One-Stop Licensing

Tobacco Product Regulations

The Department of Revenue is mandated by Montana law to administer the tobacco products tax, which includes overseeing the following primary purposes of the tax:

To promote public welfare
To stabilize the sale of cigarettes, and
To maximize and protect state revenues from this source.

Basic Distribution

Montana law prohibits the sale of tobacco products to persons less than 18 years of age (16-11-304, MCA).

All retail businesses must clearly post signs and prohibit sales to persons under 18 years of age.
Cigarette vending machines may only be placed at locations where alcoholic beverages are sold for consumption on the premises and within the line of sight of the employees and/or the owner of the premises (16-11-306, MCA).
The enforcement of tobacco product sales to minors is regulated through Title 16, Chapter 11, Part 3, Youth Access to Tobacco Products Control Act.

Minimum Price Requirements

To be in compliance with the Master Settlement Agreement (MSA), all cigarettes sold in Montana must be listed on the Montana Attorney General's list of approved brand families.

To be approved, the manufacturer must:

Be participating in the Master Settlement Agreement and faithfully fulfilling its financial obligations under this agreement, or
Be a nonparticipating manufacturer who has set up a qualified escrow fund and has placed the required amounts into that fund, and
File monthly reports to the Attorney General's office detailing the status of the escrow account or the MSA financial obligations, and the brands of cigarettes to be sold in the state.

In addition, the cigarette manufacturer must submit to the Department of Revenue a wholesale base price of each approved brand of cigarettes. This allows the department to set and post the cigarette minimum price, including all applicable federal and state taxes and markup (16-10-103, MCA).

A brand of cigarette can be distributed in Montana only with an established minimum price. The minimum price of each brand establishes the lowest price for which that specific brand can be sold within the state.
The Department of Revenue publishes a new wholesale and retail minimum price within five (5) working days after the registered cigarette manufacturer informs the department of the new base price.

Registration and Licensing Requirements

All distributors or carriers of tobacco products must be registered, licensed and submit the appropriate reports to the Department of Revenue.

Business Type	Description	Registration	Licensing Fee
Wholesaler	An entity or a person who purchases tobacco products from a manufacturer, a sole distributor, another wholesaler, or any other person for the purpose of selling tobacco products to subjobbers, tobacco product vendors, wholesalers, or retailers.	Yes	$50
Subjobber	An entity or a person who purchases tobacco products from a Montana licensed wholesaler with the cigarette tax insignia affixed and sells or offers to sell tobacco products to a licensed retailer or tobacco product vendor. An isolated sale or exchange of cigarettes between licensed retailers does not constitute those retailers as subjobbers.	Yes	$50
Tobacco Product Vendor	An entity or a person who own and operates 10 or more tobacco product vending machines for a profit in premises or locations other than the person's own.	Yes	$50
Tobacco Product Retailer	An entity or a person who sells tobacco products to the consumer. This term includes an entity or a person who own and operates fewer than 10 tobacco product vending machines for a profit in premises or locations other than the person's own.	Yes	$5
Common Carrier	A common carrier hauls, transports, or ships any tobacco products into or out of the State of Montana from or to any other state or country.	No	None
Tobacco Product Importers	An entity or a person who accepts purchase orders for tobacco product sales requiring delivering, mailing, or shipping tobacco products into Montana to a person other than a Montana licensed wholesaler, subjobber, tobacco product vendor or retailer.	Yes	None

Taxable Products and Tax Rates

The tobacco product tax is added to the minimum selling price and passed on to the ultimate consumer.

Tobacco Products	Definition Used by Montana Department of Revenue	Tax Rate
Cigarette	Loose tobacco wrapped in a paper or a paper blended product, offered or likely to be offered, or purchased by consumers as a cigarette.	$0.085 / stick ($1.70 / pack of 20 cigarettes)
Moist snuff	Finely cut, ground, or powdered tobacco, other than dry snuff, that is intended to be placed in the oral cavity.	$0.85 / ounce
Roll-your-own (RYO) tobacco	Loose tobacco that is suitable for making cigarettes.	50% of the wholesale price
Pipe tobacco	Loose tobacco that is not suitable for making cigarettes.	50% of the wholesale price
Cigar	Loose tobacco wrapped in a tobacco leaf.	50% of the wholesale price

