Changes to Existing Law

26.355.38 26.355.39 101st Legislative Session 1220 2026 South Dakota Legislature House Bill 1220 HOUSE HEALTH AND HUMAN SERVICES ENGROSSED This bill has been extensively amended (hoghoused) and may no longer be consistent with the original intention of the sponsor. Introduced by: Representative Mulder Underscores indicate new language. Overstrikes indicate deleted language. An Act to regulate the retail sale of nicotine products, and to provide a penalty therefor. 1 therefor. 2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA: 3 2 Section 1. That § 10-1-28.2 be AMENDED: 4 3 10-1-28.2. All lists of taxpayers, licensees, or applicants compiled by the 5 4 Department of Revenue are confidential, confidential except licensees which were licensed under the 6 5 provisions of chapter 10-47B, 32-6B, 32-6C, 32-7A, or 32-7B, or sections 2 3 to 20, 7 14, 6 inclusive, of this Act. It is a Class 2 misdemeanor to disclose any such list except to the 8 7 extent necessary to carry out the official duties of the department. 9 8 Section 2. That § 10-50-11 be AMENDED: 9 10-50-11. Each application for a NEW SECTION distributor or wholesaler license shall be added to 10 accompanied by a NEW CHAPTER in title 10: 10 Terms used in this chapter mean: fee of one hundred fifty one thousand dollars. If the applicant for a 11 (1) "Licensee," a person licensed under the provisions of this chapter; 12 (2) "Nicotine product," a product intended for human consumption, containing any 13 form of the chemical nicotine, including any sale or complex, from any source, 14 nicotinic alkaloids, nicotine analogs, and any substance intended to mimic or 15 replicate the pharmacological effect of nicotine. The term includes components, 16 parts, or accessories. The term does license has not include drugs, devices, or combination 17 products, as defined in the Federal Food, Drug, and Cosmetic Act, approved for 18 sale by the United States Food and Drug Administration. Any communication by, 19 or on behalf of, the manufacturer distributor, or retailer of a tobacco product that 20 indicates that the product contains a nicotine analog constitutes presumptive 21 evidence that the product contains a nicotine analog; 22 (3) "Retailer," a person engaged in entered upon the business of selling cigarettes or tobacco products until 12 after the first day of January in any year, then the fee for a nicotine product to an 23 individual for any purpose other than resale. 24 26.355.38 2 1220 Underscores indicate new language. Overstrikes indicate deleted language. license during the remainder 13 of the fiscal year is one-half the amount set forth in this section. 14 Section 3. That a NEW SECTION be added to a NEW CHAPTER in title 10: 1 A retailer shall secure a license under 15 Terms used in this chapter to sell mean: 16 (1) "Distributor," a person engaged in the business of selling a nicotine product for 17 resale; 18 (2) "Licensee," a person licensed under the provisions of this chapter; 19 (3) "Nicotine product," a product intended for human consumption, containing any 20 form of the chemical nicotine, including any sale or complex, from any source, 21 nicotinic alkaloids, nicotine analogs, and any substance intended to mimic or 22 replicate the pharmacological effect of nicotine. The term includes components, 23 parts, or accessories. The term does not include drugs, devices, or combination 24 26.355.39 2 1220 Underscores indicate new language. Overstrikes indicate deleted language. products, as defined in this the Federal Food, Drug, and Cosmetic Act, approved for 1 sale by the United States Food and Drug Administration. 2 state. A separate application Any communication by, or on behalf of, the manufacturer distributor, or retailer of 3 a tobacco product that indicates that the product contains a nicotine analog 4 constitutes presumptive evidence that the product contains a nicotine analog; and 5 (4) "Retailer," a separate license are required for each place person engaged in the business of business 3 of a retailer where selling a nicotine product is sold at retail. 4 An application to an 6 individual for a license required under this section must be made to the 5 Department of Revenue, on forms prescribed by the secretary. The application must 6 contain: any purpose other than resale. 7 (1) The contact information of the applicant; 8 (2) The name and mailing address of the registered agent of the applicant; 9 (3) The physical address and mailing address of the place of business of the retailer; 10 and 11 (4) All past and current violations of state or federal law by the applicant relating to 12 the sale, possession, or transportation of a nicotine product. 13 The application must be accompanied by a fee of one thousand dollars. 14 Section 4. That a NEW SECTION be added to a NEW CHAPTER in title 10: 15 8 A person, except a licensed distributor or licensed wholesaler under chapter 10-9 50, shall secure a license issued under section 3 of this Act is valid through June thirtieth following 16 the issuance of the license, unless the license is revoked sooner by the secretary pursuant 17 to this chapter. 18 A chapter, prior to selling nicotine products in this 10 state for resale. If a person owns or operates more than one place of business selling 11 nicotine products for resale, the person must secure a separate license issued under section 3 for each place of this Act is nontransferable. 19 12 business selling nicotine products. 13 Section 5. That a NEW SECTION be added to a NEW CHAPTER in title 10: 20 Prior to 14 A person located within or outside of this state is eligible for a nicotine product 15 distributor license. To receive an initial or renewal nicotine product distributor license, an 16 applicant shall: 17 (1) File an application with the expiration of department on a form prescribed by the secretary; 18 (2) Pay a license fee of one thousand dollars; 19 (3) Hold a South Dakota sales and use tax license issued by the department; and 20 (4) Be current on the remittance of all applicable state and local taxes. 21 The department shall issue a nicotine product distributor license to any applicant 22 who meets the requirements of this chapter. 23 All moneys collected by the department under this chapter, section must be forwarded to 24 the licensee may apply 21 to state treasurer for deposit in the Department nicotine enforcement fund established under section 25 14 of Revenue for a renewal of the license. 22 The fee to renew a license is one thousand dollars. 23 this Act. 26 Section 6. That a NEW SECTION be added to a NEW CHAPTER in title 10: 24 The Department of Revenue shall deny 27 Unless otherwise provided in this section, a nicotine product distributor license is 28 valid from July first through June thirtieth. A license is valid for an additional three days if 29 an application made under section 3 or 5 25 for a new license is in the possession of this Act if: 26 (1) The applicant includes any false information the department before midnight on 30 the application; 27 (2) The applicant is under thirtieth day of June when the age of twenty-one years; or 28 (3) The applicant has violated any state or federal law relating to the sale, possession, 29 or transport of a nicotine product. 30 26.355.38 license expires. 31 26.355.39 3 1220 Underscores indicate new language. Overstrikes indicate deleted language. Section 7. That a NEW SECTION be added to a NEW CHAPTER in title 10: 1 The place of business of a licensee where a A nicotine product is sold distributor shall not be maintain, for at least three years, all 2 located within one thousand feet documentation detailing the manufacturer, address of the manufacturer, ingredients, and 3 sales, of all nicotine products. A nicotine product distributor shall submit to an elementary or secondary school, unless nicotine 3 products were sold at inspection 4 of inventory, products, and documentation, and shall provide a copy of the place of business prior documentation 5 to July 1, 2026. 