2026 -- S 3005 SUBSTITUTE A

========

LC004717/SUB A

========

     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2026

____________

A N   A C T

RELATING TO TAXATION -- CIGARETTE, OTHER TOBACCO PRODUCTS, AND

ELECTRONIC NICOTINE-DELIVERY SYSTEM PRODUCTS

     Introduced By: Senators Ciccone, DiPalma, and Raptakis

     Date Introduced: March 04, 2026

     Referred To: Senate Special Legislation and Veterans Affairs

     It is enacted by the General Assembly as follows:

     SECTION 1. Sections 44-20-1, 44-20-4.1 and 44-20-8.2 of the General Laws in Chapter

44-20 entitled "Cigarette, Other Tobacco Products, and Electronic Nicotine-Delivery System

Products" are hereby amended to read as follows:

     44-20-1. Definitions.

     Whenever used in this chapter, unless the context requires otherwise:

     (1) “Administrator” means the tax administrator.

     (2) “Cigarettes” means and includes any cigarettes suitable for smoking in cigarette form,

“heat not burn products,” and each sheet of cigarette rolling paper, including but not limited to,

paper made into a hollow cylinder or cone, made with paper or any other material, with or without

a filter suitable for use in making cigarettes.

     (3) “Dealer” means any person whether located within or outside of this state, who sells or

distributes cigarettes and/or other tobacco products and/or electronic nicotine-delivery system

products to a consumer in this state.

     (4) “Distributor” means any person:

     (i) Whether located within or outside of this state, other than a dealer, who sells or

distributes cigarettes and/or other tobacco products and/or electronic nicotine-delivery system

products within or into this state. Such term shall not include any cigarette or other tobacco product

manufacturer, export warehouse proprietor, or importer with a valid permit under 26 U.S.C. § 5712,

if such person sells or distributes cigarettes and/or other tobacco products and/or electronic

nicotine-delivery system products in this state only to licensed distributors, or to an export

warehouse proprietor or another manufacturer with a valid permit under 26 U.S.C. § 5712;

     (ii) Selling cigarettes and/or other tobacco products and/or electronic nicotine-delivery

system products directly to purchasers in this state by means of at least twenty-five (25) vending

machines;

     (iii) Engaged in this state in the business of manufacturing cigarettes and/or other tobacco

products and/or electronic nicotine-delivery system products or any person engaged in the business

of selling cigarettes and/or other tobacco products and/or electronic nicotine-delivery system

products to dealers, or to other persons, for the purpose of resale only; provided, that seventy-five

percent (75%) of all cigarettes and/or other tobacco products and/or electronic nicotine-delivery

system products sold by that person in this state are sold to dealers or other persons for resale and

selling cigarettes and/or other tobacco products and/or electronic nicotine-delivery system products

directly to at least forty (40) dealers or other persons for resale; or

     (iv) Maintaining one or more regular places of business in this state for that purpose;

provided, that seventy-five percent (75%) of the sold cigarettes and/or other tobacco products

and/or electronic nicotine-delivery system products are purchased directly from the manufacturer

and selling cigarettes and/or other tobacco products and/or electronic nicotine-delivery system

products directly to at least forty (40) dealers or other persons for resale; or

     (v) Engaged in this state as a dealer and whose annual business sales of cigars are greater

than fifty percent (50%) of their sales.

     (5) “Electronic nicotine-delivery system” means an electronic device that may be used to

simulate smoking in the delivery of nicotine or other substance to a person inhaling from the device,

and includes, but is not limited to, an electronic cigarette, electronic cigar, electronic cigarillo,

electronic little cigars, electronic pipe, electronic hookah, e-liquids, e-liquid products, or any related

device and any cartridge or other component of such device.

     (6) “Electronic nicotine-delivery system products” means any combination of electronic

nicotine-delivery system and/or e-liquid and/or any derivative thereof, and/or any e-liquid

container. Electronic nicotine-delivery system products shall include hemp-derived consumable

CBD products as defined in § 2-26-3.

     (7) “E-liquid” and “e-liquid products” mean any liquid or substance placed in or sold for

use in an electronic nicotine-delivery system that generally utilizes a heating element that

aerosolizes, vaporizes, or combusts a liquid or other substance containing nicotine or nicotine

derivative:

LC004717/SUB A - Page 2 of 6

     (i) Whether the liquid or substance contains nicotine or a nicotine derivative; or

     (ii) Whether sold separately or sold in combination with a personal vaporizer, electronic

nicotine-delivery system, or an electronic inhaler.

