Changes to Existing Law

26.979.13 26.979.14 101st Legislative Session 221 2026 South Dakota Legislature Senate Bill 221 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: Senator Karr Underscores indicate new language. Overstrikes indicate deleted language. An Act to establish requirements for regulate the distribution and retail sale of vapor nicotine products, and 1 to provide a penalty 1 therefor. 2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA: 3 Section 1. That § 10-1-28.2 be AMENDED: 4 10-1-28.2. All lists of taxpayers, licensees, or applicants compiled by the 5 Department of Revenue are confidential, except licensees which were licensed under the 6 provisions of chapter 10-47B, 32-6B, 32-6C, 32-7A, or 32-7B, or sections 2 to 21, 7 inclusive, of this Act. It is a NEW SECTION be added Class 2 misdemeanor to a NEW CHAPTER in title 34: 4 Terms used in this chapter mean: 5 (1) "Distributor," a person who sells vapor products for resale; 6 (2) "Retailer," a person who sells vapor products at retail; and 7 (3) "Vapor product," a noncombustible device that contains a consumable nicotine 8 liquid and produces a vapor or aerosol for inhalation from the application of a 9 heating element disclose any such list except to the consumable nicotine liquid, or a consumable nicotine liquid 10 suitable for use in 8 extent necessary to carry out the device, whether sold with official duties of the device or sold separately, but 11 the term does not include any product that has been approved by the United States 12 Food and Drug Administration for sale as a tobacco cessation product or for other 13 therapeutic purposes, if the product is marketed and sold solely for the approved 14 use. 15 department. 9 Section 2. That a NEW SECTION be added to a NEW CHAPTER in title 34: 16 A vapor product sold for resale or retail 10: 10 Terms used in this state may not contain: 17 chapter mean: 11 (1) Any ingredients other than: 18 (a) Vegetable glycerin; 19 (b) Propylene glycol; 20 (c) Natural or artificial food-grade flavoring; or 21 (d) Nicotine; or 22 (2) Any concentrations exceeding tolerances established "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 salt 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 delivery 16 systems, components, parts, or accessories. The term does not include food, drugs, 17 devices, or combination products, as defined in the Federal Food, Drug, and 18 Cosmetic Act, 21 U.S.C § 301 et seq. (January 1, 2026), approved for sale by the 19 United States 23 Pharmacopeia National Formulary, or the Food Chemicals Codex, for: 24 (a) Vitamin E acetate; 25 26.979.13 2 221 Underscores indicate new language. Overstrikes indicate deleted language. (b) Arsenic; 1 (c) Cyanide; or 2 (d) Diacetyl. 3 All ingredients in and Drug Administration; and 20 (3) "Retailer," a vapor product sold for resale or at retail in this state must 4 conform to the monograph specifications published by the United States Pharmacopeia 5 National Formulary and the Food Chemicals Codex. 6 A vapor product may contain trace contaminants if they are within the standard 7 deviation tolerated person engaged in the United States Pharmacopeia National Formulary or the Food 8 Chemicals Codex. 9 A violation business of this section is selling a Class 2 misdemeanor. 10 nicotine product to an 21 individual for any purpose other than resale. 22 Section 3. That a NEW SECTION be added to a NEW CHAPTER in title 34: 11 A vapor product sold for resale 10: 23 26.979.14 2 221 Underscores indicate new language. Overstrikes indicate deleted language. Any communication by, or retail in this state must: 12 (1) Be packaged in tamper-evident on behalf of, the manufacturer, distributor, or child-resistant packaging; and 13 (2) Have a label that contains: 14 (a) A list of ingredients; and 15 (b) The nicotine addiction warning, as provided in 21 C.F.R. § 1143.3 (January 16 1, 2026). 17 Neither the packaging nor labeling retailer 1 of a vapor tobacco product may contain any branding, 18 imagery, or promotional content, which uses cartoons, celebrities, gaming references, or 19 similar themes, to target persons under twenty-one years of age. 20 that indicates that the product contains a nicotine analog constitutes 2 presumptive evidence that the product contains a nicotine analog. 3 Section 4. That a NEW SECTION be added to a NEW CHAPTER in title 34: 21 10: 4 A distributor or retailer may not advertise or promote vapor products, brands, or 22 flavors on the exterior shall secure a license under this chapter to sell a nicotine product in this 5 state. A separate application and a separate license are required for each place of business 6 of a licensed location, using billboards, window wraps, exterior-23 facing signage, broadcast advertisements, digital media, or any other methods visible to 24 the public. 25 A distributor or retailer may advertise its business, provided that the advertising where a nicotine product is 26 limited sold at retail. 