4 The distance measured for purposes the department, upon request. 6 A violation of this section is from the nearest point of the 5 property on which the place of business is situated, to the nearest point of the property 6 on which the school is situated. a Class 2 misdemeanor. 7 Section 8. That a NEW SECTION be added to a NEW CHAPTER in title 10: 8 A licensee shall not: 9 (1) Ship, or cause to be shipped, The secretary may revoke a nicotine product distributor license or the registration 9 of any nicotine product retailer for failure to an individual to be used or comply with any provision of state law. 10 consumed A person aggrieved by the individual; revocation may, in writing, request a contested case 11 (2) Sell, or offer hearing before the secretary. The request must be received by the department within 12 fourteen days from the date the notice of revocation was mailed to sell, the licensee by certified 13 mail. If a nicotine product request for a hearing is not received by the department within the time 14 prescribed, the revocation becomes final. Any hearing must be conducted, and any appeal 15 must be taken, pursuant to a the provisions of chapters 1-26 and 1-26D. 16 A person under the age of twenty-one 12 years; 13 (3) Sell, or offer to sell, a nicotine product in a vending machine; 14 (4) Sell a nicotine product by phone, voice transmission, mail, internet, electronic-15 application-based service, curbside pick-up, or by any third-party means; or 16 (5) Provide free samples of who sells nicotine products to an individual. without a valid license or registration is guilty 17 A licensee is responsible for, an may be subject to enforcement action for, any of a Class 1 misdemeanor. 18 violation of this chapter committed by the licensee's employee, agency, or clerk while 19 acting within the scope of employment or agency. 20 Section 9. That a NEW SECTION be added to a NEW CHAPTER in title 10: 21 19 A licensee shall post a sign within plain view of any area on the premises where an 22 individual nicotine product retailer may purchase nicotine products, stating in text, at least one inch in height, that 23 it is illegal to sell buy or receive nicotine products to any person under the age only from a nicotine 20 product distributor. A violation of twenty-one years. 24 Adjacent to the sign, the licensee shall display this section is a valid license issued under this 25 chapter. 26 Class 2 misdemeanor. 21 Section 10. That a NEW SECTION be added to a NEW CHAPTER in title 10: 27 22 A licensee shall keep complete records person who is engaged in the business of all selling or distributing nicotine products held 23 may not ship or transport, or cause to be shipped or transported, nicotine products directly 24 to any consumer in this state. This section applies regardless of whether the person 25 engaged in the licensee's 28 inventory and all business of selling or distributing nicotine products sold by the licensee, in a manner set forth in rules 29 promulgated by the secretary is located within or 26 outside of the Department of Revenue pursuant to chapter 1-26. 30 26.355.38 4 1220 Underscores indicate new language. Overstrikes indicate deleted language. The records must include information detailing source, origin, and manufacture of 1 the nicotine products in the licensee's inventory 2 The licensee shall preserve the records for at least three years. 3 If the records are not stored at the licensee's place of business, the licensee must, 4 upon request of the secretary, make the records available, in electronic form, within five 5 business days. 6 this state. 27 Section 11. That a NEW SECTION be added to a NEW CHAPTER in title 10: 7 28 26.355.39 4 1220 Underscores indicate new language. Overstrikes indicate deleted language. The secretary attorney general may bring a civil action in circuit court for any violation of 1 section 10 of this Act. In addition to injunctive or any other relief, the court may impose, 2 for a first violation of section 10 of this Act, a civil penalty in the amount of one thousand 3 dollars or five times the retail value of the Department nicotine products involved, whichever is greater. 4 A subsequent violation of Revenue section 10 of this Act is punishable by a civil penalty of five 5 thousand dollars or an agent five times the retail value of the secretary shall, 8 during normal business hours, inspect the records and premises of any licensee, and shall 9 conduct an investigation to determine whether the licensee has violated any provision of 10 this chapter or rule promulgated thereunder. The secretary or agent of the secretary shall 11 conduct an inspection or investigation under this section in accordance with rules 12 promulgated by the secretary pursuant to chapter 1-26. 13 nicotine products involved, whichever 6 is greater. 7 Section 12. That a NEW SECTION be added to a NEW CHAPTER in title 10: 14 Except as otherwise provided 8 Each shipment, transport, or attempted shipment or transport, of nicotine products 9 in this section, the secretary violation of the Department of 15 Revenue, or an agent of the secretary, shall conduct an inspection of each licensee at least 16 once a year. 17 If a licensee has been determined by the department to have violated any provision 18 section 10 of this chapter, the secretary or an agent of the secretary must conduct an inspection of 19 the licensee within six months of the determination. 20 Act constitutes a separate violation. 10 Section 13. That a NEW SECTION be added to a NEW CHAPTER in title 10: 21 The Department of Revenue shall publish on 11 Unless otherwise expressly provided, the department's website the following 22 information for each licensee: 23 (1) The licensee's name; 24 (2) The name penalties or remedies, or both, under 12 sections 11 and mailing address of the registered agent of the licensee; 25 (3) The physical address of the licensee's place of business; 26 (4) The registered agent; and 27 (5) The date on which the license was initially issued. 28 If a licensee is determined to have violated a provision 12 of this chapter or chapter 29 34-46, Act, inclusive, are in addition to any other penalties and 13 remedies available under any other law of this state. Nothing in sections 11 and 12 of this 14 Act, inclusive, prohibits the secretary collection of the department must publish notice any applicable tax against a person receiving 15 nicotine products in violation of the violation on the 30 department's website. 31 26.355.38 5 1220 Underscores indicate new language. Overstrikes indicate deleted language. this chapter. 16 Section 14. That a NEW SECTION be added to a NEW CHAPTER in title 10: 1 If a licensee is determined to have violated any provision of sections 7 to 11, 2 inclusive, of this Act or a provision of chapter 34-46, the secretary of the Department of 3 Revenue must assess a penalty according to the following schedule: 4 (1) For a first violation, a fine of five hundred dollars; 5 (2) For a second violation within a thirty-six-month period, a fine of one thousand 6 dollars; 7 (3) For a third violation within a thirty-six-month period, a fine of two thousand dollars, 8 and in addition to the fine assessed under this subdivision the licensee: 9 (a) Shall not sell, or offer to sell, a nicotine product for the following thirty days; 10 and 11 (b) Must post a sign adjacent to the sign required in section 9 of this Act, stating 12 in text at least one inch in height that due to a violation of state law, nicotine 13 products may not be sold at this location at this time; and 14 (4) For a fourth violation within a thirty-six-month period, a fine of five thousand five 15 hundred dollars, and in addition to the fine assessed under this subdivision, the 16 secretary shall revoke the license. 17 The secretary of the Department of Revenue may revoke or suspend a license 18 issued under this chapter for failure of the licensee to comply with a provision of this 19 chapter or rules promulgated thereunder, or if the licensee is convicted of a felony. 