Tennessee Excise Tax Rate Goes Live in July

On July 1, 2025, Tennessee will begin enforcing a 10% excise tax on the wholesale cost of vapor products — marking one of the most aggressive regulatory shifts for alternative nicotine in recent years. While this law applies specifically to Tennessee, it signals something much larger: excise tax expansion is accelerating nationwide.

If you manufacture, distribute, or retail non-combustible nicotine products, this isn’t just a Tennessee issue — it’s the front edge of a growing national trend toward tax parity, product registration, and state-by-state enforcement.

What the Tennessee Law Actually Requires

This isn’t just a tax change — it’s a multi-year compliance rollout designed to control which vapor products are sold in-state.

Here’s what’s happening:

✅ Effective July 1, 2025

  • 10% excise tax on the wholesale cost of vapor products
  • Wholesalers must file monthly returns using Form TOB 552

✅ By August 1, 2025

  • All manufacturers must register each vapor product SKU with the Tennessee Department of Revenue
  • Retailers must buy only from licensed distributors

✅ By January 1, 2026

  • Tennessee will publish a public-facing Vapor Product Directory

✅ By January 1, 2027

  • Unregistered products will be banned from retail sale
  • Retailers and distributors will have 60 days to remove non-listed SKUs
  • Violations may lead to seizure and destruction

This framework goes far beyond taxation — it creates a gatekeeping mechanism that controls market access through SKU-level compliance.

Why This Isn’t Just About Tennessee

Tennessee is one of 30+ states that have introduced, proposed, or passed new excise tax laws targeting vapor, nicotine pouches, and synthetic products. Some, like Nebraska and Washington, have already enacted similar changes. Others, including Ohio, Michigan, and New Jersey, are embedding tax increases directly into their budget bills.

The pressure is mounting from three angles:

  • Falling cigarette tax revenue is driving urgency
  • Alternative formats are gaining market share but remain under-taxed
  • Legislators are pushing for “parity” between combustible and non-combustible products

For brands operating across multiple states, compliance is no longer just about shipping or labeling — it’s about staying ahead of fast-moving, SKU-level regulations that are changing every quarter.

How Token of Trust Helps Brands Stay Compliant

Token of Trust’s Excise Tax Engine is purpose-built for this regulatory moment. Whether you’re facing Tennessee’s directory requirements or preparing for tax shifts in 10+ states, we help you stay aligned without slowing down your team.

With Token of Trust, you get:

  • ✅ Jurisdiction-specific excise tax automation
  • ✅ SKU-level mapping and compliance tracking
  • ✅ Real-time alerts when laws or rates change
  • ✅ Exportable audit trails and records-on-demand

Next Step: Are You Ready for July?

If you sell vapor or nicotine products into Tennessee — or any state exploring excise reform — now is the time to evaluate your tax setup and compliance process.

Want to see where your SKUs stand?
👉 Talk to a compliance expert