What is the PACT Act: Vapor Products Added to PACT Requirements

Review the basics of the PACT Act: what it does and who needs to comply. Understand differences in state PACT reporting requirements, the penalties for non-compliance and find additional resources for filers.

Let’s get started!

What is the PACT Act?

The Prevent All Cigarette Trafficking (PACT) Act:

• regulates the mailing of cigarettes and smokeless tobacco products to consumers through the U.S. Postal Service
• adds new requirements for registration, reporting, delivery, and recordkeeping, including a List of Unregistered or Non-Compliant Delivery Sellers
• increases penalties to a felony up to 3 years imprisonment
• gives ATF inspection authority to examine any records required to be maintained and any cigarettes or smokeless tobacco kept on the premises

The Prevent All Cigarette Trafficking Act (PACT) Act law went into effect on June 29, 2010.

Who has to comply with the PACT act?

Under the PACT Act “any person who sells, transfers, or ships for profit of cigarettes or smokeless tobacco in interstate commerce” must register with ATF and comply with the PACT Act guidelines.

The federal government has now included ENDS (vapor products, e-cigarettes, even components sold separate from the solution, etc.) to be included on the federal PACT Act forms. This requirement went into effect on March 27, 2021.

Companies shipping or selling ENDS into states are now required to submit information about their sales of ENDS and comply with those states’ laws on licensing, filing, and reporting.

How to register for PACT reporting

This is the easiest way to register with the federal authorities and make sure you include all the proper information. Note: This is just for PACT reporting with the federal authorities. To comply with taxation requirements, you’ll need to register separately with state and local tax administrators.

1. Download the PACT Act Registration Form here.
2. Submit the registration. You can do so via email or via mail. The details on where to send registration form can be found in the ATF PACT Act Information Guide.

PACT report submission guidelines

PACT reporting requirements change by state. Each state has different report forms and different ways to submit those reports.

To submit your PACT reports to the state, you usually have to:

• Email the report to a specific contact at the state
• Mail the report to a physical address
• E-file (electronically file) the report in the approved format (example: XML)

You may also have to submit the PACT report separately to the State Attorney General.

Note: PACT reporting is not the same as submitting state tax returns. You will have to contact each state for licensing and tax reporting requirements outside of the PACT reports.

Download our state-by-state table that outlines how you should be submitting your PACT reports and where you should be submitting them.

You’ll find a complete list of each state’s information, including:

• Revenue/Taxation Agency by State
• Attorney General by State
• Reporting Method
• Email
• Physical Mailing Address
• E-File Website
• Phone Number

Quick note: Why isn’t this info always available on the state website? They’ve been caught off-guard by the regulations too. So we’ve used our connections to the states through our subject matter experts to track down the information for you.

Penalties for not reporting PACT

Under the PACT Act, anyone found to be in non-compliance could face civil and criminal penalties. Civil penalties include fines to be the greater of $5,000 or 2% of the gross sales during the 1-year period ending on the date of the violation. That $5,000 is just for the first violation. After that, it’s $10,000 for any other violation.

Criminal penalties could be up to 3 years in prison.

On top of all that, you can be included on the Federal PACT Non-Compliant list which can lead to product seizure.

Filing and reporting resources

• PACT Act Registration Form
• ATF PACT Act Information Guide
• What is Excise Tax?

This analysis is intended for informational purposes only and is not tax advice.  For tax advice, consult your tax adviser. See the full disclaimer here.