Cigarette & Tobacco Excise Tax Frequently Asked Questions

Here you will find answers to frequently asked questions regarding Cigarette and Tobacco Excise tax administered by the Massachusetts Department of Revenue (DOR).

Table of Contents

Application & renewal for a license or an appointment

Where may I obtain an application for a license?

You will need to create an online account using MassTaxConnect (MTC). You can apply for the following license:

  • Cigarette
  • Cigar and smoking tobacco.
     

What form should I use when applying for a retailer license?

There are no longer paper forms for retailer licenses. Using MassTaxConnect you will need to:

  • Add a cigarette or cigar tax account and
  • Select the retailer option.


What form should an applicant for appointment as a cigarette stamper use?

For quicker review such an applicant can submit an electronic application through MassTax Connect. You can also use the Form CTL.


Where should I mail my completed application form?

Applicants that choose to mail the Form CTL and payment or need to submit additional documents should submit to:

Miscellaneous Excise Unit
Attn: Tobacco Unit
PO Box 7004
Boston, MA 02204

 

Must I also register to collect the sales tax? If so, what form do I need to register for sales tax

Applicants must register their business on line using MassTaxConnect.
 

When may I engage in the business permitted by the license or appointment?

You may start business once the license, or letter of appointment if you are a stamper, has been issued.
 

Must I have a tobacco sales permit issued by the city or town in which I do business?

Most cities and towns in Massachusetts require that cigarette retailers have local tobacco sales permits. You should check with the Board of Health of the city or town in which you do business.
 

If I am a current licensee, will renewal applications automatically be mailed to me?

If you licensed using MassTaxConnect the Department will automatically mail renewal applications to all current licensees. However, a licensee must be certain to inform DOR of any changes in its mailing address.


How often must I renew my license or appointment?

Most cigarette licenses must be renewed by June 30 of each year. However, retailer licenses are valid for two years. They expire on September 30 of each year ending in an even digit (e.g., 2012 and 2014).

Appointments of stampers expire annually on June 30.

The reason for DOR denying the initial application for a license or appointment may also be used to deny an application for renewal.

License requirements

What are the requirements for a Wholesaler's License?

An applicant applying for a wholesaler's license must furnish affidavits from 3 separate Massachusetts licensed cigarette manufacturers. The affidavits must state that, if the Commissioner grants the license, the manufacturer will sell cigarettes to the wholesaler. If one or more of the manufacturers ceases

  • To do business as a manufacturer,
  • To be licensed as a manufacturer, or
  • To supply cigarettes to the wholesaler,

the licensee must, within 60 days, provide substitute affidavit(s) from other manufacturer(s).

Failure to do so will result in the suspension or revocation of the wholesaler license. A wholesaler must meet the definition in M.G.L. c. 64C, § 1.
 

What are the requirements for a Stamper?

A stamper is authorized by the Commissioner. A stamper must be licensed as a:

  • Wholesaler
  • Vending machine operator
  • Unclassified acquirer or
  • Manufacturer.

Once authorized, the stamper must pay for stamps by way of electronic funds transfer. If requesting credit, the stamper must file a surety bond which guarantees payment of all amounts due for cigarette excise stamps purchased on credit from DOR.
 

What type of investigation will the Department conduct?

The investigation may include:

  • A review of any prior audit activity concerning the applicant and
  • Any prior tax delinquency or enforcement actions relating to the applicant or its principals, including any history of license suspensions or revocations.

DOR may also do a site visit to the applicant's business premises. As appropriate,  DOR's investigation may include inquiries to federal, state and local law enforcement officials concerning the existence of:

  • Criminal complaints,
  • Proceedings or
  • Convictions against the applicant or its principals or employees.
     

How will I be notified whether the license or appointment has been approved?

DOR will notify the applicant in writing of its decision whether to grant or deny the application. Once an applicant is approved, the license or appointment will be mailed to the applicant at the business address shown on the application.
 

Why may the Department refuse to grant an application?

DOR may deny the license application of any applicant that has been convicted of violating:

  • M.G.L. c. 64C or
  • Any other pertinent law.

Other grounds on which DOR may rely to deny the grant of a license are listed in section 67 of M.G.L. c. 62C.

DOR may also apply section 67 of M.G.L. c. 62C in reviewing an application for appointment as a stamper.

Suspension or revocation of a license or appointment

What must I do to maintain my license or appointment?

Each cigarette licensee and cigarette stamper must follow all the requirements imposed upon licensees and stampers under all applicable Massachusetts statutes and regulations, including M.G.L.:

  • C. 62C
  • C. 64C and
  • C. 94E.

These duties include, but are not limited to:

  • Keeping of complete and accurate records
  • Timely filing of all required returns and informational schedules and

Payment of the cigarette excise and the sales tax, as applicable.
 

On what grounds may the Department suspend or revoke a license?

DOR's authority to suspend or revoke a license and the grounds on which a suspension or revocation may be based are found in:

  • M.G.L. c. 62C, § 47A and
  • M.G.L. c. 62C, § 68.
     