     (8) “Importer” means any person who imports into the United States, either directly or

indirectly, a finished cigarette or other tobacco product and/or electronic nicotine-delivery system

product for sale or distribution.

     (9) “Licensed,” when used with reference to a manufacturer, importer, distributor, or

dealer, means only those persons who hold a valid and current license issued under § 44-20-2 for

the type of business being engaged in. When the term “licensed” is used before a list of entities,

such as “licensed manufacturer, importer, wholesale dealer, or retailer dealer,” such term shall be

deemed to apply to each entity in such list.

     (10) “Manufacturer” means any person who manufactures, fabricates, assembles,

processes, or labels a finished cigarette and/or other tobacco products and/or electronic nicotine-

delivery system products.

     (11) “Other tobacco products” (OTP) means any products that are made from or derived

from tobacco or that contain nicotine, whether natural or artificial, including, but not limited to,

cigars (excluding Little Cigars, as defined in § 44-20.2-1, which are subject to cigarette tax),

cheroots, stogies, smoking tobacco (including granulated, plug cut, crimp cut, ready rubbed and

any other kinds and forms of tobacco suitable for smoking in a pipe or otherwise), chewing tobacco

(including Cavendish, twist, plug, scrap and any other kinds and forms of tobacco suitable for

chewing), any and all forms of hookah, shisha and “mu’assel” tobacco, snuff, and shall include any

other articles or products made of, derived from, or containing tobacco or nicotine, in whole or in

part, or any tobacco or nicotine substitute, except cigarettes and electronic nicotine-delivery system

products. Other tobacco products shall not mean any product that has been approved by the United

States Food and Drug Administration for the sale of or use as a tobacco or nicotine cessation

product or for other medical purposes and is marketed and sold or prescribed exclusively for that

approved purpose.

     (12) “Person” means any individual, including an employee or agent, firm, fiduciary,

partnership, corporation, trust, or association, however formed.

     (13) “Pipe” means an apparatus made of any material used to burn or vaporize products so

that the smoke or vapors can be inhaled or ingested by the user.

     (14) “Place of business” means any location where cigarettes and/or other tobacco products

and/or electronic nicotine-delivery system products are sold, stored, or kept, including, but not

limited to; any storage room, attic, basement, garage or other facility immediately adjacent to the

LC004717/SUB A - Page 3 of 6

location. It also includes any receptacle, hide, vessel, vehicle, airplane, train, or vending machine.

     (15) “Sale” or “sell” means gifts, exchanges, and barter of cigarettes and/or other tobacco

products and/or electronic nicotine-delivery system products. The act of holding, storing, or

keeping cigarettes and/or other tobacco products and/or electronic nicotine-delivery system

products at a place of business for any purpose shall be presumed to be holding the cigarettes and/or

other tobacco products and/or electronic nicotine-delivery system products for sale. Furthermore,

any sale of cigarettes and/or other tobacco products and/or electronic nicotine-delivery system

products by the servants, employees, or agents of the licensed dealer during business hours at the

place of business shall be presumed to be a sale by the licensee.

     (16) “Stamp” means the impression, device, stamp, label, or print manufactured, printed,

or made as prescribed by the administrator to be affixed to packages of cigarettes, as evidence of

the payment of the tax provided by this chapter or to indicate that the cigarettes are intended for a

sale or distribution in this state that is exempt from state tax under the provisions of state law; and

also includes impressions made by metering machines authorized to be used under the provisions

of this chapter.

     44-20-8.2. Transactions only with licensed manufacturers, importers, distributors,

and dealers.

     A manufacturer or importer may sell or distribute cigarettes and/or other tobacco products

and/or electronic nicotine-delivery system products to a person located or doing business within

this state, only if such person is a licensed importer or distributor. An importer may obtain cigarettes

and/or other tobacco products and/or electronic nicotine-delivery system products only from a

licensed manufacturer. A distributor may sell or distribute cigarettes and/or other tobacco products

and/or electronic nicotine-delivery system products to a person located or doing business within

this state, only if such person is a licensed distributor or dealer. A distributor may obtain cigarettes

and/or other tobacco products and/or electronic nicotine-delivery system products only from a

licensed manufacturer, importer, or distributor. A dealer may obtain cigarettes and/or other tobacco

products and/or electronic nicotine-delivery system products only from a licensed distributor.

