Does the PACT Act Apply to Your Vape Business?
The Hidden Risk in Vape Shipping
Many vape businesses believe the PACT Act only applies to retailers shipping directly to consumers. But that assumption could put your operation at risk. If you ship ENDS (Electronic Nicotine Delivery Systems) products across state lines, even to other businesses, you may have reporting obligations under federal law.
Understanding the PACT Act is crucial for anyone in the vape supply chain. This guide walks through who needs to report, what information must be filed, and how to stay compliant as enforcement tightens nationwide.
What Is the PACT Act, and Why Was It Expanded?
The Prevent All Cigarette Trafficking (PACT) Act was originally passed in 2009 to combat illegal cigarette sales and tax evasion. The law created strict rules for shipping cigarettes and smokeless tobacco products across state lines.
In 2021, Congress expanded the PACT Act as part of the Preventing Online Sales of E-Cigarettes to Children Act. This amendment brought all ENDS products under the PACT Act umbrella. That includes:
- Nicotine-containing vapes and e-liquids
- Synthetic nicotine products
- Zero-nicotine or CBD-based vaporizers
- Components and accessories (batteries, tanks, coils, etc.)
Importantly, the law focuses on the shipment and sale of these products across state lines. This means the PACT Act now affects many businesses that weren’t subject to federal regulation before 2021.
The law is enforced by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) in coordination with state and local tax authorities. Enforcement has grown more aggressive in recent years, with increased focus on vape manufacturers, distributors, and online sellers.
Who Needs to Report (It’s Based on Activity, Not Just Role)
A common misconception is that PACT Act compliance only applies to retailers selling directly to consumers. In reality, the obligation to register and report applies based on your activity — not just your role in the supply chain.
If you ship vape products across state lines for profit, you may be required to:
- Register with the ATF
- Register with each state you ship into
- Submit monthly reports detailing shipments to those states
This includes:
- Direct-to-consumer retailers
- Business-to-business wholesalers
- Distributors and resellers
- White-label manufacturers fulfilling drop-shipped orders
- Any business shipping ENDS to licensed stores, vape shops, or other intermediaries
✅ Quick Self-Assessment:
Ask yourself:
- Do you ship ENDS products across state lines?
- Are you the final shipper in the chain, or involved in fulfillment?
- Do you know if your recipients are properly licensed?
- Have you registered with the ATF and each destination state?
If you’re unsure about any of these, you may already be out of compliance.
What PACT Act Reporting Involves
PACT Act compliance has three primary pillars:
- Registration with the ATF and every state into which you ship
- Monthly reporting to the ATF and each of those states
- Shipping compliance, including carrier restrictions and age verification
Each monthly report must include:
- The name and address of each recipient
- The quantity and type of product shipped
- The brand and manufacturer information
- The address from which the products were shipped
- The shipping carrier used
Reports must be submitted to:
- The ATF
- Each state’s tax department or other designated authority
You must also ensure your shipments comply with PACT Act shipping requirements. Notably, USPS is prohibited from shipping ENDS products. Private carriers (like FedEx and UPS) have their own policies — and many refuse to carry vape products entirely.
That leaves many businesses relying on niche or regional carriers, some of which require you to prove age verification and maintain detailed delivery logs.
🔍 “Many companies overlook the need to register in jurisdictions they assume don’t apply. But increasingly, states and localities are asserting authority under PACT. Businesses must take a proactive approach to registration and reporting.”
— Dov Seewald, TVC Law Group
Before You File: Registration Requirements
Before you can legally ship vape products across state lines, you must first register with:
- The ATF, using their online registration portal
- Each state where recipients are located
Each state has different requirements. Some states require you to register as a tobacco distributor, even if you never sell directly to consumers. Others require tax filings or licensing, even if they don’t currently impose a vape tax.
States like New York, California, and Texas have robust enforcement mechanisms. Others are quickly ramping up their own systems to identify non-compliant shippers and recover unpaid taxes.
At this time, there is no centralized system for registration. Registration must be completed on a state-by-state basis, with documentation ranging from business licenses to resale certificates.
Common Mistakes That Get Vape Businesses in Trouble
Because of the patchwork nature of vape regulation, even experienced businesses often make preventable mistakes. The most common include:
- Shipping through unauthorized carriers (e.g., USPS)
- Assuming B2B = exempt from PACT requirements
- Failing to register in “low-tax” or “no-tax” states, thinking they don’t matter
- Missing or delaying monthly reports, especially in busy seasons
- Inadequate recordkeeping for audits and inspections
These errors can lead to:
- Civil penalties of up to $5,000 per day
- Criminal charges for ongoing violations
- Loss of shipping privileges
- Seizure of inventory
PACT Act enforcement is not theoretical. Multiple brands and retailers have been penalized in the past two years for failing to file proper reports or using restricted carriers.
How to Automate and De-Risk with Token of Trust
Complying with the PACT Act doesn’t have to be a manual, error-prone burden. Token of Trust helps vape businesses automate compliance while maintaining a seamless customer experience.
Our platform enables you to:
- Verify age and identity at checkout using government-issued ID and facial recognition
- Collect and store business licenses and resale certificates from B2B buyers
- Track document status across accounts, so you’re not chasing paperwork
- Maintain audit-ready records for shipping history, verification logs, and license status
For businesses that work with fulfillment or dropship partners, Token of Trust makes it easy to document downstream compliance and ensure each transaction includes the right checks.
Whether you’re using WooCommerce, Shopify, or a custom ecommerce stack, our integrations make PACT Act compliance scalable — not a barrier to growth.
Legal Perspective: TVC Law Group
TVC Law Group is a trusted legal partner for businesses in the tobacco, vapor, and cannabis industries.
Their services include:
- FDA Compliance: PMTA filings, registration, product labeling, and marketing support
- State Regulation: Legal tracking, e-commerce guidance, compliance audits
- Tax and Licensing: PACT Act registration, excise and sales tax guidance, and filings with tax departments
Note: TVC Law Group contributed general legal commentary to this article but has not provided individualized legal advice. For legal representation or compliance opinions, please contact TVC Law Group directly.
For legal compliance audits, strategy, or representation, visit TVC Law Group to learn more.
What To Do If You’re Not Sure Where You Stand
Many vape businesses fall into a gray zone. If you’re unsure whether the PACT Act applies to your operations — or if your current process covers your bases — the best next step is to get clarity now.
That starts with reviewing:
- Your shipping partners and routes
- Whether you’re registered in the right states
- Your monthly reporting and documentation flow
With enforcement rising and more states getting involved, this is not an area to leave unchecked.
Need help evaluating where you stand?
→ Schedule a quick compliance consult with Token of Trust
We’ll walk you through what the PACT Act requires and show how to build a scalable, compliant process that supports your business growth.