20 Section 15. That a NEW SECTION be added to a NEW CHAPTER in title 10: 21 A fine assessed under section 14 of this Act is due within thirty days of the 22 Department of Revenue providing notice of the fine to the licensee. 23 If the department determines that a licensee has failed to pay any fine, fee, or tax 24 imposed by this chapter, or any other fine, fee, or tax imposed by this state or a political 25 subdivision of this state by the due date, the secretary must suspend the license of the 26 retailer until the payment has been made. 27 Section 16. That a NEW SECTION be added to a NEW CHAPTER in title 10: 28 If the license of a retailer is revoked pursuant to section 14 of this Act, the retailer 29 must destroy all nicotine products possessed by the retailer, at the time of the revocation, 30 in accordance with all state and federal requirements related to hazardous materials. The 31 26.355.38 6 1220 Underscores indicate new language. Overstrikes indicate deleted language. retailer shall submit verification of the destruction to the Department of Revenue, in a 1 manner provided in rules promulgated by the secretary of the department. 2 A retailer who fails to comply with this section within seven days, or within the time 3 required by rules promulgated by the Department of Revenue, from the revocation of the 4 license is subject to a fine of five thousand dollars, imposed by the Department of 5 Revenue. 6 Section 17. That a NEW SECTION be added to a NEW CHAPTER in title 10: 7 If a licensee is determined to have violated any provision of this chapter, the 8 licensee may appeal an action or decision of the secretary of the Department of Revenue, 9 in the same manner as provided in chapter 1-26. 10 Section 18. That a NEW SECTION be added to a NEW CHAPTER in title 10: 11 Prior to January 1, 2027, the Department of Revenue shall promulgate rules, in 12 accordance with chapter 1-26, to: 13 (1) Establish a procedure for an initial and a renewal license application under this 14 chapter; 15 (2) Provide for the manner in which nicotine products must be destroyed and the 16 manner in which verification of the destruction must be submitted; 17 (3) Provide the process for assessing and collecting fines under this chapter; 18 (4) Establish standards for the keeping of records, as required in section 10 of this Act; 19 and 20 (5) Establish a process for the inspection of records and premises, as authorized in 21 section 11 of this Act. 22 Section 19. That a NEW SECTION be added to a NEW CHAPTER in title 10: 23 A retailer who sells a nicotine product in this state, without a license issued 24 pursuant to this chapter, is subject to a fine of five thousand dollars, per day, imposed by 25 the Department of Revenue. 26 Section 20. That a NEW SECTION be added to a NEW CHAPTER in title 10: 27 There is created a nicotine enforcement fund. The Department of Revenue shall 28 18 administer the fund. The purpose of the fund is to defray expenses associated with the 29 19 enforcement of this chapter. 30 26.355.38 7 1220 Underscores indicate new language. Overstrikes indicate deleted language. 20 Moneys collected under this Act must be forwarded to the state treasurer to be 1 21 deposited into the fund. Interest on moneys credited to the fund must remain in the fund. 2 The nicotine enforcement 22 Expenditures from the fund is continuously appropriated to must be budgeted through the Department of 3 Revenue. 4 Section 21. That § 34-46-2 be AMENDED: 5 34-46-2. The following actions are unlawful: 6 (1) To knowingly sell or distribute a tobacco product to a person under the age of 7 twenty-one; 8 (2) To purchase or attempt to purchase, to receive or attempt to receive, to possess, 9 or to consume a tobacco product if a person is under the age of twenty-one; 10 (3) To purchase a tobacco product on behalf of, or to give a tobacco product to, any 11 person under the age of twenty-one; 12 (4)(3) To sell cigarettes other than in an unopened package originating with the 13 manufacturer and depicting the warning labels required by federal law; 14 (5)(4) To sell tobacco products or nicotine products, as defined in section 2 of this Act, 15 through a vending machine located in a place other than a place that is open to 16 the public but to which persons under the age of twenty-one are denied access at 17 all times; 18 (6)(5) To sell cigarettes or smokeless tobacco, or both, tobacco products or nicotine 19 products, as defined in section 2 of this Act, through a self-service displayother 20 than a display that is: 21 (a) A vending machine permitted under subdivision (5) of this section; or 22 (b) Located in a tobacco speciality store; or general appropriation 23 (7)(6) To distribute tobacco product samples products or nicotine products, as defined in bill. 24 section 2 of this Act, in or on a public street, sidewalk, or park that is within five 25 hundred feet of a playground, school, or other facility when the facility is being 26 used primarily by persons under the age of twenty-one. 27 A person who violates this section is subject to a fine of five thousand dollars, 28 imposed by the Department of Revenue. A person is not liable for more than one violation 29 of this section on a single day. 30 Section 22. That § 34-46-2.2 be AMENDED: 31 26.355.38 8 1220 Underscores indicate new language. Overstrikes indicate deleted language. 34-46-2.2. A merchant shall conspicuously post a notice, on the merchant's 1 premises, stating that "No no person under the age of 21twenty-one may be sold tobacco 2 products nicotine products, as defined in section 2 of this Act." 3 Any owner, lessee, or person having control of any cigarette vending machine shall 4 post, in a conspicuous place on each machine in use within the state, a warning which 5 shall be printed in bold type letters each of which shall be at least one-half inch high and 6 which shall be kept in easily legible form and repair stating: 7 "Any person under 21 years of age is forbidden by law to purchase cigarettes from 8 this machine." 9 Section 23. That § 34-46-21 be AMENDED: 10 34-46-21. No person may sell a vapor product other than in an unopened package 11 originating with the manufacturer and depicting the warning labels required by federal 12 law, or sell a vapor product through self-service display other than a display that is: 13 (1) A vending machine permitted under subdivision 34-46-2(5); or 14 (2) Located located in a tobacco specialty store. 15 A violation of person who violates this section is a Class 2 misdemeanor subject to 16 a fine of five thousand dollars, imposed by the Department of Revenue. A person is not 17 liable for more than one violation of this section on a single day. 18

