The PACT Act, passed by Congress last year, is recognized by many in the tobacco industry as imposing new requirements for Internet sales, including generally prohibiting the use of the U.S. mail to deliver cigarettes and smokeless tobacco and imposing new age-verification requirements to stop remote sales to minors.
A less well-known aspect of the PACT Act is the Act’s new reporting requirements for remote sales. Under the original Jenkins Act, which was enacted in 1949, interstate cigarette sellers were supposed to report their sales to state taxing authorities, but only if they sold the cigarettes to someone other than a distributor. This reporting requirement was intended to facilitate the collection of taxes from consumers who bought cigarettes remotely, such as through mail order.
The PACT Act’s amendments to the Jenkins Act amplified the reporting requirements for interstate sellers, removing the exemption for interstate shipments to distributors. These reporting requirements, which became effective last summer, generally require reporting of all interstate shipments. Those reports must be filed with state and local taxing authorities. Interstate sellers are also required to register with state taxing authorities, as well as with the U.S. Attorney General.