7 An application for a license required under this section must be made to the 8 Department of Revenue, on forms prescribed by the secretary. The application must 9 contain: 10 (1) The contact information of the applicant; 11 (2) The name and mailing address of the registered agent of the applicant; 12 (3) The physical address and mailing address of the place of business name, location, operating hours, of the retailer; 13 and 14 (4) All past and current violations of state or federal law by the applicant relating to 15 the sale, possession, or transportation of a statement that vapor 27 products may only nicotine product. 16 For retailers where at least fifty percent of the annual gross income in a year for 17 the place of business is estimated to be sold generated from the sales of nicotine products, the 18 application must be accompanied by a fee of five hundred dollars. 19 For retailers where less than fifty percent of the annual gross income in a year for 20 the place of business is estimated to individuals twenty-one years be generated from the sales of age or older. 28 nicotine products, the 21 application must be accompanied by a fee of two hundred fifty dollars. 22 Section 5. That a NEW SECTION be added to a NEW CHAPTER in title 34: 10: 23 A license issued under section 4 of this Act is valid through December thirtieth 24 following the issuance of the license, unless the license is revoked sooner by the secretary 25 pursuant to this chapter. A license is valid for an additional three days if the application 26 to renew a license is in the possession of the department before midnight on the date of 27 expiration. 28 A license issued under section 4 of this Act may be transferred if the new licensee 29 A vapor product may not be marketed or advertised on any medium that: obtains written approval from the department and is eligible for a license under this 30 (1) Lacks age-restriction access controls; or chapter. 31 26.979.13 3 221 Underscores indicate new language. Overstrikes indicate deleted language. (2) Contains content primarily directed at or recognized as appealing almost 1 exclusively to persons under twenty-one years of age. 2 Section 6. That a NEW SECTION be added to a NEW CHAPTER in title 34: 10: 32 26.979.14 3 221 Underscores indicate new language. Overstrikes indicate deleted language. A licensee may apply to the Department of Revenue for a renewal of the license 1 within: 2 (1) Thirty days prior to the expiration of the license; or 3 (2) Three days after the expiration of the license. 4 For retailers where at least fifty percent of the annual gross income in a year for 5 the place of business is generated from the sales of nicotine products, the renewal 6 application must be accompanied by a fee of five hundred dollars. 7 For retailers where less than fifty percent of the annual gross income in a year for 8 the place of business is generated from the sales of nicotine products, the renewal 9 application must be accompanied by a fee of two hundred fifty dollars. 10 Section 7. That a NEW SECTION be added to a NEW CHAPTER in title 10: 11 The Department of Revenue shall deny an application made under section 4 or 6 12 of this Act if: 13 (1) The application includes any false information; 14 (2) The applicant is under the age of twenty-one years; or 15 (3) The applicant has violated any state or federal law relating to the sale, possession, 16 or transportation of a nicotine product. 17 Section 8. That a NEW SECTION be added to a NEW CHAPTER in title 10: 18 The place of business of a licensee where a nicotine product is sold may not be 19 located within five hundred feet of an elementary or secondary school, unless nicotine 20 products were sold at the place of business prior to July 1, 2026. 21 The distance measured for purposes of this section is from the nearest point of the 22 property on which the place of business is situated, to the nearest point of the property 23 on which the school is situated. 24 Section 9. That a NEW SECTION be added to a NEW CHAPTER in title 10: 25 A licensee may not: 26 (1) Ship, or cause to be shipped, a nicotine product to an individual to be consumed 27 by the individual; 28 (2) Sell, or offer to sell, a nicotine product to a person under the age of twenty-one 29 years; 30 (3) Sell, or offer to sell, a nicotine product in a vending machine; 31 26.979.14 4 221 Underscores indicate new language. Overstrikes indicate deleted language. (4) Sell a nicotine product by phone, voice transmission, mail, internet, electronic-1 application-based service, curbside pick-up, or by any third-party means; 2 (5) Provide free samples of nicotine products to an individual; 3 (6) Purchase a nicotine product from a person that is not a licensed distributor or retailer 4 licensed wholesaler under chapter 10-50 or under the provisions of House Bill 1220, 5 as enacted by the One Hundred First Legislature; or 6 (7) Market, advertise, sell, or cause to be sold a nicotine product where the container 7 or packaging of the nicotine product contains, includes, or is capable of running or 8 interfacing with video games, mobile games, or interactive software on an 9 integrated electronic screen, digital interface, or external gaming system, or is 10 marketed as having gaming functionality. 