26.355.39 26.355.40 101st Legislative Session 1220 2026 South Dakota Legislature House Bill 1220 HOUSE SENATE HEALTH AND HUMAN SERVICES ENGROSSED This bill has been extensively amended (hoghoused) and may no longer be consistent with the original intention of the sponsor. Introduced by: Representative Mulder Underscores indicate new language. Overstrikes indicate deleted language. An Act to regulate the sale of nicotine products, and to provide a penalty therefor. 1 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA: 2 Section 1. That § 10-1-28.2 be AMENDED: 3 10-1-28.2. All lists of taxpayers, licensees, or applicants compiled by the 4 Department of Revenue are confidential except licensees which were licensed under the 5 provisions of chapter 10-47B, 32-6B, 32-6C, 32-7A, or 32-7B, or sections 3 to 14, 6 inclusive, of this Act. It is a Class 2 misdemeanor to disclose any such list except to the 7 extent necessary to carry out the official duties of the department. 8 Section 2. That § 10-50-11 be AMENDED: 9 10-50-11. Each application for a distributor or wholesaler license shall be 10 accompanied by a fee of one hundred fifty one thousand dollars. If the applicant for a 11 license has not entered upon the business of selling cigarettes or tobacco products until 12 after the first day of January in any year, then the fee for a license during the remainder 13 of the fiscal year is one-half the amount set forth in this section. 14 Notwithstanding the provisions of § 10-50-52, the fees collected under this section 15 must be deposited in the nicotine enforcement fund established in section 14 of this Act. 16 Section 3. That a NEW SECTION be added to a NEW CHAPTER in title 10: 15 17 Terms used in this chapter mean: 16 18 (1) "Alternative nicotine product," a noncombustible product containing nicotine from 19 any source or a nicotine analog that is intended for human consumption, whether 20 chewed, absorbed, dissolved, ingested, inhaled, or consumed by any other means. 21 The term does not include any vapor product, tobacco product, or any product 22 regulated as a drug, food, or device by the United States Food and Drug 23 26.355.40 2 1220 Underscores indicate new language. Overstrikes indicate deleted language. Administration under the Food, Drug and Cosmetic Act, 21 U.S.C chapter 9 1 subchapter V (January 1, 2026); 2 (2) "Distributor," a person engaged in the business of selling or otherwise providing a 3 nicotine product for 17 resale; 18 (2) resale, to a retailer for sale to a consumer; 4 (3) "Licensee," a person licensed under the provisions of this chapter; 19 (3) 5 (4) "Nicotine analog," a substance that: 6 (a) Has a chemical structure substantially similar to the chemical structure of 7 nicotine; 8 (b) Has, or is represented to have, an effect on the central nervous system 9 similar to the chemical nicotine; or 10 (c) Is manufactured, formulated, sold, distributed, or marketed with the intent 11 to avoid provisions of this chapter; 12 (5) "Nicotine product," a an alternative nicotine product intended for human consumption, containing any 20 form of the chemical nicotine, including any sale or complex, from any source, 21 nicotinic alkaloids, nicotine analogs, vapor product, and any substance intended to mimic or 22 replicate the pharmacological effect of nicotine. The term includes components, 23 parts, or accessories. The term does not 13 include drugs, devices, or combination 24 26.355.39 2 1220 Underscores indicate new language. Overstrikes indicate deleted language. products, as defined in the Federal Food, Drug, and Cosmetic Act, approved for 1 sale by the United States Food and Drug Administration. 2 Any communication by, or on behalf of, the manufacturer distributor, or retailer of 3 a tobacco product that indicates that the product contains a nicotine analog 4 constitutes presumptive evidence that the product contains a nicotine analog; and 5 (4) as defined by § 10-50-1 or cigarettes; 14 (6) "Retailer," a person engaged in the business of selling a nicotine product to an 6 15 individual for any purpose other than resale. 7 resale; and 16 (7) "Vapor product," a noncombustible product containing nicotine or a nicotine analog 17 that employs a heating element, power source, electronic circuit, or other 18 electronic, chemical, or mechanical means, regardless of shape or size, which can 19 be used to produce vapor or aerosol from nicotine or a nicotine analog in a solution. 20 The term includes, but is not limited to, any electronic cigarette, electronic cigar, 21 electronic cigarillo, electronic pipe, or similar product or device, and a consumable 22 nicotine or nicotine analog solution suitable for use in such a device or a vapor 23 product, and any component or part, whether sold with the device or separately. 24 The term does not include any product approved by the United States Food and 25 Drug Administration for sale as a tobacco cessation product and marketed and sold 26 solely for that purpose. 27 Section 4. That a NEW SECTION be added to a NEW CHAPTER in title 10: 8 28 A person, except a licensed distributor or licensed wholesaler under chapter 10-9 10-29 50, shall secure a license pursuant to this chapter, prior to selling nicotine products in this 10 30 state for resale. If a person owns or operates more than one place of business selling 11 31 nicotine products for resale, the person must secure a separate license for each place of 12 32 business selling nicotine products. 13 33 26.355.40 3 1220 Underscores indicate new language. Overstrikes indicate deleted language. Section 5. That a NEW SECTION be added to a NEW CHAPTER in title 10: 14 1 A person located within or outside of this state is eligible for a nicotine product 15 2 distributor license. To receive an initial or renewal nicotine product distributor license, an 16 3 applicant shall: 17 4 (1) File an application with the department on a form prescribed by the secretary; 18 5 (2) Pay a license fee of one thousand dollars; 19 6 (3) Hold a South Dakota sales and use tax license issued by the department; and 20 7 (4) Be current on the remittance of all applicable state and local taxes. 21 8 The department shall issue a nicotine product distributor license to any applicant 22 9 who meets the requirements of this chapter. 23 10 All moneys collected by the department under this section must be forwarded to 24 11 the state treasurer for deposit in the nicotine enforcement fund established under section 25 12 14 of this Act. 26 13 Section 6. That a NEW SECTION be added to a NEW CHAPTER in title 10: 27 14 Unless otherwise provided in this section, a nicotine product distributor license is 28 15 valid from July first through June thirtieth. A license is valid for an additional three days if 29 16 an application for a new license is in the possession of the department before midnight on 30 17 the thirtieth day of June when the license expires. 31 26.355.39 3 1220 Underscores indicate new language. Overstrikes indicate deleted language. 18 Section 7. That a NEW SECTION be added to a NEW CHAPTER in title 10: 1 A nicotine product distributor shall maintain, for at least three years, all 2 documentation detailing the manufacturer, address of the manufacturer, ingredients, and 3 sales, of all nicotine products. A nicotine product distributor shall submit to an inspection 4 of inventory, products, and documentation, and shall provide a copy of the documentation 5 to the department, upon request. 6 A violation of this section is a Class 2 misdemeanor. 7 Section 8. That a NEW SECTION be added to a NEW CHAPTER in title 10: 8 The secretary may revoke a nicotine product distributor license or the registration 9 of any nicotine product retailer for failure to comply with any provision of state law. 10 A person aggrieved by the revocation may, in writing, request a contested case 11 hearing before the secretary. The request must be received by the department within 12 fourteen days from the date the notice of revocation was mailed to the licensee by certified 13 mail. If a request for a hearing is not received by the department within the time 14 prescribed, the revocation becomes final. Any hearing must be conducted, and any appeal 15 must be taken, pursuant to the provisions of chapters 1-26 and 1-26D. 16 A person who sells nicotine products without a valid license or registration is guilty 17 of a Class 1 misdemeanor. 18 Section 9. That a NEW SECTION be added to a NEW CHAPTER in title 10: 19 A nicotine product distributor shall maintain, for at least three years, all 20 documentation detailing the manufacturer, address of the manufacturer, and sales, of all 21 nicotine products. A nicotine product distributor shall submit to an inspection of inventory, 22 products, and documentation, and shall provide a copy of the documentation to the 23 department, upon request. 24 A violation of this section is a Class 2 misdemeanor. 