PCA

North Carolina

Alerts & Updates

Key Contacts

North Carolina Department of Revenue
Tobacco Products Tax Unit
(919) 733-3651

North Carolina Department of the Secretary of State
Lobbying Compliance Division
(919) 807-2170

PCA Contact

Joshua Habursky
Glynn Loope joshua@premiumcigars.orgglynn@premiumcigars.org

Legislative Information

2019 Session Info
2019 Partisan Splits

Taxation

North Carolina imposes an excise tax on tobacco products other than cigarettes on the wholesale dealer or retail dealer who first acquires or otherwise handles tobacco products subject to the tax. A wholesale dealer or retail dealer who brings a tobacco product into North Carolina or is the original consignee of a tobacco product that is made elsewhere and shipped into North Carolina is considered the first person to handle the tobacco product. A retail dealer who acquires non-tax-paid tobacco products subject to the tax from a wholesale dealer is liable for any tax due on the products. A manufacturer who is not a retail dealer and who ships tobacco products to either a wholesale dealer or retail dealer may apply to the Secretary of Revenue to be relieved of paying the tax.

N.C. Gen. Stat. § 105-113.35

A city or county may not levy a privilege license tax on the sale of tobacco products.

N.C. Gen. Stat. § 105-113.3

The tax rate for tobacco products other than cigarettes is 12.8% of the cost price of the products, meaning the price a person liable for the tax paid for the products, before any discount, rebate, or allowance.

N.C. Gen. Stat. § 105-113.35(a)

Wholesale and retail dealers liable for the excise tax on tobacco products other than cigarettes must file the Monthly Other Tobacco Products Excise Tax Return (Form B-A-101) and the Tobacco Report Tax-Paid Products of Nonparticipating Manufacturers (Form B-A-7) within 20 days after the end of each month, even if no tax is due.

N.C. Gen. Stat. § 105-113.37

North Carolina SB 523 (2019) states that a licensed distributor shall file a monthly report in the form prescribed by the Secretary. The report covers cigarettes sold, shipped, delivered, or otherwise disposed of in this State in a calendar month and is due within 20 days after the end of the month covered by the report. The report shall show the quantity of all cigarettes transported or caused to be transported into the State by the licensed distributor or licensed manufacturer in the State for sales in this State and state the amount of tax due and shall identify any transactions to which the tax does not apply.

Form Type / NameForm Number / Link
Tobacco Products Tax Forms DatabaseTobacco Tax Forms Database

Cigar and Smoking Tobacco Definitions

“Smoking” means the use or possession of a lighted cigarette, lighted cigar, lighted pipe, or any other lighted tobacco product.

N.C. Gen. Stat. § 130A-492(16)

A “cigar” is a roll of tobacco wrapped in a substance that contains tobacco, other than a cigarette.

N.C. Gen. Stat. § 105-113.4(1b)

“Tobacco product” means a cigarette, a cigar, or any other product that contains tobacco and is intended for inhalation or oral use.

N.C. Gen. Stat. § 105-113.4(11a)

A “wholesale dealer” is either: (1) a person who acquires tobacco products other than cigarettes for sale to another wholesale dealer or to a retail dealer; or a manufacturer of products other than cigarettes.

N.C. Gen. Stat. § 105-113.4(14)

A “manufacturer” is a person who produces tobacco products or a person who contracts with another person to produce tobacco products and is the exclusive purchaser of the products under the contract.

N.C. Gen. Stat. § 105-113.4(6)

A “retail dealer” is a person who sells a tobacco product to the ultimate consumer of the product.N.C. Gen. Stat. § 105-113.4(9)

Restrictions

North Carolina State law prohibits smoking inside state government buildings and vehicles and in all areas of restaurants and bars with a roof or other overhead covering of any kind and walls or side coverings of any kind, regardless of the presence of openings for entrance and exit. 

A person who manages, operates, or controls a restaurant or bar in which smoking is prohibited must:

  • Conspicuously post signs clearly stating that smoking is prohibited. The signs may include the international “No Smoking” symbol, which consists of a pictorial representation of a burning cigarette enclosed in a red circle with a red bar across it.
  • Remove all indoor ashtrays and other smoking receptacles.
  • Direct a person who is smoking to extinguish the lighted tobacco product. 

