4401, sub-§1-A, as enacted by PL 2011, c. 285, §11, is amended 
to read:
1-A.  Delivery sale.  "Delivery sale" means a sale of tobacco products, other than pipe 
tobacco and premium cigars, to a consumer in this State when:
A.  The purchaser submits the order for the sale by means of telephonic or other 
electronic method of voice transmission, the Internet or a delivery service; or
B.  The tobacco products are delivered by use of a delivery service.
Sec. 8.  36 MRSA §4401, sub-§1-B is enacted to read:
1-B.  Consumer.  "Consumer" has the same meaning as in Title 22, section 1551, 
subsection 1-A.
Sec. 9.  36 MRSA §4401, sub-§4-A is enacted to read:
4-A.  Pipe tobacco.  "Pipe tobacco" has the same meaning as in Title 22, section 1551, 
subsection 6.
Sec. 10.  36 MRSA §4401, sub-§4-B is enacted to read:
4-B.  Premium cigar.  "Premium cigar" has the same meaning as in Title 22, section 
1551, subsection 5.
Sec. 11.  36 MRSA §4401, sub-§6-A is enacted to read:
6-A.  Remote retail sale.  "Remote retail sale" means any sale of pipe tobacco or 
premium cigars to a consumer in this State when:
A.  The consumer submits the order for the sale when the remote retail seller is not in 
the consumer's physical presence, including, but not limited to, through a telephone or 
other method of voice transmission, the mail, the Internet or other online service; or
B.  The pipe tobacco or premium cigars are delivered to the consumer and the consumer 
takes possession of the pipe tobacco or premium cigars when the remote retail seller is 
not in the consumer's physical presence, including, but not limited to, through a 
common carrier, private delivery service or other method of delivery.
Sec. 12.  36 MRSA §4401, sub-§6-B is enacted to read:
6-B.  Remote retail seller.  "Remote retail seller" means a person located within or 
outside of this State that meets the requirements of section 4404-A, subsection 2-A to make 
remote retail sales.
Sec. 13.  36 MRSA §4401, sub-§7-B is enacted to read:
7-B.  Stock keeping unit.  "Stock keeping unit" means the unique identifier assigned 
by a distributor or remote retail seller to a tobacco product to track inventory.
Sec. 14.  36 MRSA §4402, sub-§1, as amended by PL 2019, c. 379, Pt. B, §15, is 
repealed and the following enacted in its place:
1.  Generally.  Every distributor and remote retail seller shall obtain a license from the 
assessor before engaging in business in this State in accordance with this subsection.  
A.  A retailer required to be licensed as a distributor pursuant to this section must also 
hold a current retail tobacco license issued under Title 22, chapter 262‑A, subchapter 
1.  A distributor's license must be prominently displayed on the premises of the 
business covered by the license and may not be transferred to any other person. A 
distributor's license issued pursuant to this section is not a license within the meaning 
of that term in the Maine Administrative Procedure Act.
B.  A retailer required to be licensed as a remote retail seller pursuant to this section 
must also hold a current retail tobacco license issued under Title 22, chapter 262-A, 
subchapter 1. A remote retail seller's license issued pursuant to this section must be 
issued for the remote retail seller's principal place of business, whether or not the 
principal place of business is in the State. A remote retail seller is not required to 
display the license. A remote retail seller's license issued pursuant to this section is not 
a license within the meaning of that term in the Maine Administrative Procedure Act.
Sec. 15.  36 MRSA §4402, sub-§2, as enacted by PL 2005, c. 627, §7, is repealed 
and the following enacted in its place:
2.  Applications; forms.  Every license application must be made on a form prescribed 
by the assessor and must state the name and address of the applicant, the address of the 
applicant's principal place of business and such other information as the assessor may 
require for the proper administration of this chapter.
A.  A person outside the State who ships or transports tobacco products to a retailer in 
this State must make application as a distributor and be granted by the assessor a license 
subject to all the provisions of this chapter and agree, upon applying for a license, to 
submit that person's books, accounts and records to examination by the bureau during 
reasonable business hours and to accept service of process by mail when service is 
made in any proceeding involving enforcement of this chapter.
B.  A person that ships or transports pipe tobacco or premium cigars must make 
application as a remote retail seller and be granted by the assessor a license subject to 
all the provisions of this chapter and agree, upon applying for a license, to submit that 
person's books, accounts and records to examination by the bureau during reasonable 
business hours and to accept service of process by mail when service is made in any 
proceeding involving enforcement of this chapter.