25 Section 8. That a NEW SECTION be added to a NEW CHAPTER in title 10: 26 The secretary may revoke a nicotine product distributor license for failure to comply 27 with any provision of state law. 28 A person aggrieved by the revocation may, in writing, request a contested case 29 hearing before the secretary. The request must be received by the department within 30 fourteen days from the date the notice of revocation was mailed to the licensee by certified 31 26.355.40 4 1220 Underscores indicate new language. Overstrikes indicate deleted language. mail. If a request for a hearing is not received by the department within the time 1 prescribed, the revocation becomes final. Any hearing must be conducted, and any appeal 2 must be taken, pursuant to the provisions of chapters 1-26 and 1-26D. 3 A person who sells nicotine products without a valid license or registration is guilty 4 of a Class 1 misdemeanor. 5 Section 9. That a NEW SECTION be added to a NEW CHAPTER in title 10: 6 A nicotine product retailer may buy or receive nicotine products only from a nicotine 20 7 product distributor. distributor, or a licensed distributor or licensed wholesaler under chapter 10-50. 8 A violation of this section is a Class 2 misdemeanor. 21 9 Section 10. That a NEW SECTION be added to a NEW CHAPTER in title 10: 22 10 A person who is engaged in the business of selling or distributing nicotine products 23 11 may not ship or transport, or cause to be shipped or transported, nicotine products directly 24 12 to any consumer in this state. state, except as provided in this section or in chapter 10-50C. 13 This section applies regardless of whether the person 25 engaged in the business of selling 14 or distributing nicotine products is located within or 26 outside of this state. 15 A person may ship or transport, or cause to be shipped or transported, alternative 16 nicotine products directly to any consumer in this state if: 17 (1) Prior to sale of the alternative nicotine product to the purchaser, the seller verifies 18 that the purchaser is at least twenty-one years of age through a commercially 19 available database, or aggregate of databases, that is regularly used by 20 government and businesses for the purpose of age and identity verification, or by 21 obtaining a copy of a valid government-issued document that provides the name, 22 address, and date of birth of the purchaser; 23 (2) Prior to shipping or sending the purchased products, the seller has received 24 payment for the sale from the purchaser by a credit card or debit card issued in 25 the purchaser's name, or by a check that is associated with a bank account in the 26 purchaser's name and the name matches the name of the purchaser whose age 27 was verified under subdivision (1); 28 (3) The seller uses a method of mailing, shipping, or delivery that requires the 29 signature of a person who is at least twenty-one years of age before the package 30 is released to the purchaser; and 31 (4) The seller holds a South Dakota sales and use tax license issued by the Department 32 of Revenue. 33 26.355.40 5 1220 Underscores indicate new language. Overstrikes indicate deleted language. Section 11. That a NEW SECTION be added to a NEW CHAPTER in title 10: 28 26.355.39 4 1220 Underscores indicate new language. Overstrikes indicate deleted language. 1 The attorney general may bring a civil action in circuit court for any violation of 1 2 section 10 of this Act. In addition to injunctive or any other relief, the court may impose, 2 3 for a first violation of section 10 of this Act, a civil penalty in the amount of one thousand 3 4 dollars or five times the retail value of the nicotine products involved, whichever is greater. 4 5 A subsequent violation of section 10 of this Act is punishable by a civil penalty of five 5 6 thousand dollars or five times the retail value of the nicotine products involved, whichever 6 7 is greater. 7 8 Section 12. That a NEW SECTION be added to a NEW CHAPTER in title 10: 8 9 Each shipment, transport, or attempted shipment or transport, of nicotine products 9 10 in violation of section 10 of this Act constitutes a separate violation. 10 11 Section 13. That a NEW SECTION be added to a NEW CHAPTER in title 10: 11 12 Unless otherwise expressly provided, the penalties or remedies, or both, under 12 13 sections 11 and 12 of this Act, inclusive, are in addition to any other penalties and 13 14 remedies available under any other law of this state. Nothing in sections 11 and 12 of this 14 15 Act, inclusive, prohibits the collection of any applicable tax against a person receiving 15 16 nicotine products in violation of this chapter. 16 17 Section 14. That a NEW SECTION be added to a NEW CHAPTER in title 10: 17 18 There is created a nicotine enforcement fund. The Department of Revenue shall 18 19 administer the fund. The purpose of the fund is to defray expenses associated with the 19 20 enforcement of this chapter. 20 21 Moneys collected under this Act must be forwarded to the state treasurer to be 21 22 deposited into the fund. Interest on moneys credited to the fund must remain in the fund. 22 23 Expenditures from the fund must be budgeted through the general appropriation 23 24 bill. 24 25

26.355.40 26.355.41 101st Legislative Session 1220 2026 South Dakota Legislature House Bill 1220 SENATE HEALTH AND HUMAN SERVICES ENGROSSED This bill has been extensively amended (hoghoused) and may no longer be consistent with the original intention of the sponsor. Introduced by: Representative Mulder Underscores indicate new language. Overstrikes indicate deleted language. An Act to regulate the sale of nicotine products, and to provide a penalty therefor. 1 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA: 2 Section 1. That § 10-1-28.2 be AMENDED: 3 10-1-28.2. All lists of taxpayers, licensees, or applicants compiled by the 4 Department of Revenue are confidential except licensees which were licensed under the 5 provisions of chapter 10-47B, 32-6B, 32-6C, 32-7A, or 32-7B, or sections 3 to 14, 6 inclusive, of this Act. It is a Class 2 misdemeanor to disclose any such list except to the 7 extent necessary to carry out the official duties of the department. 8 Section 2. That § 10-50-11 be AMENDED: 9 10-50-11. Each application for a distributor or wholesaler license shall be 10 accompanied by a fee of one hundred fifty one thousand dollars. If the applicant for a 11 license has not entered upon the business of selling cigarettes or tobacco products until 12 after the first day of January in any year, then the fee for a license during the remainder 13 of the fiscal year is one-half the amount set forth in this section. 14 Notwithstanding the provisions of § 10-50-52, the fees collected under this section 15 must be deposited in the nicotine enforcement fund established in section 14 of this Act. 16 Section 3. That a NEW SECTION be added to a NEW CHAPTER in title 10: 17 Terms used in this chapter mean: 18 (1) "Alternative nicotine product," a noncombustible product containing nicotine from 19 any source or a nicotine analog that is intended for human consumption, whether 20 chewed, absorbed, dissolved, ingested, inhaled, or consumed by any other means. 21 The term does not include any vapor product, tobacco product, or any product 22 regulated as a drug, food, or device by the United States Food and Drug 23 26.355.40 26.355.41 2 1220 Underscores indicate new language. Overstrikes indicate deleted language. Administration under the Food, Drug and Cosmetic Act, 21 U.S.C chapter 9 1 subchapter V (January 1, 2026); 2 (2) "Distributor," a person engaged in the business of selling or otherwise providing a 3 nicotine product for resale, to a retailer for sale to a consumer; 4 (3) "Licensee," a person licensed under the provisions of this chapter; 5 (4) "Nicotine analog," a substance that: 6 (a) Has a chemical structure substantially similar to the chemical structure of 7 nicotine; 8 (b) Has, or is represented to have, an effect on the central nervous system 9 similar to the chemical nicotine; or 10 (c) Is manufactured, formulated, sold, distributed, or marketed with the intent 11 to avoid provisions of this chapter; 12 (5) "Nicotine product," an alternative nicotine product or vapor product, and does not 13 include a tobacco product as defined by § 10-50-1 or cigarettes; 14 (6) "Retailer," a person engaged in the business of selling a nicotine product to an 15 individual for any purpose other than resale; and 16 (7) "Vapor product," a noncombustible product containing nicotine or a nicotine analog 17 that employs a heating element, power source, electronic circuit, or other 18 electronic, chemical, or mechanical means, regardless of shape or size, which can 19 be used to produce vapor or aerosol from nicotine or a nicotine analog in a solution. 