N.C. Gen. Stat. § 130A-497

A local government may adopt and enforce ordinances, the Board of Health Rules, and policies restricting or prohibiting smoking that are more restrictive than state law and that apply in local government buildings, on local government grounds, in local vehicles, or in public places. A rule or policy adopted on or after July 1, 2009 must be approved by an ordinance adopted by the Board of County Commissioners of the county to which the rule applies.

N.C. Gen. Stat. § 130A-498(a)

The following are exempt from the ban on smoking, subject to conditions:

  • Designated guest rooms in lodging establishments
  • A cigar bar if smoke from the cigar bar does not migrate into an enclosed area where smoking is prohibited pursuant to this Article. A cigar bar that begins operation after July 1, 2009, may only allow smoking if it is located in a freestanding structure occupied solely by the cigar bar and smoke from the cigar bar does not migrate into an enclosed area where smoking is prohibited. A cigar bar must satisfactorily file an Application/Affidavit for Cigar Bar Exemption with the Department of Health on a quarterly basis, reporting the revenue generated from the sale of alcoholic beverages and cigars as a percentage of quarterly gross revenue.
    • To qualify as a cigar bar, an establishment must:
      • Generate 60% or more of its quarterly gross revenue from the sale of alcoholic beverages and 25% or more of its quarterly gross revenue from the sale of cigars;
      • Have a humidor on the premises
      • Not allow individuals under the age of 21 to enter
  • A private club

N.C. Gen. Stat. § 130A-496

Additionally, a local ordinance or other rules, law, or policy may not restrict or prohibit smoking in the following places:

  1. A private residence
  2. A private vehicle
  3. A tobacco shop (a business establishment the main purpose of which is the sale of tobacco, tobacco products, and accessories for such products that receives no less than 75% of its total annual revenues from the sale of tobacco, tobacco products, and accessories for such products, and does not serve food or alcohol on its premises) if smoke from the business does not migrate into an enclosed area where smoking is prohibited pursuant to this Article. A tobacco shop that begins operation after July 1, 2009, may only allow smoking if it is located in a freestanding structure occupied solely by the tobacco shop and smoke from the shop does not migrate into an enclosed area where smoking is prohibited.
  4.  All of the premises, facilities, and vehicles owned, operated, or leased by any tobacco products processor or manufacturer, or any tobacco leaf grower, processor, or dealer.
  5. Designated guest rooms in a lodging establishment.
  6. A cigar bar if smoke from the cigar bar does not migrate into an enclosed area where smoking is prohibited pursuant to this Article. A cigar bar that begins operation after July 1, 2009, may only allow smoking if it is located in a freestanding structure occupied solely by the cigar bar and smoke from the cigar bar does not migrate into an enclosed area where smoking is prohibited.
  7. A private club
  8. A motion picture, television, theater, or other live production sets. This exemption applies only to the actor or performer portraying the use of tobacco products during the production.

N.C. Gen. Stat. § 130A-498(b1)

Individuals under 18 years of age cannot purchase, accept receipt, or attempt to purchase or accept receipt, of tobacco products or cigarette wrapping papers, or present or offer to any person false or fraudulent proof of age for the purpose of purchasing or receiving tobacco products. However, it is not illegal for an employee to purchase or accept the receipt of tobacco products or cigarette wrapping papers when required in the performance of the employee’s duties.

Similarly, it is illegal to distribute, or aid, assist, or abet any other person in distributing tobacco products or cigarette wrapping papers to any person under the age of 18, or to purchase tobacco products or cigarette wrapping papers on behalf of a person under the age of 18, or to send a person under 18 years of age to purchase, acquire, receive, or attempt to purchase, acquire or receive tobacco products or cigarette wrapping papers. A person selling tobacco products must demand proof of age from a prospective purchaser if the person has reasonable grounds to believe that the purchaser is under 18 years of age. Again, it is not illegal to distribute tobacco products or cigarette wrapping papers to an employee when required in the performance of the employee’s duties.

Retail distributors of tobacco products must prominently display a sign with letters at least 5/8 of an inch high that states:

N.C. LAW STRICTLY PROHIBITS
THE PURCHASE OF TOBACCO PRODUCTS, TOBACCO-DERIVED PRODUCTS, VAPOR PRODUCTS, AND CIGARETTE WRAPPING PAPERS
BY PERSONS UNDER THE AGE OF 18.
PROOF OF AGE REQUIRED.

