HB 1220

26.355.42  101st Legislative Session  1220
                                    2026 South Dakota Legislature
                                            House Bill 1220
                                                  ENROLLED
                                            AN ACT
ENTITLED An Act to regulate the sale of nicotine products, and to provide a penalty
         therefor.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:
Section 1. That § 10-1-28.2 be AMENDED:
            10-1-28.2. All lists of taxpayers, licensees, or applicants compiled by the
   Department of Revenue are confidential except licensees which were licensed under the
   provisions of chapter 10-47B, 32-6B, 32-6C, 32-7A, or 32-7B, or sections 3 to 14,
   inclusive, of this Act. It is a Class 2 misdemeanor to disclose any such list except to the
   extent necessary to carry out the official duties of the department.
Section 2. That § 10-50-11 be AMENDED:
            10-50-11. Each application for a distributor or wholesaler license shall be
   accompanied by a fee of one thousand dollars. If the applicant for a license has not entered
   upon the business of selling cigarettes or tobacco products until after the first day of
   January in any year, then the fee for a license during the remainder of the fiscal year is
   one-half the amount set forth in this section.
            Notwithstanding the provisions of § 10-50-52, the fees collected under this section
   must be deposited in the nicotine enforcement fund established in section 14 of this Act.
Section 3. That a NEW SECTION be added to a NEW CHAPTER in title 10:
            Terms used in this chapter mean:
   (1)      "Alternative nicotine product," a noncombustible product containing nicotine from
            any source or a nicotine analog that is intended for human consumption, whether
            chewed, absorbed, dissolved, ingested, inhaled, or consumed by any other means.
            The term does not include any vapor product, tobacco product, or any product
            regulated as a drug, food, or device by the United States Food and Drug
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            Administration under the Food, Drug and Cosmetic Act, 21 U.S.C chapter 9
            subchapter V (January 1, 2026);
   (2)      "Distributor," a person engaged in the business of selling or otherwise providing a
            nicotine product to a retailer for sale to a consumer;
   (3)      "Licensee," a person licensed under the provisions of this chapter;
   (4)      "Nicotine analog," a substance that:
            (a)    Has a chemical structure substantially similar to the chemical structure of
                   nicotine;
            (b)    Has, or is represented to have, an effect on the central nervous system
                   similar to the chemical nicotine; or
            (c)    Is manufactured, formulated, sold, distributed, or marketed with the intent
                   to avoid provisions of this chapter;
   (5)      "Nicotine product," an alternative nicotine product or vapor product, and does not
            include a tobacco product as defined by § 10-50-1 or cigarettes;
   (6)      "Retailer," a person engaged in the business of selling a nicotine product to an
            individual for any purpose other than resale; and
   (7)      "Vapor product," a noncombustible product containing nicotine or a nicotine analog
            that employs a heating element, power source, electronic circuit, or other
            electronic, chemical, or mechanical means, regardless of shape or size, which can
            be used to produce vapor or aerosol from nicotine or a nicotine analog in a solution.
            The term includes, but is not limited to, any electronic cigarette, electronic cigar,
            electronic cigarillo, electronic pipe, or similar product or device, and a consumable
            nicotine or nicotine analog solution suitable for use in such a device or a vapor
            product, and any component or part, whether sold with the device or separately.
            The term does not include any product approved by the United States Food and
            Drug Administration for sale as a tobacco cessation product and marketed and sold
            solely for that purpose.
Section 4. That a NEW SECTION be added to a NEW CHAPTER in title 10:
            A person, except a licensed distributor or licensed wholesaler under chapter 10-
   50, shall secure a license pursuant to this chapter, prior to selling nicotine products in this
   state for resale. If a person owns or operates more than one place of business selling
   nicotine products for resale, the person must secure a separate license for each place of
   business selling nicotine products.
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Section 5. That a NEW SECTION be added to a NEW CHAPTER in title 10:
            A person located within or outside of this state is eligible for a nicotine product
   distributor license. To receive an initial or renewal nicotine product distributor license, an
   applicant shall:
   (1)      File an application with the department on a form prescribed by the secretary;
   (2)      Pay a license fee of one thousand dollars;
   (3)      Hold a South Dakota sales and use tax license issued by the department; and
   (4)      Be current on the remittance of all applicable state and local taxes.
            The department shall issue a nicotine product distributor license to any applicant
   who meets the requirements of this chapter.
            All moneys collected by the department under this section must be forwarded to
   the state treasurer for deposit in the nicotine enforcement fund established under section
   14 of this Act.
Section 6. That a NEW SECTION be added to a NEW CHAPTER in title 10:
            Unless otherwise provided in this section, a nicotine product distributor license is
   valid from July first through June thirtieth. A license is valid for an additional three days if
   an application for a new license is in the possession of the department before midnight on
   the thirtieth day of June when the license expires.
Section 7. That a NEW SECTION be added to a NEW CHAPTER in title 10:
            A nicotine product distributor shall maintain, for at least three years, all
   documentation detailing the manufacturer, address of the manufacturer, and sales, of all
   nicotine products. A nicotine product distributor shall submit to an inspection of inventory,
   products, and documentation, and shall provide a copy of the documentation to the
   department, upon request.
            A violation of this section is a Class 2 misdemeanor.
Section 8. That a NEW SECTION be added to a NEW CHAPTER in title 10:
            The secretary may revoke a nicotine product distributor license for failure to comply
   with any provision of state law.