Sec. 16.  36 MRSA §4402, sub-§4, as enacted by PL 2005, c. 627, §7, is amended 
to read:
4.  Penalties.  The following penalties apply to a violation of this section.
A.  A distributor or remote retail seller that imports into this State any tobacco product 
without holding a distributor's license issued by the assessor pursuant to this section 
commits a civil violation for which a fine of not less than $250 and not more than $500 
must be adjudged.
B.  A distributor or remote retail seller that violates paragraph A after having been 
previously adjudicated as violating paragraph A commits a civil violation for which a 
fine of not less than $500 and not more than $1,000 must be adjudged for each 
subsequent violation.
C.  A distributor or remote retail seller that sells at wholesale or retail, offers for sale 
at wholesale or retail or possesses with intent to sell at wholesale or retail any tobacco 
product without holding a distributor's license issued by the assessor pursuant to this 
section commits a civil violation for which a fine of not less than $250 and not more 
than $500 must be adjudged.
D.  A distributor or remote retail seller that violates paragraph C after having been 
previously adjudicated as violating paragraph C commits a civil violation for which a 
fine of not less than $500 and not more than $1,000 must be adjudged for each 
subsequent violation.
Sec. 17.  36 MRSA §4402, sub-§5, as amended by PL 2019, c. 379, Pt. B, §17, is 
further amended to read:
5.  Surrender, revocation or suspension.  When the business with respect to which a 
license was issued pursuant to this section is sold or ceases to do business in this State, the 
holder of the license shall immediately surrender it to the assessor.  The assessor may 
revoke or suspend the license of any distributor or remote retail seller for failure to comply 
with any provision of this chapter or if the person no longer imports or sells tobacco 
products.  A license that has been revoked or suspended pursuant to this subsection must 
be immediately surrendered to the assessor. A person aggrieved by a revocation or 
suspension may request reconsideration as provided in section 151.
Sec. 18.  36 MRSA §4403, as amended by 2019, c. 530, Pt. A, §§3 to 5, is further 
amended by enacting at the beginning a new paragraph to read:
A tobacco product may be taxed only once in accordance with this section.
Sec. 19.  36 MRSA §4403, sub-§2, as amended by PL 2019, c. 530, Pt. A, §4, is 
further amended to read:
2.  Other tobacco.  A tax is imposed on cigars, pipe tobacco and other tobacco intended 
for smoking at the rate of 20% of the wholesale sales price beginning October 1, 2005.  
Beginning January 2, 2020, a tax is imposed on all tobacco products, other than those 
subject to tax under subsection 1 or 2-A, at the rate of 43% of the wholesale sales price.  
Beginning January 2, 2020, the tax rate imposed pursuant to this subsection is subject to 
adjustment pursuant to subsection 5.
Sec. 20.  36 MRSA §4403, sub-§2-A is enacted to read:
2-A.  Pipe tobacco and premium cigars.  Beginning January 1, 2024, a tax is imposed 
on pipe tobacco and premium cigars sold by remote retail sellers at the rate of 43% of the 
retail sales price at the time of a remote retail sale to a consumer in this State. For purposes 
of this subsection, "retail sales price" means:
A.  The actual cost paid by a remote retail seller for the pipe tobacco or premium cigar 
as designated by the stock keeping unit as supported by documentation from the remote 
retail seller; or
B.  If documentation under paragraph A is unavailable, the average of the actual cost 
paid by a remote retail seller for the pipe tobacco or premium cigar as designated by 
the stock keeping unit over the 12 calendar months before January 1st of the year in 
which the remote retail sale occurs.
Sec. 21.  36 MRSA §4403, sub-§3, as amended by PL 2005, c. 627, §9, is further 
amended to read:
3.  Imposition.  The tax is imposed at the time the distributor or remote retail seller 
brings or causes to be brought into this State tobacco products that are for sale to consumers 
or to retailers or for use or at the time tobacco products are manufactured or fabricated in 
this State for sale in this State.
Sec. 22.  36 MRSA §4404, as amended by PL 2019, c. 379, Pt. B, §§19 and 20, is 
repealed and the following enacted in its place:
§4404.  Returns; payment of tax and penalty
1.  Distributor returns.  This subsection governs distributor returns.  
A.  Every distributor subject to the licensing requirement of section 4402 shall file, on 
or before the last day of each month, a return on a form prescribed and furnished by 
the assessor together with payment of the tax due under this chapter.  The return must 
report all tobacco products held, purchased, manufactured, brought in or caused to be 
brought in from outside the State or shipped or transported to retailers within the State 
during the preceding calendar month.  Every distributor shall keep a complete and 
accurate record at its principal place of business to substantiate all receipts and sales of 
tobacco products.