A person engaged in the distribution of tobacco products through the Internet or other remote sales methods must perform an age verification through an independent, third-party age verification service to establish that the individual ordering the tobacco products is 18 years of age or older.

N.C. Gen. Stat. § 14-313

To ensure uniformity, no political subdivisions, boards, or agencies of the State nor any county, city, municipality, municipal corporation, town, township, village, nor any department or agency thereof, may enact ordinances, rules or regulations concerning the sale, distribution, display or promotion of (i) tobacco products or cigarette wrapping papers on or after September 1, 1995, or (ii) tobacco-derived products or vapor products on or after August 1, 2013.

N.C. Gen. Stat. § 14-313(e)

In North Carolina, it is illegal for any person to furnish, give, or provide tobacco products, including tobacco product samples, to any person under the age of 18.

N.C. Gen. Stat. § 14-313

The excise tax levied on tobacco products other than cigarettes does not apply to a sample tobacco product distributed without charge.

N.C. Gen. Stat. § 105-113.35

No political subdivisions, boards or agencies of North Carolina or any county city, municipality, municipal corporation, town, township, village, or any department or agency thereof may enact ordinances, rules, or regulations concerning the sale, distribution, display, or promotion of tobacco products or cigarette wrapping papers or tobacco-derived products or vapor products.

N.C. Gen. Stat. § 14-313

Operating Your Business

North Carolina SB 523 (2019) states that a distributor shall obtain for each place of business a distributor’s license and shall pay a tax of $25 for the license. A license is in effect until June 30 of the year following the second calendar year after the date of issuance or renewal. A license for each place of business is renewable upon signed application with no renewal license tax unless applied for after the June 30 expiration date.

The entities listed in this subsection shall obtain for each place of business a tobacco products license and shall pay a license tax in the amounts listed. As used in this section, a “place of business” is a place where a wholesale dealer makes tobacco products other than cigarettes or where a wholesale dealer or a retail dealer receives or stores non-tax-paid tobacco products other than cigarettes. The entities and license tax amounts are as follows: 

entity typelicense tax amount
Wholesale Dealer$25
Retail Dealer$10

An applicant for a license must meet the following general requirements:

  • If the applicant is a corporation, the applicant must either be incorporated in North Carolina or be authorized to transact business in North Carolina.
  • If the applicant for a license is a limited liability company, the applicant must either be organized in North Carolina or be authorized to transact business in North Carolina.
  • If the applicant for a license is a limited partnership, the applicant must either be formed in North Carolina or be authorized to transact business in North Carolina.
  •  If the applicant for a license is an individual or a general partnership, the applicant must designate an agent for service of process and give the agent’s name and address.

N.C. Gen. Stat. § 105-113.4A

Every person engaged in business as a wholesale merchant or retailer in North Carolina must obtain a Certificate of Registration by filing a Business Registration Application for Income Tax Withholding, Sales and Use Tax, and Machinery and Equipment Tax (Form NC-BR).

A wholesale dealer must then obtain a continuing tobacco products license for each place of business by filing an Application for Cigarette Distributor’s License and Tobacco Products (Other Than Cigarettes) (Form B-A-2), along with the Appointment of Secretary of State for Service of Process (Form B-A-28), a Tax Bond for Tobacco Products Other Than Cigarettes (Form B-A-29) with a bond amount of $2,500, and an application fee of $25. A retail dealer must also obtain a continuing tobacco products license for each place of business by filing Form B-A-2, along with Form B-A-28, Form B-A-29 with a bond amount of $2,500, and an application fee of $10. These licenses do not require renewal.

N.C. Gen. Stat. § 105-113.36

Wholesale and retail dealers liable for the excise tax on tobacco products other than cigarettes must file the Monthly Other Tobacco Products Excise Tax Return (Form B-A-101) and the Tobacco Report Tax-Paid Products of Nonparticipating Manufacturers (Form B-A-7) within 20 days after the end of each month, even if no tax is due.