11 A licensee is responsible for, and may be subject to enforcement action for, any 12 violation of this chapter committed by the licensee's employee, agency, agent, or clerk, 13 while acting within the scope of employment or agency. 14 Section 10. That a NEW SECTION be added to a NEW CHAPTER in title 10: 15 A licensee shall post a sign, within plain view of any area on the premises where 16 an individual may purchase nicotine products, stating in text, at least one inch in height, 17 that it is illegal to sell nicotine products to any individual under the age of twenty-one. 18 Adjacent to the sign, the licensee shall display a valid license issued under this 19 chapter. 20 Section 11. That a NEW SECTION be added to a NEW CHAPTER in title 10: 21 A licensee shall keep complete records of all nicotine products held in the licensee's 22 inventory and all nicotine products sold by the licensee, in a manner set forth in rules 23 promulgated by the secretary of the Department of Revenue pursuant to chapter 1-26. 24 The records must include information detailing the name, source, origin, 25 manufacturer, and address of the person supplying, and a copy of the purchase invoice, 26 of the nicotine products in the licensee's inventory. 27 The licensee shall preserve the records for three years. 28 If the records are not stored at the licensee's place of business, the licensee must, 29 upon request of the secretary, make the records available, in electronic form, within five 30 business days. 31 Section 12. That a NEW SECTION be added to a NEW CHAPTER in title 10: 32 26.979.14 5 221 Underscores indicate new language. Overstrikes indicate deleted language. The secretary of the Department of Revenue or an agent of the secretary may, 1 during normal business hours, inspect the records and premises of any licensee, and may 2 conduct an investigation to determine whether the licensee has violated any provision of 3 this chapter or rule promulgated thereunder. The secretary or agent of the secretary shall 4 conduct an inspection or investigation under this section, in accordance with rules 5 promulgated by the secretary pursuant to chapter 1-26. 6 Section 13. That a NEW SECTION be added to a NEW CHAPTER in title 10: 7 Except as otherwise provided in this section, the secretary of the Department of 8 Revenue, or an agent of the secretary, shall conduct an inspection of each licensee at least 9 once every two years. 10 If a licensee has been determined by the department to have violated any provision 11 of this chapter, the secretary or an agent of the secretary must conduct an inspection of 12 the licensee within six months of the determination. 13 Section 14. That a NEW SECTION be added to a NEW CHAPTER in title 10: 14 The Department of Revenue shall publish on the department's website the following 15 information for each licensee: 16 (1) The licensee's name; 17 (2) The name and mailing address of the registered agent of the licensee; 18 (3) The physical address of the licensee's place of business; 19 (4) The registered agent; and 20 (5) The date on which the license was initially issued. 21 If a licensee is determined to have violated a provision of this chapter or chapter 22 34-46, the secretary of the department must publish notice of the violation on the 23 department's website. 24 Section 15. That a NEW SECTION be added to a NEW CHAPTER in title 10: 25 If a licensee is determined to have violated a provision of sections 8 to 11, inclusive, 26 of this Act or a provision of chapter 34-46, the secretary of the Department of Revenue 27 must assess a penalty according to the following schedule: 28 (1) For a first violation, a fine not exceeding five hundred dollars; 29 (2) For a second violation within a thirty-six-month period, a fine of one thousand 30 dollars; 31 26.979.14 6 221 Underscores indicate new language. Overstrikes indicate deleted language. (3) For a third violation within a thirty-six-month period, a fine of two thousand dollars, 1 and in addition to the fine assessed under this subdivision the licensee: 2 (a) May not sell, or offer to sell, a nicotine product for the following thirty days; 3 and 4 (b) Must post a sign adjacent to the sign required in section 10 of this Act, 5 stating in text at least one inch in height that due to a violation of state law, 6 nicotine products may not be sold at this location at this time; and 7 (4) For a fourth violation within a thirty-six-month period, a fine of five thousand five 8 hundred dollars, and in addition to the fine assessed under this subdivision, the 9 secretary shall revoke the license. 10 Except as otherwise provided in this section, the secretary may, in accordance with 11 chapter 1-26, revoke or suspend a license issued under this chapter for failure of the 12 licensee to comply with a provision of this chapter or rules promulgated thereunder, or if 13 the licensee is convicted of a felony. 14 Section 16. That a NEW SECTION be added to a NEW CHAPTER in title 10: 15 A fine assessed under section 15 of this Act is due within thirty days of the 16 Department of Revenue providing notice of the fine to the licensee. 