B.  The return must include further information as the assessor may prescribe and must 
show a credit for any tobacco products exempted as provided in section 4403. Records 
must be maintained to substantiate the exemption. Tax previously paid on tobacco 
products that are returned to a manufacturer or a distributor because the product has 
become unfit for use, sale or consumption and for tobacco products that are returned 
to a distributor that are subsequently destroyed by the distributor may be taken as a 
credit on a subsequent return. The assessor may either witness the destruction of the 
product or may accept another form of proof that the product has been destroyed by 
the distributor or returned to the manufacturer.
2.  Remote retail seller returns.  This subsection governs remote retail seller returns.
A.  A remote retail seller subject to the licensing requirement of section 4402 shall file, 
on or before the last day of each month, a return on a form prescribed and furnished by 
the assessor together with payment of the tax due under this chapter. The return must 
report all tobacco products brought in or caused to be brought in from outside the State 
or shipped or transported to consumers within the State during the preceding calendar 
month. A remote retail seller shall keep a complete and accurate record at its principal 
place of business to substantiate all receipts and sales of tobacco products to consumers 
in the State.
B.  The return must include further information as the assessor may prescribe and must 
show the total actual cost or actual cost list price paid by the remote retail seller for the 
pipe tobacco or premium cigar as designated by the stock keeping unit for the previous 
calendar month. Records must be maintained to substantiate the exemption. The return 
must show the amount of tax due for all remote retail sales made from within or outside 
the State to a consumer within the State during the preceding calendar month. The 
remote retail seller shall remit the tax at the time the return is filed.
3.  Other returns.  A person who is not a distributor licensed pursuant to this chapter 
who imports, receives or otherwise acquires tobacco products for use or consumption in 
the State from a person other than a licensed distributor shall file, on or before the last day 
of the month following each month in which tobacco products were acquired, a return on 
a form prescribed by the assessor together with payment of the tax imposed by this chapter 
at the rate provided in section 4403. The return must report the quantity of tobacco products 
imported, received or otherwise acquired from a person other than a licensed distributor or 
retailer during the previous calendar month and additional information the assessor may 
require.
Sec. 23.  36 MRSA §4404-A, sub-§1, as enacted by PL 2005, c. 627, §11, is 
amended to read:
1.  Generally.  Except as provided in subsections 2, 2-A and 3, only a person licensed 
pursuant to section 4402 may import tobacco products into this State.
Sec. 24.  36 MRSA §4404-A, sub-§2-A is enacted to read:
2-A.  Remote retail sellers.  A person, whether inside or outside the State, may not 
sell pipe tobacco or premium cigars through a remote retail sale to a consumer in this State 
unless the person:
A.  Obtains a license as a remote retail seller under section 4402, subsection 1; 
B. Provides for age verification through an independent, 3rd-party age verification 
service that compares the personal information entered by the consumer during the 
ordering process with the information available from a commercially available 
database or aggregate of databases that is regularly used by government agencies and 
businesses for the purpose of age and identity verification;
C.  Registers under section 1754-B, subsection 1-B, paragraph B if the person's gross 
sales from delivery of tangible personal property or taxable services into this State in 
the previous calendar year or current calendar year exceed $100,000; 
D.  Collects and remits the tax imposed under section 4403, subsection 2-A if the 
person is required to register under section 1754-B, subsection 1-B, paragraph B; and
E.  If required under paragraph D to pay the tax imposed under section 4403, subsection 
2-A and the person is not calculating costs based on section 4403, subsection 2-A, 
paragraph A, submits to the assessor quarterly the information required in section 4403, 
subsection 2-A, paragraph B for the pipe tobacco or premium cigar as designated by 
the stock keeping unit offered for remote retail sale by the person.
SUMMARY
This bill authorizes the sale of pipe tobacco and premium cigars to consumers in this 
State through remote retail sales transactions. It also authorizes the delivery of those 
tobacco products to consumers in this State and authorizes consumers to accept delivery of 
those tobacco products. The bill establishes licensing requirements for remote retail sellers 
and requirements for the payment of tax on pipe tobacco and premium cigars sold through 
remote retail sales.