Who has the authority to revoke appointments of cigarette stampers?

DOR has the authority to suspend or revoke the appointments of cigarette stampers pursuant to:

  • M.G.L. c. 62C, § 68 and
  • M.G.L. c. 64C, § 30.

The appointment as a cigarette stamper will not be unreasonably withheld. Once granted, a cigarette stamper will not be revoked, suspended or denied renewal unreasonably, as long as the appointed stamper complies with all requirements under M.G.L.:

  • C. 62C,
  • C. 64C and
  • C. 94E.

Appeal rights

What are my appeal rights if my license application is denied or my license is revoked?

An applicant whose initial or renewal application for a license has been denied may appeal the denial to the Appellate Tax Board within 60 days of the date of notice of denial.

A licensee whose license has been suspended or revoked has the right to appeal to the Appellate Tax Board within 10 days after:

  • Written notice of the suspension or

Revocation has been mailed to the licensee.
 

What is the address and telephone number of the Appellate Tax Board?

The address and telephone number of the Appellate Tax Board are as follows:

Clerk
Appellate Tax Board
100 Cambridge Street, Suite 200
Boston, MA 02114
(617) 727-3100.

Stamps & payments

How do I order cigarette stamps?

Stamps are ordered through the stamp vendor SICPA using https://maexcisestamp.dor.state.ma.us
 

What are the billing requirements?

Cigarette stampers have 30 days to pay for the stamps, if the stamper has posted a bond in the amount of credit desired.  If the stamper fails to pay, DOR will mail a Notice of Assessment (NOA).  The NOA will be for the gross amount due, i.e., compensation to the stamper will be disallowed.  The NOA will be sent to the stamper before any attempt is made to collect on the bond.  No stamper can buy stamps until all outstanding bills are paid.
 

How do I pay the Department for the stamps?

All cigarette stampers appointment by the Commissioner to purchase and affix cigarette excise stamps, pursuant to M.G.L. c. 64C SS 30, shall pay for these stamps via electronic transfer of funds for any stamps purchased on or after September 1, 2003. Payments can be made on MassTaxConnect. Stampers shall continue to file returns electronically on MassTaxConnect.
 

How am I compensated for affixing cigarette Stamps?

  • For encrypted stamps purchased and not returned for abatement, $12 per roll of 1,200 stamps
  • In each fiscal year, $600 per roll or 30,000 encrypted stamps for the first 50 rolls purchased and
  • $200 per each additional roll of 30,000 encrypted stamps purchased.

Compensation may be disallowed, for example, if a:

  • Check is dishonored or
  • Payment is late.

Compensation is deducted from the stamper’s amount due.
 

What is the rate of tax?

As of July 31, 2013, the rate is .1755 cents per cigarette ($3.51 per pack of 20 and $4.3875 per pack of 25).
 

Is there any tax exemption?

Sales of cigarettes to the federal government and the military and cigarettes shipped out of Massachusetts are:

  • Exempt from tax and
  • Don’t need to be stamped.

Returns & refunds

What are the penalties if I do not file my returns on time?

If returns aren’t properly filed, interest and penalties may be assessed. As of January 1, 1993, the Massachusetts interest rate is based on:

  • The federal short-term rate plus
  • 4 percentage points, compounded daily.

The penalty for late filing is 1%/month or fraction thereof, not to exceed 25% of the amount due.

The penalty for late payment is .5%/month for each month or fraction thereof, not to exceed 25% of the amount due.
 

Can you request an extension for filing a return?

The Commissioner may grant a reasonable extension of time for filing a return for good cause. Requests must be in writing. Failure to pay 80% of the tax required to be paid on or before the due date for payment of tax will:

  • Void any extension of time to file and

The return will be subject to penalty as a late return.
 

Is there a different form for an amended return?

No special form is required to amend a return. Log in to MassTaxConnect. You can select the tax account and period you would like to amend.
 

Do you get a refund for any unsold stamps on cigarettes?

The tax paid for unsold or misapplied stamps may be refunded.  Submit Massachusetts Form ABT–Application and misapplied stamps must be returned to:

Cigarette and Tobacco Unit
200 Arlington Street
Chelsea, MA  02150. 

If returning whole rolls of stamps, please fill out the Encrypted Cigarette Excise Stamp Roll Return Request Form and email the form to maexcisestamp @dor.state.ma.us. 

Instructions of returning the rolls can be found on the Roll Return Request form.  Cigarettes that have a stamp affixed to them must be returned to the Cigarette Manufacturer and must execute an affidavit stating that they have been returned.  Attach the affidavit to Form ABT.

Tobacco Product Manufacturers (TPM) Directory & non-participating manufacturers

What is the Tobacco Product Manufacturer (TPM) Directory?

