Committee advances bill to license remote cigar retailers and collect other-tobacco-products tax

Carson City — The Senate Committee on Revenue moved Assembly Bill 471 forward after testimony that the measure would let Nevada collect excise taxes on remote sales of premium cigars and pipe tobacco.

Assemblymember Brian Hibbits introduced AB471 and said the bill addresses a gap created by online retail: remote retailers that meet Wayfair sales thresholds remit sales tax but not the state excise tax known as the OTP (other tobacco products) tax because current statutes and licensing are structured for brick-and-mortar wholesalers and retailers. “This bill will create a retail remote retail license that they will get and then have a path to pay the other tobacco product tax that should be paid anyway,” Hibbits said.

Beth Oliva, outside counsel representing the Cigar Association of America and the Premium Cigar Coalition, described the bill as model legislation developed with the Federation of Tax Administrators and said it has been enacted in several states. Oliva told the committee the bill addresses constitutional thresholds, establishes a licensing mechanism for remote retailers, and creates a workable tax base for premium cigars’ distinct manufacturing and pricing. She said her group projects roughly $750,000 in annual revenue based on 2022 sales and that the figure may be higher now.

Committee members sought details about the number and types of remote sellers that would be captured and how the constitutional thresholds in the bill operate. Oliva estimated there are about 30 remote retailers that could register under the proposed license (with roughly 6 of 7 major premium-cigar firms in her association exceeding the statutory threshold), and she said the bill uses the standard economic thresholds — $100,000 in gross receipts or 200 or more separate remote sales to Nevada consumers — to trigger registration and tax collection.

Other bill provisions discussed in testimony: a requirement that remote retailers employ age-verification technology; felony-conviction bars mirroring wholesaler penalties; an explicit exclusion of vape products from the measure; and preservation of a previously enacted pilot cap on the excise tax for premium cigars. Oliva and the sponsor said they worked with the Department of Taxation on the bill language and that the department will need to reprogram its licensing systems but is confident it can do so.

Supporters framed the bill as promoting tax equity for Nevada brick-and-mortar shops and improving compliance. Assemblymember Hibbits said local, brick-and-mortar businesses are being undercut by remote sellers that do not currently remit the OTP tax.

In work session the committee moved AB471 forward. Senator Dunate moved the do-pass motion and Senator Cruz Crawford seconded. The committee recorded four votes in favor and one nay (Senator Stone); the bill was advanced to the floor for additional consideration.