N.C. Gen. Stat. § 105-113.37

Cigar bars are exempt from the ban on smoking if smoke from the cigar bar does not migrate into an enclosed area where smoking is prohibited. A cigar bar that begins operation after July 1, 2009, may only allow smoking if it is located in a freestanding structure occupied solely by the cigar bar and smoke from the cigar bar does not migrate into an enclosed area where smoking is prohibited. A cigar bar must satisfactorily file an Application/Affidavit for Cigar Bar Exemption with the Department of Health on a quarterly basis, reporting the revenue generated from the sale of alcoholic beverages and cigars as a percentage of quarterly gross revenue. To qualify as a cigar bar, an establishment must:

  • Generate 60% or more of its quarterly gross revenue from the sale of alcoholic beverages and 25% or more of its quarterly gross revenue from the sale of cigars;
  • Have a humidor on the premises
  • Not allow individuals under the age of 21 to enter

N.C. Gen. Stat. § 130A-496

Localities may require additional business licenses.

Form Type / NameForm Number / Link
eBuiness Taxpayer CentereBuiness Taxpayer Center
Tobacco Products Tax Forms and InstructionsTax Forms and Instructions
Application/Affidavit for Registration of Exempt Cigar BarCigar Bar Application/Affidavit

Political Involvement

A “lobbyist” is an individual who engages in lobbying for payment and meets any of the following criteria:

  •  Represents another person or governmental unit, but is not directly employed by that person or governmental unit.
  • Contracts for payment for lobbying.
  • Is employed by a person and a significant part of that employee’s duties include lobbying. In no case shall an employee be considered a lobbyist if in no 30-day period less than 5% of that employee’s actual duties include engaging in lobbying.

N.C. Gen. Stat. § 163A-250: Definitions 

“Lobby” or “lobbying” means any of the following:

  • Influencing or attempting to influence legislative or executive action, or both, through direct communication or activities with a designated individual or that designated individual’s immediate family.
  • Developing goodwill through communications or activities, including the building of relationships, with a designated individual or that designated individual’s immediate family with the intention of influencing current or future legislative or executive action, or both.

The terms “lobby” or “lobbying” do not include communications or activities as part of a business, civic, religious, fraternal, personal, or commercial relationship that is not connected to legislative or executive action, or both.

N.C. Gen. Stat. § 163A-250: Definitions 

A “lobbyist principal” or “principal” is the person or governmental unit on whose behalf the lobbyist lobbies and who makes payment for the lobbying. In the case where a lobbyist is paid by a law firm, consulting firm, or other entity retained by a person or governmental unit for lobbying, the principal is the person or governmental unit whose interests the lobbyist represents in lobbying. In the case of a lobbyist employed or retained by an association or other organization, the lobbyist principal is the association or other organization, not the individual members of the association or other organization.

N.C. Gen. Stat. § 163A-250: Definitions 

“Reportable expenditure” includes any of the following that directly or indirectly is made to, at the request of, for the benefit of, or on behalf of a designated individual or that individual’s immediate family member:

  • Any advance, contribution, conveyance, deposit, distribution, payment, gift, retainer, fee, salary, honorarium, reimbursement, loan, pledge, or thing of value greater than $10 per designated individual per single calendar day.
  • A contract, agreement, promise, or other obligation whether or not legally enforceable.

N.C. Gen. Stat. § 163A-250: Definitions 

North Carolina law requires a lobbyist to file a separate registration statement for each principal the lobbyist represents with the Secretary of State before engaging in any lobbying. Lobbyists and principals must E-file their registration by using the Lobbying Compliance Division portal on the North Carolina Department of the Secretary of State website. Registration expires on December 31steach year and must be renewed annually. The registration fee for lobbyists and principals is $250 (plus a $2 electronic fee). Lobbyist principals must also file a signed written authorization allowing the lobbyist to represent the principal within 20 business days after the lobbyist’s registration.

Lobbyists and principals must file two types of reports: 

  • A monthly report, due within 10 business days after the end of the calendar month, when:
    • The General Assembly is in session during the month
    • The lobbyist or principal spent money on or gave something of value to:
      • A legislator
      • The legislator’s immediate family member, or
      • A legislative staff member
  • A quarterly report, due within 15 business days after the end of each quarter, for every quarter or portion of a quarter the lobbyist or principal is registered.