     Provided, however, this section shall not apply to cigars. Provided, further, a distributor

who qualifies for a license under § 44-20-1(4)(v) may also obtain pipe tobacco products from an

unlicensed manufacturer, importer, or distributor.

     44-20-4.1. License availability.

     (a) No license under this chapter may be granted, maintained, or renewed if the applicant,

or any combination of persons owning directly or indirectly any interests in the applicant:

     (1) Owes five hundred dollars ($500) or more in delinquent taxes;

LC004717/SUB A - Page 4 of 6

     (2) Is delinquent in any tax filings for one month or more;

     (3) Had a license under this chapter revoked by the administrator within the past two (2)

years;

     (4) Has been convicted of a crime relating to cigarettes and/or other tobacco products

and/or any electronic nicotine-delivery system products;

     (5) Is a cigarette manufacturer or importer that is neither: (i) A participating manufacturer

as defined in subsection II (jj) of the “Master Settlement Agreement” as defined in § 23-71-2; nor

(ii) In full compliance with chapter 20.2 of this title and § 23-71-3;

     (6) Has imported, or caused to be imported, into the United States any cigarette and/or

other tobacco product and/or electronic nicotine-delivery system products in violation of 19 U.S.C.

§ 1681a or any other state or federal law; or

     (7) Has imported, or caused to be imported into the United States, or manufactured for sale

or distribution in the United States any cigarette that does not fully comply with the Federal

Cigarette Labeling and Advertising Act (15 U.S.C. § 1331 et seq.).

     (b)(1) No person shall apply for a new license or permit (as defined in § 44-19-1) or renewal

of a license or permit, and no license or permit shall be issued or renewed for any applicant, or any

combination of persons owning directly or indirectly any interests in the applicant, unless all

outstanding fines, fees, or other charges relating to any license or permit held by the applicant, or

any combination of persons owning directly or indirectly any interests in the applicant, as well as

any other tax obligations of the applicant, or any combination of persons owning directly or

indirectly any interests in the applicant have been paid.

     (2) No license or permit shall be issued relating to a business until all prior licenses or

permits relating to that business or to that location have been officially terminated and all fines,

fees, or charges relating to the prior license or permit have been paid or otherwise resolved or the

administrator has found that the person applying for the new license or permit is not acting as an

agent for the prior licensee or permit holder who is subject to any such related fines, fees, or charges

that are still due. Evidence of such agency status includes, but is not limited to, a direct familial

relationship and/or an employment, contractual, or other formal financial or business relationship

with the prior licensee or permit holder.

     (3) No person shall apply for a new license or permit pertaining to a specific location in

order to evade payment of any fines, fees, or other charges relating to a prior license or permit.

     (4) No new license or permit shall be issued for a business at a specific location for which

a license or permit already has been issued unless there is a bona fide, good-faith change in

ownership of the business at that location. A distributor who qualifies for a license under § 44-20-

LC004717/SUB A - Page 5 of 6

1(4)(v) may hold said license at the same location as its dealer's license.

     (5) No license or permit shall be issued, renewed, or maintained for any person, including

the owners of the business being licensed or having applied and received a permit, that has been

convicted of violating any criminal law relating to tobacco products, the payment of taxes, or fraud

or has been ordered to pay civil fines of more than twenty-five thousand dollars ($25,000) for

violations of any civil law relating to tobacco products, the payment of taxes, or fraud.

     SECTION 2. This act shall take effect upon passage.

========

LC004717/SUB A

========

LC004717/SUB A - Page 6 of 6

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TAXATION -- CIGARETTE, OTHER TOBACCO PRODUCTS, AND

ELECTRONIC NICOTINE-DELIVERY SYSTEM PRODUCTS

***

     This act would amend the definition of "distributor" under the chapter relating to taxation-

-cigarette, other tobacco products, and electronic nicotine-delivery system products, to include

dealers whose annual business sales of cigars are greater than fifty percent (50%) of their sales.

     This act would take effect upon passage.

========

LC004717/SUB A

========

LC004717/SUB A - Page 7 of 6