20 The term includes, but is not limited to, any electronic cigarette, electronic cigar, 21 electronic cigarillo, electronic pipe, or similar product or device, and a consumable 22 nicotine or nicotine analog solution suitable for use in such a device or a vapor 23 product, and any component or part, whether sold with the device or separately. 24 The term does not include any product approved by the United States Food and 25 Drug Administration for sale as a tobacco cessation product and marketed and sold 26 solely for that purpose. 27 Section 4. That a NEW SECTION be added to a NEW CHAPTER in title 10: 28 A person, except a licensed distributor or licensed wholesaler under chapter 10-29 50, shall secure a license pursuant to this chapter, prior to selling nicotine products in this 30 state for resale. If a person owns or operates more than one place of business selling 31 nicotine products for resale, the person must secure a separate license for each place of 32 business selling nicotine products. 33 26.355.40 26.355.41 3 1220 Underscores indicate new language. Overstrikes indicate deleted language. Section 5. That a NEW SECTION be added to a NEW CHAPTER in title 10: 1 A person located within or outside of this state is eligible for a nicotine product 2 distributor license. To receive an initial or renewal nicotine product distributor license, an 3 applicant shall: 4 (1) File an application with the department on a form prescribed by the secretary; 5 (2) Pay a license fee of one thousand dollars; 6 (3) Hold a South Dakota sales and use tax license issued by the department; and 7 (4) Be current on the remittance of all applicable state and local taxes. 8 The department shall issue a nicotine product distributor license to any applicant 9 who meets the requirements of this chapter. 10 All moneys collected by the department under this section must be forwarded to 11 the state treasurer for deposit in the nicotine enforcement fund established under section 12 14 of this Act. 13 Section 6. That a NEW SECTION be added to a NEW CHAPTER in title 10: 14 Unless otherwise provided in this section, a nicotine product distributor license is 15 valid from July first through June thirtieth. A license is valid for an additional three days if 16 an application for a new license is in the possession of the department before midnight on 17 the thirtieth day of June when the license expires. 18 Section 7. That a NEW SECTION be added to a NEW CHAPTER in title 10: 19 A nicotine product distributor shall maintain, for at least three years, all 20 documentation detailing the manufacturer, address of the manufacturer, and sales, of all 21 nicotine products. A nicotine product distributor shall submit to an inspection of inventory, 22 products, and documentation, and shall provide a copy of the documentation to the 23 department, upon request. 24 A violation of this section is a Class 2 misdemeanor. 25 Section 8. That a NEW SECTION be added to a NEW CHAPTER in title 10: 26 The secretary may revoke a nicotine product distributor license for failure to comply 27 with any provision of state law. 28 A person aggrieved by the revocation may, in writing, request a contested case 29 hearing before the secretary. The request must be received by the department within 30 fourteen days from the date the notice of revocation was mailed to the licensee by certified 31 26.355.40 26.355.41 4 1220 Underscores indicate new language. Overstrikes indicate deleted language. mail. If a request for a hearing is not received by the department within the time 1 prescribed, the revocation becomes final. Any hearing must be conducted, and any appeal 2 must be taken, pursuant to the provisions of chapters 1-26 and 1-26D. 3 A person who sells nicotine products without a valid license or registration is guilty 4 of a Class 1 misdemeanor. 5 Section 9. That a NEW SECTION be added to a NEW CHAPTER in title 10: 6 A nicotine product retailer may buy or receive nicotine products only from a nicotine 7 product distributor, licensee, or a licensed distributor or licensed wholesaler under chapter 10-50. 8 A violation 8 of this section is a Class 2 misdemeanor. 9 Section 10. That a NEW SECTION be added to a NEW CHAPTER in title 10: 10 A person who is engaged in the business of selling or distributing nicotine products 11 may not ship or transport, or cause to be shipped or transported, nicotine products directly 12 to any consumer in this state, except as provided in this section or in chapter 10-50C. 13 This section applies regardless of whether the person engaged in the business of selling 14 or distributing nicotine products is located within or outside of this state. 15 A person licensed under this chapter or licensed as a distributor or wholesaler under 16 chapter 10-50, may ship or transport, or cause to be shipped or transported, alternative 16 17 nicotine products directly to any consumer in this state if: 17 18 (1) Prior to sale of the alternative nicotine product to the purchaser, the seller person verifies 18 19 that the purchaser is at least twenty-one years of age through a commercially 19 20 available database, or aggregate of databases, that is regularly used by 20 21 government and businesses for the purpose of age and identity verification, or by 21 22 obtaining a copy of a valid government-issued document that provides the name, 22 23 address, and date of birth of the purchaser; 23 24 (2) Prior to shipping or sending the purchased products, the seller person has received 24 25 payment for the sale from the purchaser by a credit card or debit card issued in 25 26 the purchaser's name, or by a check that is associated with a bank account in the 26 27 purchaser's name and the name matches the name of the purchaser whose age 27 28 was verified under subdivision (1); 28 29 (3) The seller person uses a method of mailing, shipping, or delivery that requires the 29 30 signature of a person who is at least twenty-one years of age before the package 30 31 is released to the purchaser; and 31 32 26.355.41 5 1220 Underscores indicate new language. Overstrikes indicate deleted language. (4) The seller person holds a South Dakota sales and use tax license issued by the 1 Department 32 of Revenue. 33 26.355.40 Revenue; 2 (5) The person conspicuously labels each package to be shipped or transported, 3 indicating the package contains an alternative nicotine product and that the 4 signature of an individual who is at least twenty-one years of age is required before 5 1220 Underscores indicate new language. Overstrikes indicate deleted language. the package is released to the purchaser; 6 (6) The person maintains a record of the name, address, date of birth, and telephone 7 number or email, of the purchaser; 8 (7) The person remits all applicable taxes for the alternative nicotine product; and 9 (8) The alternative nicotine product is not being provided for purposes of resale to 10 consumer. 11 A person shipping or transporting an alternative nicotine product shall allow the 12 Department of Revenue to conduct an audit of the records pertaining to shipping or 13 transporting an alternative nicotine product, including the records used to verify the age 14 of the purchaser. The person shall provide copies of the records to the department upon 15 request. 