Several states are implementing new nicotine regulations effective July 1, 2026. While the requirements vary, many focus on the same operational areas: licensing, product sourcing, excise taxes, product eligibility, age verification, shipping controls, and recordkeeping.

For businesses selling nicotine products across multiple states, the challenge is understanding how these changes affect existing compliance processes. This checklist highlights the key requirements taking effect in South Dakota, Utah, Alaska, Wisconsin, California, and Oregon, along with practical steps to help businesses prepare before July 1.

At a Glance: What Changes on July 1?

Several states are implementing changes that affect different parts of the nicotine supply chain.

Compliance Area	States Affected
Licensing and supplier requirements	South Dakota, California
Excise taxes and inventory obligations	Utah, Alaska, Oregon
Product directory compliance	Wisconsin
Age verification and direct-to-consumer shipping	South Dakota

While no single business will face every change, companies that sell across multiple states should identify the requirements that apply to their operations and update their compliance processes before July 1.

1. Review Your Licensing, Supplier, and Registration Requirements

Licensing requirements continue to expand beyond simply obtaining a permit to sell nicotine products. Increasingly, states are regulating who businesses can buy from, who may distribute products, and how those relationships are documented.

South Dakota strengthens supplier and distributor requirements

Beginning July 1, South Dakota requires retailers to purchase nicotine products from licensed distributors or wholesalers. Retailers must also maintain documentation demonstrating where products originated and be prepared to produce those records during inspections.

Distributors and businesses selling directly to consumers also face new licensing requirements under the state’s updated regulatory framework.

These changes reinforce a broader compliance trend: regulators are paying closer attention to the nicotine supply chain—not just the point of sale.

California increases retailer licensing costs

California is increasing fees under its Tobacco Retailer Licensing Program effective July 1.

Although the fee increase does not introduce new compliance obligations, it serves as a reminder that licensing programs require ongoing administrative attention. Businesses should confirm license renewal dates, budget for increased fees, and ensure all locations remain properly licensed.

Questions to ask before July 1

• Are all required licenses active and current?
• Are your suppliers properly licensed where required?
• Can you document where every nicotine product originated?
• Are purchasing records organized and readily available during an inspection?

2. Update Your Excise Tax Calculations

Several states are changing how nicotine products are taxed, but the updates vary significantly depending on product type.

For businesses operating in multiple jurisdictions, assuming tax rates remain unchanged can lead to pricing errors, reporting issues, and unexpected liabilities.

Utah raises multiple nicotine tax rates

Utah is increasing tax rates on cigarettes, electronic cigarette products, alternative nicotine products, and nontherapeutic nicotine products effective July 1.

Businesses with taxable inventory on hand as of July 1 may also face additional inventory tax obligations, with reporting and payment deadlines following later in July.

Companies should review:

• Product classifications
• Tax calculations
• Inventory reporting procedures
• Retail pricing

Alaska establishes its first statewide vape tax framework

Alaska has enacted its first statewide tax structure covering synthetic nicotine products and nicotine substitutes.

Beginning July 1, synthetic nicotine products become subject to a wholesale tax, while electronic smoking devices will transition to a retail sales tax beginning in 2027.

Businesses selling into Alaska should verify that products are correctly classified and that accounting systems reflect the new tax treatment.

Oregon increases moist snuff tax rates

Oregon is increasing both its moist snuff tax rate and minimum tax per retail container.

Although the change applies to a narrower category of products, affected businesses should review pricing strategies, inventory valuation, and tax calculations before the new rates become effective.

Questions to ask before July 1

• Have all applicable state tax rates been updated?
• Do product classifications remain accurate?
• Have pricing models been adjusted?
• Are inventory reporting requirements understood?
• Can your tax calculations support audits if requested?

3. Confirm That Every Product You Sell Is Eligible for Sale

Compliance isn’t limited to taxes and licensing.

Increasingly, states are requiring certain nicotine products to appear on approved product directories before they may legally be sold.

Wisconsin expands Electronic Vaping Device Directory requirements

Beginning July 1, additional vaping products become subject to Wisconsin’s Electronic Vaping Device Directory requirements.

Products that do not appear on the state’s directory may not legally be sold in Wisconsin.

For manufacturers, distributors, retailers, and ecommerce businesses, this means compliance extends beyond inventory management. Businesses should also verify that products remain eligible for sale in each state where they operate.

Practical steps include:

• Reviewing product catalogs
• Confirming directory status with suppliers
• Monitoring directory updates
• Removing ineligible products before they are offered for sale

Selling a product that is no longer eligible can create compliance risks even if every other aspect of the transaction is handled correctly.

4. Review Your Online Sales and Age Verification Process

Direct-to-consumer nicotine sales continue to receive increased regulatory attention.

South Dakota’s July 1 requirements demonstrate that compliance no longer ends once a customer completes checkout.

Businesses selling nicotine products online should review their entire fulfillment workflow, including:

• Age verification during purchase
• Adult signature requirements upon delivery
• Shipping procedures
• Sales records
• Documentation supporting compliance

States increasingly expect businesses to prove they sold age-restricted products lawfully and delivered them to eligible consumers through compliant shipping practices.

For companies selling across multiple states, regularly auditing age verification workflows and maintaining clear records can help reduce compliance risk and simplify responses to regulatory inquiries.

July 1 Compliance Checklist

Before July 1, nicotine businesses should review the following:

• Verify all required licenses are active and current.
• Confirm suppliers meet state licensing requirements.
• Update excise tax rates and pricing where necessary.
• Review inventory reporting obligations.
• Verify product directory status for affected states.
• Audit online age verification and adult signature workflows.
• Review shipping procedures and recordkeeping practices.
• Document internal compliance updates and employee training.

Compliance Is Bigger Than Any Single Regulation

The upcoming changes show that businesses must take a more connected approach to compliance. Licensing, taxes, product eligibility, age verification, shipping, and recordkeeping increasingly work together, and a gap in one area can create risk in another.

Rather than responding to each new law as it takes effect, businesses should use these updates as an opportunity to review their compliance program as a whole. A proactive review today can help prevent costly issues tomorrow.

If your business is affected by July 1 excise tax changes, estimate your updated tax obligations with our free Excise Tax Calculator. If you’re reviewing broader compliance processes—including age verification, identity verification, or regulatory workflows—learn how Token of Trust helps businesses prepare for evolving state requirements.

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