N.C. Gen. Stat. ch. 120C

Form Type / NameForm Number / Link
North Carolina Department of the Secretary of State: Register OnlineOnline Registration

Shipping Regulations

Any person who transports other tobacco products upon the public highways, roads, or streets of North Carolina must file a report in a form prescribed by and containing the information required by the Secretary of State.

N.C. Gen Stat. § 105-113.37(d): Shipping report

North Carolina SB 523 (2019) states that delivery seller who has made a delivery sale, or shipped or delivered tobacco products in connection with a delivery sale, during the previous month shall, not later than the tenth day of each month, file with the Secretary a memorandum or a copy of the invoice for every delivery sale made during the previous month. A delivery seller who complies with 15 U.S.C. § 376 with respect to tobacco products covered by that section is considered to have complied with this subsection. The memorandum or invoice shall contain the following information: 

  1. Name, address, telephone number, and e-mail address of the consumer.
  2. Type and the brand, or brands, of tobacco products that were sold.
  3. Number of tobacco products that were sold.

The measure also provides that it is unlawful for a person to maintain a place of business within this state required by this measure to be licensed to engage in the business of selling, offering for sale or possessing with the intent to sell cigarettes or other tobacco products without first obtaining the licenses.

North Carolina does not have a specific license required for the shipment of tobacco products. However, a wholesale dealer must obtain for each place of business a continuing tobacco products license and pay a tax of $25 for license. A retail dealer must obtain for each place a business a continuing tobacco products license and pay a $10 tax for the license. 

N.C. Gen. Stat. § 105-113.36: Wholesale dealer and the retail dealer must obtain license

Additional information about licensing in North Carolina is available at the Operating Your Business and Definitions link above.

A person engaged in the distribution of tobacco products through the Internet or other remote sales methods shall perform an age verification through an independent, third-party verification service that compares information available from public records to the personal information entered by the individual during the ordering process to establish that the individual ordering the tobacco is 18 years of age or older.

N.C. Gen. Stat. § 14-313(b2): Internet distribution of tobacco products

North Carolina imposes an excise tax on tobacco products other than cigarettes on the wholesale dealer or retail dealer who first acquires or otherwise handles tobacco products subject to the tax. A wholesale dealer or retail dealer who brings a tobacco product into North Carolina or is the original consignee of a tobacco product that is made elsewhere and shipped into North Carolina is considered the first person to handle the tobacco product. A retail dealer who acquires non-tax-paid tobacco products subject to the tax from a wholesale dealer is liable for any tax due on the products. A manufacturer who is not a retail dealer and who ships tobacco products to either a wholesale dealer or retail dealer may apply to the Secretary of Revenue to be relieved of paying the tax.

N.C. Gen. Stat. § 105-113.35

North Carolina SB 56 (2019) specifies that any licensed distributor engaged in interstate business shall be permitted to set aside part of  the stock as necessary to conduct interstate business without paying the tax otherwise required by this Part, but only if the licensed distributor complies with the requirements prescribed by the Secretary concerning keeping of records, making of reports, posting of bond, and other matters for administration of this Part.

“Interstate business” is defined in this section as: 

  1. The sale of cigarettes to a nonresident where the cigarettes are delivered by the licensed distributor to the business location of the nonresident purchaser in another state; and
  2. The sale of cigarettes to a nonresident purchaser who has no place of business in North Carolina and who purchases the cigarettes for the purposes of resale not within this State and where the cigarettes are delivered to the purchaser at the business location in North Carolina of the licensed distributor who is also licensed as a distributor under the laws of the state of the non-resident purchaser.

Disclaimer: PCA believes the information on this site is accurate. However, tobacco laws and regulations are subject to frequent change and court interpretation. Statements above are not intended as legal advice or restatement of law. PCA does not guarantee or assume responsibility for the accuracy, completeness or timeliness of this information, nor that this information complies with all federal laws or the laws of all 50 states. Parties acknowledge and agree it is not the intention of PCA to provide specific legal advice for particular individuals, but rather to provide users with general information to better understand these issues. Users shall neither construe any of these materials as legal advice nor make this site the primary basis for any legal decisions made by or on your behalf and agree to release and waive any claims against PCA for the same. You shall consult with legal advisors concerning any contemplated individual decision.