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    Tobacco Products Taxes

    Requirements for Tobacco Products and Licensing (Act 57 of 2025)

    Act 57 of 2025, legislation that was signed into law in Pennsylvania, makes changes that pertain to tobacco products and licensing. The legislation adds provisions to the Commonwealth’s Fiscal Code that supplement and amend certain provisions of Article XII-A of the Tax Reform Code of 1971.

    Purchase of Tobacco Products (effective Feb. 20, 2026)

    1. A retailer licensed under Article XII-A of the Tax Reform Code of 1971 may only purchase tobacco products from a licensed wholesaler. 

    2. All other tobacco products found at a retail location that have not been purchased from a PA licensed wholesaler are subject to seizure.

    Licensing of Dealers and Manufacturers (effective Feb. 20, 2026)

    1. Manufacturers of tobacco products must obtain a tobacco (OTP) manufacturer license under section 1221-A of the Tax Reform Code.

    2. In addition to the manufacturer license, the manufacturer of tobacco products must also maintain a tobacco (OTP) wholesaler license to sell to licensed retailers.

    3. Manufacturers with more than one location in PA shall obtain a license for each location. 

    Electronic Nicotine Delivery System (ENDS) Directory

    1. Requires every manufacturer of electronic cigarettes that contain nicotine and are sold for retail in the Commonwealth of Pennsylvania to be certified by the Attorney General.

    2. The Attorney General shall maintain and make publicly available a directory that lists all manufacturers of electronic cigarettes that contain nicotine, brand names, categories (such as e-liquid, E-liquid cartridge, e-liquid pod, or disposable), product names, and flavors for which certification forms have been submitted and approved by the Attorney General. The directory shall be updated at least monthly to ensure accuracy.

    3. For more information, see Tobacco Enforcement on the Office of Attorney General website. 

    Minimum Pricing Increase to “Cost of the Retailer”

    Act 57 of 2025 amends the Fiscal Code and portions of the Cigarette Sales and Licensing provisions, 72 P.S. § 202-A, et seq., by establishing new rates for a cigarette retailer’s presumed cost of doing business:

    1. Under current law, 72 P.S. § 202-A, the “Cost of the Retailer” is their basic cost of cigarettes plus the cost of doing business above the basic cost of cigarettes. Such cost of doing business is expressed as a percentage and applied to the basic cost of cigarettes. It is presumed and set by statute, and Act 57 of 2025 amends that presumption.

    2. Beginning March 1, 2026, a retailer’s presumed cost of doing business rises from 7% to 8.5%. A year later, on March 1, 2027, the presumed cost will rise again to 9.5%. 72 P.S. § 234-A

    3. As before, this presumption may be rebutted with specific evidence of a cost of doing business below the governing rate. If established, the amended rate will be effective for 12 months, after which it will revert to the presumption unless renewed. 72 P.S. § 202-A.

    4. Under Act 57 of 2025, anyone who purchases cigarettes for sale at retail directly from a manufacturer shall be deemed engaged in the sale of cigarettes as a stamping agent, wholesaler, and retailer subject to all mark-up provisions of the Cigarettes Sales and Licensing provisions.