Vapor Products are Subject to TN Tax July 1, 2025

Starting July 1, 2025, Tennessee will roll out a new tax and regulatory framework for vapor products, impacting every link in the supply chain, from manufacturers to distributors to retailers. These changes aren’t just about higher taxes; they introduce strict licensing, product registration, sourcing restrictions, and a statewide product directory that will determine what can and can’t be sold.

Whether you’re selling at the retail counter, distributing across state lines, or manufacturing product lines for the Tennessee market, here’s what you need to know and do before the deadlines hit.

1. Wholesale Tobacco Tax – 10 %

As of July 1, 2025, vapor products are now subject to Tennessee’s tobacco tax:

• 10% of the wholesale cost must be reported and remitted monthly.
• Use Form TOB‑552 (Tennessee Tobacco Products Return) for remittance.

Who’s impacted:

• Manufacturers, distributors, and wholesalers who make wholesale sales in Tennessee.

2. Mandatory Product Registry – Effective August  1, 2025

Starting August 1, 2025, all manufacturers (and importers/intermediaries) who place vapor products into Tennessee’s retail channels must:

• Register each product with TN Department of Revenue.
• Pay $25/year per product for inclusion.

And as of August 1, retailers can only purchase from licensed wholesalers/distributors.

Need help with your licensure? Source, validate, store, and maintain business licenses for tax compliance with ComplyIQ and get notified when your retailer or distributors’ licenses are outdated or changed.

3. Directory Goes Live January  1, 2026

• The Department will publish the vapor product directory on Jan 1, 2026.
• Only listed products may be sold in Tennessee.
• A 60-day removal window follows publication, unlisted inventory thereafter is subject to seizure and destruction.

4. Final Phase‑out by Jan  1, 2027

• After January 1, 2027, only directory-listed products may be sold—others are illegal.

What This Means for Your Business

For Manufacturers:

• By August 1: Register products, pay fees, ensure PMTA compliance, US consumables, and no adversarial sourcing.
• Fulfill FDA documentation deadlines (PMTA filed by Sept 9, 2020).
• Update annually and ahead of directory publication.

For Distributors/Wholesalers:

• Obtain licensing for tobacco/vapor distribution.
• From August 1, only sell registered/licensed products.
• Collect 10% tax and file monthly.
• Plan for directory release in Jan 2026—cease distribution of unlisted products after 60 days.

For Retailers:

• Purchase only from licensed and compliant distributors.
• Be ready to remove non-listed stock starting March 2026.
• Last legal sales date for unlisted product: Dec 31, 2026.
• Ensure rigorous age verification (ID all appearing under age 50).

Compliance Checklist

Tennessee’s new framework brings significant obligations—from withholding taxes to product registration and strict vendor vetting. It also delivers a clear path to market legitimacy for compliant products.

Start your preparations now to ensure your supply chain, licensing, documentation, and sales processes align with the phased implementation (July 1 → Aug 1 → Jan 1 → Jan 1). For detailed guidance, consult the full Notice #25‑06 and reach out to Tennessee Department of Revenue via their Revenue Help portal.

This analysis is intended for informational purposes only and is not tax advice.  For tax advice, consult your tax adviser. See the full disclaimer here