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Cigarette & Tobacco


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Retailer Information
Retailer Registration
Tobacco Distributors and Wholesalers
Manufacturer's Certification of Tobacco Brands
Internet and Mail Order Cigarette and Tobacco Product Sales
Direct Cigar Shipping 
Cigarette and Tobacco Product Resources
Cigarette and Tobacco Online Forms


Retailer Information

The Department of Revenue is responsible for collecting the Cigarette Excise tax, Other Tobacco Products Tax, and regulating the tobacco industry in South Dakota.

See Retailer Information


Retailer Registration

To sell tobacco products (including cigarettes, cigars, pipe tobacco, and smokeless tobacco), retailers are required to have a Sales and Use Tax License. All businesses that sell cigarettes or other tobacco products at retail are required to register with the Department. There is no fee for this registration, no extra taxes, and no extra filing or reporting requirements. There is a box to select to register as a tobacco retailer when applying for with your sales tax license.

Tobacco retailers may only purchase their tobacco products from distributors and wholesalers licensed by the State of South Dakota. Retailers will be required to keep documentation showing all tobacco products were purchased from a licensed distributor or wholesaler. If you need a list of licensed tobacco distributors and wholesalers, please contact the Business Tax Division.

If your business ceases selling cigarette / tobacco, you may contact the Business Tax Division to be removed from the registration database.


Tobacco Distributors and Wholesalers

As a tobacco distributor, you are required to purchase South Dakota tax stamps and apply them to each pack of cigarettes prior to distributing them to retailers. Licensed tobacco distributor are required to purchase at least seventy-five percent of their cigarettes and other tobacco products directly from the manufacturer. 

Wholesalers are required to purchase cigarettes from a licensed distributor who has already applied the South Dakota tax stamps to cigarettes. They may purchase other tobacco products from a licensed distributor or directly from the manufacturer. 

To become a licensed distributor or wholesaler, please complete a tax license application.

Tobacco Retailers should not apply for a tobacco distributor or tobacco wholesaler's license. If you have questions on registration please see the retailer's registration information listed above.


Manufacturers Certification of Tobacco Brands

Only certified tobacco brands (PDF) may be sold in South Dakota. Participating and non-participating manufacturers must complete the Tobacco Product Manufacturer Certification Form on an annual basis. If the certification is approved by the Department of Revenue, the brand will be listed and approved for sale.

Nonparticipating Manufacturers with brands listed on the directory or which had sales in South Dakota also need to file a Certificate of Compliance with the Attorney General’s Office every quarter.


Internet and Mail Order Cigarette and Tobacco Product Sales

The shipment or transport of cigarettes or tobacco products to consumers in South Dakota is illegal under South Dakota law SDCL 10-50-99. Persons engaged in the business of selling or distributing cigarettes or tobacco products who ship or transport said products to consumers in South Dakota are subject to injunctions, substantial monetary penalties and surrender of profits. An exception exists for the shipment of cigars in South Dakota. See more information about direct cigar shipping below. 

Consumers purchasing cigarettes or tobacco products illegally online, over the phone, or by mail are subject to substantial taxes, interest, and penalties.  Additionally, the product is considered to be contraband and is required to be forfeited to the state and destroyed.

Direct Cigar Shipping

Beginning January 1, 2022, any cigar seller located inside or outside the state may ship cigars to South Dakota consumers if they have met the requirements to obtain a cigar shipper license and a sales tax license. 

Licensing Requirements

Cigar shippers wishing to become licensed in South Dakota need a sales tax license and a cigar shipper license. There is no fee for a sales tax license and they are valid until either cancelled or revoked. The cigar shipper license is valid from July 1st through June 30th and must be renewed annually. There is an annual fee of $100.00 for the cigar shipper license.

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Tax on Shipments

Cigar shippers are responsible for remitting 35% tobacco tax based on the wholesale purchase price of the cigars shipped to a consumer in South Dakota. If there is no wholesale price, then the 35% tobacco tax is due based on the manufacturer's cost to produce the cigar. Cigar shippers are also required to remit sales tax based on where the customer receives the order (the customer’s shipping address). Both the product cost and shipping charges are subject to sales tax. The 4.2% state sales tax applies to all shipments into South Dakota. The municipal sales tax applies to shipments made to a location within a municipality.


Reporting Requirements

Cigar shippers are required to file their tobacco tax and sales tax returns, as well as remit the tax due, each quarter through our online Filing and Tax Payment portal.

Other Requirements: 

Other items of interest as they relate to the cigar shipper license are:

  • The license only allows cigars to be shipped to SD consumers.  All other tobacco products are still prohibited from being shipped directly to consumers in SD.
  • Cigars may only be sold and delivered to consumers who are 21 years of age or older.
  • Packaging must be conspicuously labeled indicating that the package contains cigars.
  • Cigars shipped to consumers in SD may only be used for personal use and not resold.

Cigarette & Tobacco Product Resources

Cigarette & Tobacco Online Forms

Cigarette & Tobacco Frequently Asked Questions

See what others are asking about cigarette and tobacco taxes.

Cigarette taxes are paid by the distributors when they purchase the stamps that are found on each pack of cigarettes sold in South Dakota. The stamps are required to be placed on each pack of cigarettes prior to the sale to a retailer.

  • $1.53 per pack of 20 cigarettes
  • $1.92 per pack of 25 cigarettes

The Other Tobacco Product Tax (OTP) is paid by wholesalers and distributors when they ship or deliver the products to a South Dakota retailer. This tax applies to cigars, snuff, chewing tobacco, and any other tobacco product except for cigarettes.

  • 35% of the wholesale purchase price

Both cigarettes and other tobacco products are subject to the 4.2% state sales tax rate plus the general municipal sales tax rates when sold at retail.

Of the taxes collected, the first $30 million is deposited into the State General Fund. The next $5 million goes to the Tobacco Prevention & Reduction Trust Fund. Any additional funds are then deposited into the State General Fund.