16 Section 11. That a NEW SECTION be added to a NEW CHAPTER in title 10: 1 17 The attorney general may bring a civil action in circuit court for any violation of 2 18 section 10 of this Act. In addition to injunctive or any other relief, the court may impose, 3 19 for a first violation of section 10 of this Act, a civil penalty in the amount of one thousand 4 20 dollars or five times the retail value of the nicotine products involved, whichever is greater. 5 21 A subsequent violation of section 10 of this Act is punishable by a civil penalty of five 6 22 thousand dollars or five times the retail value of the nicotine products involved, whichever 7 23 is greater. 8 24 Section 12. That a NEW SECTION be added to a NEW CHAPTER in title 10: 9 25 Each shipment, transport, or attempted shipment or transport, of nicotine products 10 26 in violation of section 10 of this Act constitutes a separate violation. 11 27 Section 13. That a NEW SECTION be added to a NEW CHAPTER in title 10: 12 28 Unless otherwise expressly provided, the penalties or remedies, or both, under 13 29 sections 11 and 12 of this Act, inclusive, are in addition to any other penalties and 14 30 remedies available under any other law of this state. Nothing in sections 11 and 12 of this 15 31 26.355.41 6 1220 Underscores indicate new language. Overstrikes indicate deleted language. Act, inclusive, prohibits the collection of any applicable tax against a person receiving 16 1 nicotine products in violation of this chapter. 17 2 Section 14. That a NEW SECTION be added to a NEW CHAPTER in title 10: 18 3 There is created a nicotine enforcement fund. The Department of Revenue shall 19 4 administer the fund. The purpose of the fund is to defray expenses associated with the 20 5 enforcement of this chapter. 21 6 Moneys collected under this Act must be forwarded to the state treasurer to be 22 7 deposited into the fund. Interest on moneys credited to the fund must remain in the fund. 23 8 Expenditures from the fund must be budgeted through the general appropriation 24 9 bill. 25 10 Section 15. That a NEW SECTION be added to a NEW CHAPTER in title 10: 11 An alternative nicotine product shipped or transported under section 10 of this Act 12 is only for personal use and may not be resold. A violation of this section is a Class 1 13 misdemeanor. 14

26.355.41 26.355.42 101st Legislative Session 1220 2026 South Dakota Legislature House Bill 1220 SENATE ENGROSSED This bill has been extensively amended (hoghoused) and may no longer be consistent with the original intention of the sponsor. Introduced by: Representative Mulder Underscores indicate new language. Overstrikes indicate deleted language. ENROLLED AN ACT ENTITLED An Act to regulate the sale of nicotine products, and to provide a penalty therefor. 1 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA: 2 Section 1. That § 10-1-28.2 be AMENDED: 3 10-1-28.2. All lists of taxpayers, licensees, or applicants compiled by the 4 Department of Revenue are confidential except licensees which were licensed under the 5 provisions of chapter 10-47B, 32-6B, 32-6C, 32-7A, or 32-7B, or sections 3 to 14, 6 inclusive, of this Act. It is a Class 2 misdemeanor to disclose any such list except to the 7 extent necessary to carry out the official duties of the department. 8 Section 2. That § 10-50-11 be AMENDED: 9 10-50-11. Each application for a distributor or wholesaler license shall be 10 accompanied by a fee of one hundred fifty one thousand dollars. If the applicant for a 11 license has not entered upon the business of selling cigarettes or tobacco products until 12 after the first day of January in any year, then the fee for a license during the remainder 13 of the fiscal year is one-half the amount set forth in this section. 14 Notwithstanding the provisions of § 10-50-52, the fees collected under this section 15 must be deposited in the nicotine enforcement fund established in section 14 of this Act. 16 Section 3. That a NEW SECTION be added to a NEW CHAPTER in title 10: 17 Terms used in this chapter mean: 18 (1) "Alternative nicotine product," a noncombustible product containing nicotine from 19 any source or a nicotine analog that is intended for human consumption, whether 20 chewed, absorbed, dissolved, ingested, inhaled, or consumed by any other means. 21 The term does not include any vapor product, tobacco product, or any product 22 regulated as a drug, food, or device by the United States Food and Drug 23 26.355.41 26.355.42 2 1220 Underscores indicate new language. Overstrikes indicate deleted language. HB1220 ENROLLED Administration under the Food, Drug and Cosmetic Act, 21 U.S.C chapter 9 1 subchapter V (January 1, 2026); 2 (2) "Distributor," a person engaged in the business of selling or otherwise providing a 3 nicotine product to a retailer for sale to a consumer; 4 (3) "Licensee," a person licensed under the provisions of this chapter; 5 (4) "Nicotine analog," a substance that: 6 (a) Has a chemical structure substantially similar to the chemical structure of 7 nicotine; 8 (b) Has, or is represented to have, an effect on the central nervous system 9 similar to the chemical nicotine; or 10 (c) Is manufactured, formulated, sold, distributed, or marketed with the intent 11 to avoid provisions of this chapter; 12 (5) "Nicotine product," an alternative nicotine product or vapor product, and does not 13 include a tobacco product as defined by § 10-50-1 or cigarettes; 14 (6) "Retailer," a person engaged in the business of selling a nicotine product to an 15 individual for any purpose other than resale; and 16 (7) "Vapor product," a noncombustible product containing nicotine or a nicotine analog 17 that employs a heating element, power source, electronic circuit, or other 18 electronic, chemical, or mechanical means, regardless of shape or size, which can 19 be used to produce vapor or aerosol from nicotine or a nicotine analog in a solution. 20 The term includes, but is not limited to, any electronic cigarette, electronic cigar, 21 electronic cigarillo, electronic pipe, or similar product or device, and a consumable 22 nicotine or nicotine analog solution suitable for use in such a device or a vapor 23 product, and any component or part, whether sold with the device or separately. 24 The term does not include any product approved by the United States Food and 25 Drug Administration for sale as a tobacco cessation product and marketed and sold 26 solely for that purpose. 27 Section 4. That a NEW SECTION be added to a NEW CHAPTER in title 10: 28 A person, except a licensed distributor or licensed wholesaler under chapter 10-29 50, 10-50, shall secure a license pursuant to this chapter, prior to selling nicotine products in this 30 state for resale. If a person owns or operates more than one place of business selling 31 nicotine products for resale, the person must secure a separate license for each place of 32 business selling nicotine products. 33 26.355.41 26.355.42 3 1220 Underscores indicate new language. Overstrikes indicate deleted language. HB1220 ENROLLED Section 5. That a NEW SECTION be added to a NEW CHAPTER in title 10: 1 A person located within or outside of this state is eligible for a nicotine product 2 distributor license. To receive an initial or renewal nicotine product distributor license, an 3 applicant shall: 4 (1) File an application with the department on a form prescribed by the secretary; 5 (2) Pay a license fee of one thousand dollars; 6 (3) Hold a South Dakota sales and use tax license issued by the department; and 7 (4) Be current on the remittance of all applicable state and local taxes. 8 The department shall issue a nicotine product distributor license to any applicant 9 who meets the requirements of this chapter. 10 All moneys collected by the department under this section must be forwarded to 11 the state treasurer for deposit in the nicotine enforcement fund established under section 12 14 of this Act. 13 Section 6. That a NEW SECTION be added to a NEW CHAPTER in title 10: 14 Unless otherwise provided in this section, a nicotine product distributor license is 15 valid from July first through June thirtieth. A license is valid for an additional three days if 16 an application for a new license is in the possession of the department before midnight on 17 the thirtieth day of June when the license expires. 