Chapter 90 of the Acts of 2004, which adds a new Chapter 94F to the M.G.L., is now in effect. Under Chapter 94F, as of August 4, 2004, a cigarette brand cannot be:

  • Sold or offered for sale in Massachusetts, or
  • Stamped for sale in Massachusetts,

unless the manufacturer and the brand family are listed in the Tobacco Product Manufacturer (TPM) Directory published by DOR. This restriction also applies to roll-your-own tobacco.
 

Where can I find the TPM Directory?

The TPM Directory can be found here.

Manufacturers and brands may be added to or deleted from the Directory from time to time. Checking the Directory for any updates is the responsibility of all:

  • Wholesalers
  • Stampers and
  • Retailers.

The date of the recent update is indicated in the TPM Directory.
 

What are the penalties for selling, offering to sell, or stamping cigarettes for sale In Massachusetts that are not on the TPM Directory?

Violations of M.G.L. c. 94F are subject to civil and criminal penalties. Stampers also may have their stamping authority suspended or revoked. Non-compliant cigarettes are contraband and subject to seizure and forfeiture.
 

What if I have a question about the TPM Directory?

Questions regarding manufacturers and brands listed, or not listed, on the TPM Directory should be directed to the Massachusetts Attorney General's Office (AG) at (617) 727-2200, ext. 2968.
 

Who is a Non-Participating Manufacturer?

A non-participating manufacturer (NPM) is a cigarette manufacturer that is not a party to the Tobacco Master Settlement Agreement.
 

What does the Department require if a Stamper stamps cigarettes manufactured by NPMs?

A stamper may not stamp cigarettes manufactured by NPMs unless the manufacturer and brand family are identified in the TPM Directory. If a cigarette brand is not listed in the TPM Directory, it may not be:

  • Stamped for sale or
  • Sold in Massachusetts.

Additionally, all stampers are required to file a Schedule CT-NPM (Stamper's Reporting Schedule on Sales By Non-Participating Manufacturers) within 20 days of the close of each reporting month. The Schedule must be filled out and filed with DOR even if:

  • A stamper didn’t stamp any cigarettes for an NPM, or 
  • The number required in any column is "0."

Minimum pricing

Does Massachusetts regulate the price of cigarettes?

Yes. The Department calculates a presumptive retail minimum cost and presumptive wholesale minimum cost of cigarettes pursuant to M.G.L. c. 64C, §§ 12 to 21.
 

May I sell cigarettes below the presumptive minimum price?

No. Unless an exemption applies, a retailer or wholesaler must have the prior written approval of the Commissioner to sell cigarettes below the presumptive minimum price. This approval may be obtained only pursuant to 830 C.M.R. 64C.14.1.
 

Where may I obtain the list of presumptive minimum retail prices?

This list can be found under the section "Minimum Retail Price List" on this web site.
 

Where may I obtain the list of presumptive minimum wholesale prices?

This list may be obtained by calling the Cigarette Tax Unit at (617) 887-5090.
 

Is any written guidance available?

Yes. In addition to M.G.L. c. 64C and 830 C.M.R. 64C.14.1, Directive 92-4 and Directive 02-2 also address minimum pricing issues. 

Smoking bar permits

What is a smoking bar?

A smoking bar is defined in M.G.L. c. 270, § 22 as an establishment that exclusively:

  • Occupies an enclosed indoor space and is primarily engaged in the retail sale of tobacco products for consumption by customers on the premises
  • Derives revenue from the sale of food, alcohol or other beverages that is incidental to the sale of the tobacco products
  • Prohibits entry to a person under eighteen years of age during the time when the establishment is open for business
  • Prohibits any food or beverage not sold directly by the business to be consumed on the premises and
  • Maintains a valid license or permit for the retail sale of tobacco products as required to be issued by the appropriate authority in the city or town where the smoking bar is located.
     

What is a smoking bar permit?

Any person or entity wishing to be certified under M.G.L. c. 270, § 22A as a smoking bar must be issued a permit by the Commissioner to operate a smoking bar. The permit is valid for a period of two years from the date of issuance.
 

How may I obtain a smoking bar permit?

Permit applications are available from the Miscellaneous Excise Unit. The telephone number is 617-887-5090 and the fax number 617-660-0162. The permits may also be downloaded from this web site.
 

Are there any additional reporting requirements in order to keep my smoking bar permit effective?

Yes. Every smoking bar must file a quarterly declaration with the Commissioner no later than 20 days following the end of the preceding quarter. The quarterly declaration shall demonstrate that the revenues generated from the sale of tobacco products is equal to or greater than 51% of the total combined revenues generated by the sale of:

  • Tobacco products
  • Food and beverages.

The declaration must be signed by the owner under the pains and penalties of perjury.
 

If I have a permit to operate smoking bar issued by the city in which my smoking bar is located, do I also need a permit from the Department?

Yes. A permit from a city or town is not a substitute for a permit from the Department.

Additional questions

What should I do if I have additional questions or need further information?

You should call DOR's Miscellaneous Excises Unit at (617) 887-5090.

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