PIERRE, S.D. – Senate Bill 221 established a regulatory framework for the licensing and oversight of retailers of nicotine and vapor products in the state.
Retail Licenses Required:
Any business selling nicotine products (cigarettes and other tobacco products, vapor products, or alternative nicotine products) must obtain a state retail nicotine license for each location, in addition to its existing sales tax license. License fees vary based on the volume and location of nicotine products sold. Applications will be available for retailers to begin applying for the new nicotine license on November 1, 2026.
Sales Restrictions:
Prohibited practices include online, phone, and mail sales, free samples, and video game style packaging. Vending machines are allowed only in licensed alcohol or gaming venues, with access restricted to only those over the age of 21.
Sourced Only From Licensed Distributors:
Retailers are required to purchase all nicotine products exclusively from state-licensed distributors or wholesalers, with records maintained and subject to inspection.
Penalties for Non-Compliance — Violations carry escalating penalties:
• $500 first offense
• $1,000 second offense
• $2,000 plus a 30-day suspension for the third offense
• $5,500 plus license revocation for a fourth offense within 36 months
As a reminder, nicotine products may only be sold to customers who are 21 years of age or older.
SB 221: South Dakota Retailers: New Nicotine Regulations Go Into Effect January 1, 2027
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