            A person aggrieved by the revocation may, in writing, request a contested case
   hearing before the secretary. The request must be received by the department within
   fourteen days from the date the notice of revocation was mailed to the licensee by certified
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   mail. If a request for a hearing is not received by the department within the time
   prescribed, the revocation becomes final. Any hearing must be conducted, and any appeal
   must be taken, pursuant to the provisions of chapters 1-26 and 1-26D.
            A person who sells nicotine products without a valid license or registration is guilty
   of a Class 1 misdemeanor.
Section 9. That a NEW SECTION be added to a NEW CHAPTER in title 10:
            A nicotine product retailer may buy or receive nicotine products only from a
   licensee, or a licensed distributor or licensed wholesaler under chapter 10-50. A violation
   of this section is a Class 2 misdemeanor.
Section 10. That a NEW SECTION be added to a NEW CHAPTER in title 10:
            A person who is engaged in the business of selling or distributing nicotine products
   may not ship or transport, or cause to be shipped or transported, nicotine products directly
   to any consumer in this state, except as provided in this section or in chapter 10-50C.
   This section applies regardless of whether the person engaged in the business of selling
   or distributing nicotine products is located within or outside of this state.
            A person licensed under this chapter or licensed as a distributor or wholesaler under
   chapter 10-50, may ship or transport, or cause to be shipped or transported, alternative
   nicotine products directly to any consumer in this state if:
   (1)      Prior to sale of the alternative nicotine product to the purchaser, the person verifies
            that the purchaser is at least twenty-one years of age through a commercially
            available database, or aggregate of databases, that is regularly used by
            government and businesses for the purpose of age and identity verification, or by
            obtaining a copy of a valid government-issued document that provides the name,
            address, and date of birth of the purchaser;
   (2)      Prior to shipping or sending the purchased products, the person has received
            payment for the sale from the purchaser by a credit card or debit card issued in
            the purchaser's name, or by a check that is associated with a bank account in the
            purchaser's name and the name matches the name of the purchaser whose age
            was verified under subdivision (1);
   (3)      The person uses a method of mailing, shipping, or delivery that requires the
            signature of a person who is at least twenty-one years of age before the package
            is released to the purchaser;
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   (4)      The person holds a South Dakota sales and use tax license issued by the
            Department of Revenue;
   (5)      The person conspicuously labels each package to be shipped or transported,
            indicating the package contains an alternative nicotine product and that the
            signature of an individual who is at least twenty-one years of age is required before
            the package is released to the purchaser;
   (6)      The person maintains a record of the name, address, date of birth, and telephone
            number or email, of the purchaser;
   (7)      The person remits all applicable taxes for the alternative nicotine product; and
   (8)      The alternative nicotine product is not being provided for purposes of resale to
            consumer.
            A person shipping or transporting an alternative nicotine product shall allow the
   Department of Revenue to conduct an audit of the records pertaining to shipping or
   transporting an alternative nicotine product, including the records used to verify the age
   of the purchaser. The person shall provide copies of the records to the department upon
   request.
Section 11. That a NEW SECTION be added to a NEW CHAPTER in title 10:
            The attorney general may bring a civil action in circuit court for any violation of
   section 10 of this Act. In addition to injunctive or any other relief, the court may impose,
   for a first violation of section 10 of this Act, a civil penalty in the amount of one thousand
   dollars or five times the retail value of the nicotine products involved, whichever is greater.
   A subsequent violation of section 10 of this Act is punishable by a civil penalty of five
   thousand dollars or five times the retail value of the nicotine products involved, whichever
   is greater.
Section 12. That a NEW SECTION be added to a NEW CHAPTER in title 10:
            Each shipment, transport, or attempted shipment or transport, of nicotine products
   in violation of section 10 of this Act constitutes a separate violation.
Section 13. That a NEW SECTION be added to a NEW CHAPTER in title 10:
            Unless otherwise expressly provided, the penalties or remedies, or both, under
   sections 11 and 12 of this Act, inclusive, are in addition to any other penalties and
   remedies available under any other law of this state. Nothing in sections 11 and 12 of this
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   Act, inclusive, prohibits the collection of any applicable tax against a person receiving
   nicotine products in violation of this chapter.
Section 14. That a NEW SECTION be added to a NEW CHAPTER in title 10:
            There is created a nicotine enforcement fund. The Department of Revenue shall
   administer the fund. The purpose of the fund is to defray expenses associated with the
   enforcement of this chapter.
            Moneys collected under this Act must be forwarded to the state treasurer to be
   deposited into the fund. Interest on moneys credited to the fund must remain in the fund.
            Expenditures from the fund must be budgeted through the general appropriation
   bill.
Section 15. That a NEW SECTION be added to a NEW CHAPTER in title 10:
            An alternative nicotine product shipped or transported under section 10 of this Act
   is only for personal use and may not be resold. A violation of this section is a Class 1
   misdemeanor.
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An Act to regulate the sale of nicotine products, and to provide a penalty therefor.
                                                     Received at this Executive Office
 I certify that the attached Act originated in       this _____ day of _____________,
 the:
                                                     2026 at ____________M.
 House as Bill No. 1220
                                                     By
                     Chief Clerk of the House  for the Governor
                                                                      The attached Act is hereby
                                                                  approved this ________ day of
                          Speaker of the House  ______________, A.D., 2026
 Attest:
                                                                                        Governor
                     Chief Clerk of the House
                                                     STATE OF SOUTH DAKOTA,
                                                                                               ss.
                                                     Office of the Secretary of State
                       President of the Senate
                                                                    Filed ____________, 2026
 Attest:  at _________ o'clock __M.
                       Secretary of the Senate  Secretary of State
 House Bill No. 1220  By
 File No. ____  Asst. Secretary of State
 Chapter No. ______
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