18 Section 7. That a NEW SECTION be added to a NEW CHAPTER in title 10: 19 A nicotine product distributor shall maintain, for at least three years, all 20 documentation detailing the manufacturer, address of the manufacturer, and sales, of all 21 nicotine products. A nicotine product distributor shall submit to an inspection of inventory, 22 products, and documentation, and shall provide a copy of the documentation to the 23 department, upon request. 24 A violation of this section is a Class 2 misdemeanor. 25 Section 8. That a NEW SECTION be added to a NEW CHAPTER in title 10: 26 The secretary may revoke a nicotine product distributor license for failure to comply 27 with any provision of state law. 28 A person aggrieved by the revocation may, in writing, request a contested case 29 hearing before the secretary. The request must be received by the department within 30 fourteen days from the date the notice of revocation was mailed to the licensee by certified 31 26.355.41 26.355.42 4 1220 Underscores indicate new language. Overstrikes indicate deleted language. HB1220 ENROLLED mail. If a request for a hearing is not received by the department within the time 1 prescribed, the revocation becomes final. Any hearing must be conducted, and any appeal 2 must be taken, pursuant to the provisions of chapters 1-26 and 1-26D. 3 A person who sells nicotine products without a valid license or registration is guilty 4 of a Class 1 misdemeanor. 5 Section 9. That a NEW SECTION be added to a NEW CHAPTER in title 10: 6 A nicotine product retailer may buy or receive nicotine products only from a 7 licensee, or a licensed distributor or licensed wholesaler under chapter 10-50. A violation 8 of this section is a Class 2 misdemeanor. 9 Section 10. That a NEW SECTION be added to a NEW CHAPTER in title 10: 10 A person who is engaged in the business of selling or distributing nicotine products 11 may not ship or transport, or cause to be shipped or transported, nicotine products directly 12 to any consumer in this state, except as provided in this section or in chapter 10-50C. 13 This section applies regardless of whether the person engaged in the business of selling 14 or distributing nicotine products is located within or outside of this state. 15 A person licensed under this chapter or licensed as a distributor or wholesaler under 16 chapter 10-50, may ship or transport, or cause to be shipped or transported, alternative 17 nicotine products directly to any consumer in this state if: 18 (1) Prior to sale of the alternative nicotine product to the purchaser, the person verifies 19 that the purchaser is at least twenty-one years of age through a commercially 20 available database, or aggregate of databases, that is regularly used by 21 government and businesses for the purpose of age and identity verification, or by 22 obtaining a copy of a valid government-issued document that provides the name, 23 address, and date of birth of the purchaser; 24 (2) Prior to shipping or sending the purchased products, the person has received 25 payment for the sale from the purchaser by a credit card or debit card issued in 26 the purchaser's name, or by a check that is associated with a bank account in the 27 purchaser's name and the name matches the name of the purchaser whose age 28 was verified under subdivision (1); 29 (3) The person uses a method of mailing, shipping, or delivery that requires the 30 signature of a person who is at least twenty-one years of age before the package 31 is released to the purchaser; 32 26.355.41 26.355.42 5 1220 Underscores indicate new language. Overstrikes indicate deleted language. HB1220 ENROLLED (4) The person holds a South Dakota sales and use tax license issued by the 1 Department of Revenue; 2 (5) The person conspicuously labels each package to be shipped or transported, 3 indicating the package contains an alternative nicotine product and that the 4 signature of an individual who is at least twenty-one years of age is required before 5 the package is released to the purchaser; 6 (6) The person maintains a record of the name, address, date of birth, and telephone 7 number or email, of the purchaser; 8 (7) The person remits all applicable taxes for the alternative nicotine product; and 9 (8) The alternative nicotine product is not being provided for purposes of resale to 10 consumer. 11 A person shipping or transporting an alternative nicotine product shall allow the 12 Department of Revenue to conduct an audit of the records pertaining to shipping or 13 transporting an alternative nicotine product, including the records used to verify the age 14 of the purchaser. The person shall provide copies of the records to the department upon 15 request. 16 Section 11. That a NEW SECTION be added to a NEW CHAPTER in title 10: 17 The attorney general may bring a civil action in circuit court for any violation of 18 section 10 of this Act. In addition to injunctive or any other relief, the court may impose, 19 for a first violation of section 10 of this Act, a civil penalty in the amount of one thousand 20 dollars or five times the retail value of the nicotine products involved, whichever is greater. 21 A subsequent violation of section 10 of this Act is punishable by a civil penalty of five 22 thousand dollars or five times the retail value of the nicotine products involved, whichever 23 is greater. 24 Section 12. That a NEW SECTION be added to a NEW CHAPTER in title 10: 25 Each shipment, transport, or attempted shipment or transport, of nicotine products 26 in violation of section 10 of this Act constitutes a separate violation. 27 Section 13. That a NEW SECTION be added to a NEW CHAPTER in title 10: 28 Unless otherwise expressly provided, the penalties or remedies, or both, under 29 sections 11 and 12 of this Act, inclusive, are in addition to any other penalties and 30 remedies available under any other law of this state. Nothing in sections 11 and 12 of this 31 26.355.41 26.355.42 6 1220 Underscores indicate new language. Overstrikes indicate deleted language. HB1220 ENROLLED Act, inclusive, prohibits the collection of any applicable tax against a person receiving 1 nicotine products in violation of this chapter. 2 Section 14. That a NEW SECTION be added to a NEW CHAPTER in title 10: 3 There is created a nicotine enforcement fund. The Department of Revenue shall 4 administer the fund. The purpose of the fund is to defray expenses associated with the 5 enforcement of this chapter. 6 Moneys collected under this Act must be forwarded to the state treasurer to be 7 deposited into the fund. Interest on moneys credited to the fund must remain in the fund. 8 Expenditures from the fund must be budgeted through the general appropriation 9 bill. 10 Section 15. That a NEW SECTION be added to a NEW CHAPTER in title 10: 11 An alternative nicotine product shipped or transported under section 10 of this Act 12 is only for personal use and may not be resold. A violation of this section is a Class 1 13 misdemeanor. 14 26.355.42 7 1220 HB1220 ENROLLED An Act to regulate the sale of nicotine products, and to provide a penalty therefor. I certify that the attached Act originated in the: House as Bill No. 1220 Chief Clerk of the House Speaker of the House Attest: Chief Clerk of the House President of the Senate Attest: Secretary of the Senate House Bill No. 1220 File No. ____ Chapter No. ______ Received at this Executive Office this _____ day of _____________, 2026 at ____________M. By for the Governor The attached Act is hereby approved this ________ day of ______________, A.D., 2026 Governor STATE OF SOUTH DAKOTA, ss. Office of the Secretary of State Filed ____________, 2026 at _________ o'clock __M. Secretary of State By Asst. Secretary of State