Tobacco Product Sales or Distribution into Montana

Internet Sellers Warning

Reporting Requirements

Form ID	Form Name	Due Date	Purpose of Form	Remitted by
CT-201	Cigarette Tax Decals Order Form	None	Cigarette tax insignia order form	Wholesalers
CT-203	Insignia Refund Application	None	Cigarette tax refund request form	Wholesalers
CT-205	Cigarette Tax	15th of the following month	Cigarette monthly inventory and tax insignia reconciliation report	Wholesalers
CT-206	Cigarette Tax Exempt Sale Certificate	None	Tax exempt sale certificate is issued to wholesalers for exempted cigarette sales to Montana sovereign tribes	Wholesalers
CT-207	Exempted Sales Refund Application	None	Reconciliation form to request tax refund from exempted sales	Wholesalers
CT-MFG1	Manufacturer Cigarette Tax	None	Cigarette tax report form remitted by tobacco product manufacturers who have shipped tobacco product directly to the consumers or retailers	Tobacco Product Manufacturer
TP-101	Tobacco Product Tax	15th of the following month	Tobacco product tax monthly reporting from sales of tobacco products that are not a cigarette	Wholesalers, Subjobbers, Tobacco Product Vendors, or Tobacco Product Retailers
TP-102	Tobacco Product Tax Credit	None	Tobacco product credit or refund request form for pre-paid tobacco product tax. To be submitted with the TP-101 when applicable	Wholesalers, Subjobbers, Tobacco Product Vendors, or Tobacco Product Retailers
TP-103New	Tobacco Product Delivery	10th of the following month	Tobacco product delivery to an unlicensed person	Common Carrier
TP-104New	Tobacco Product Delivery Sales	10th of the following month	Identify tobacco products sales by persons who accept purchase orders for tobacco sales	Any person who accepts purchase orders for tobacco product sales

Violations and Penalties

By definition, contraband is:

Any tobacco product possessed, sold, offered for sale, distributed, held, owned, acquired, transported, imported, or caused to be imported in violation of Title 16, Chapter 11, Part 1.
Any cigarette or roll-your-own tobacco that is possessed, sold, offered for sale, distributed, held, owned, acquired, transported, imported, or caused to be imported in violation of Title 16, Chapter 11, part 4 or part 5;
Any cigarettes that bear a trademark that is counterfeit under state or federal trademark laws.
Any cigarettes bearing false or counterfeit insignia or tax insignia from other states.
Any cigarettes or tobacco products that violate 16-10-306, MCA.

Violations

Criminal Penalty

Civil Penalty

Selling cigarettes below the established minimum price

None

The civil penalty is assessed based on the number of packs of cigarettes. The penalty is $250 for the first pack and $10 for each additional pack cigarettes

Failure to pay the tobacco products tax
Selling cigarettes and other tobacco products without a license
Selling unapproved brands of cigarettes or selling unstamped cigarettes or packs affixed with the insignia of another state is the same as selling contraband products
Transportation and holding of contrabands

Violation involving contraband products valued less than $1000:

First violations offenders penalty is waived, with a warning.
Second violations offenders will be charged with a misdemeanor punishable by imprisonment for a term not less than 30 days up to 6 months or a fine not less than $100 up to $500 or both
Subsequent violations will constitute a felony punishable by a minimum imprisonment of 1 year or a fine not to exceed $50,000 or both

Violation involving contraband products valued greater than $1000:

First violation constitutes a misdemeanor punishable by imprisonment for a term of up to one year or a fine of up to $1000 or both
Second and subsequent violations will constitute a felony punishable by a minimum imprisonment of one year or a fine not to exceed $50,000 or both

The civil penalty will be assessed against all violations involving contraband products valued greater than $1000

The civil penalty is assessed based on the number of packs of cigarettes. For the purpose of this penalty:

0.09 ounces of roll-your-own tobacco constitutes one individual cigarette
20 cigarettes constitute one pack of cigarettes, and
1.80 ounces of roll-your-own tobacco constitutes one pack of cigarettes

The penalty is $250 for the first pack and $10 for each additional full or partial pack of contraband cigarettes

Click here for the Montana Code Annotated page.

Click here for the Administrative Rules of Montana for Tobacco Products.