17 If the department determines that a licensee has failed to pay any fine, fee, or tax 18 imposed by this chapter, or any other fine, fee, or tax imposed by this state or a political 19 subdivision of this state by the due date, the secretary must suspend the license of the 20 retailer until the payment has been made. 21 Section 17. That a NEW SECTION be added to a NEW CHAPTER in title 10: 22 If the license of a retailer is revoked pursuant to section 15 of this Act, the retailer 23 must destroy all nicotine products possessed by the retailer, at the time of the revocation, 24 in accordance with all state and federal requirements related to hazardous materials. The 25 retailer shall submit verification of the destruction to the Department of Revenue, in a 26 manner provided in rules promulgated by the secretary of the department. 27 A retailer who fails to comply with this section within seven days from the 28 revocation of the license is subject to a fine of five thousand dollars, imposed by the 29 department. 30 Section 18. That a NEW SECTION be added to a NEW CHAPTER in title 10: 31 26.979.14 7 221 Underscores indicate new language. Overstrikes indicate deleted language. If a licensee is determined to have violated any provision of this chapter, the 1 licensee may appeal an action or decision of the secretary of the Department of Revenue, 2 in the same manner as provided in chapter 1-26. 3 Section 19. That a NEW SECTION be added to a NEW CHAPTER in title 10: 4 The Department of Revenue shall promulgate rules, in accordance with chapter 1-5 26, to: 6 (1) Establish a procedure for an initial and a renewal license application under this 7 chapter; 8 (2) Provide for the manner in which nicotine products must be destroyed and the 9 manner in which verification of the destruction must be submitted; 10 (3) Provide the process for assessing and collecting fines under this chapter; 11 (4) Establish standards for the keeping of records, as required in section 11 of this Act; 12 and 13 (5) Establish a process for the inspection of records and premises, as authorized in 14 section 12 of this Act. 15 Section 20. That a NEW SECTION be added to a NEW CHAPTER in title 10: 16 A retailer who sells a nicotine product in this state, without a license issued 17 pursuant to this chapter, is subject to a fine of five thousand dollars, per day, imposed by 18 the Department of Revenue. 19 Section 21. That a NEW SECTION be added to a NEW CHAPTER in title 10: 20 There is created a nicotine enforcement fund. The Department of Revenue shall 21 administer the fund. The purpose of the fund is to defray expenses associated with the 22 enforcement of this chapter. 23 Moneys collected under this chapter must be forwarded to the state treasurer to 24 be deposited into the fund. Interest on moneys credited to the fund must remain in the 25 fund. 26 Expenditures from the fund must be budgeted through the general appropriation 27 bill. 28 Section 22. That § 34-46-2 be AMENDED: 29 34-46-2. The following actions are unlawful: 30 26.979.14 8 221 Underscores indicate new language. Overstrikes indicate deleted language. (1) To knowingly sell or distribute a tobacco product to a person under the age of 1 twenty-one; 2 (2) To purchase or provide attempt to purchase, to receive or attempt to receive, to possess, 3 or to consume a tobacco product if a person is under the age of twenty-one; 4 (3) To purchase a tobacco product on behalf of, or to give a tobacco product to, any 5 person under the age of twenty-one; 6 (4)(3) To sell cigarettes or nicotine products, as defined in section 2 of this Act, other 7 than in an unopened package originating with the manufacturer and depicting the 8 warning labels required by federal law; 9 (5)(4) To sell tobacco products or nicotine products, as defined in section 2 of this Act, 10 through a vending machine located in a place other than a place that is open to 11 the public but to which persons under the age of twenty-one are denied access at 12 all times; 13 (6)(5) To sell cigarettes or smokeless tobacco, or both, tobacco products or nicotine 14 products, as defined in section 2 of this Act, through a self-service display other 15 than a display that is: 16 (a) A vending machine permitted under subdivision (5) of this section; or 17 (b) Located in a tobacco speciality store; or 18 (7)(6) To distribute tobacco product samples products or nicotine products, as defined in 19 section 2 of this Act, in or on a public street, sidewalk, or park that is within five 20 hundred feet of a playground, school, or other facility when the facility is being 21 used primarily by persons under the age of twenty-one. 22 A person who violates this section is subject to a fine of two hundred fifty dollars, 23 imposed by the Department of Revenue. Each violation is subject to a fine. 24 Section 23. That § 34-46-2.2 be AMENDED: 25 34-46-2.2. A merchant shall conspicuously post a notice, on the merchant's 26 premises, stating that "No no person under the age of 21twenty-one may be sold tobacco 27 products." 28 Any owner, lessee, or person having control of any cigarette vending machine shall 29 post, in a conspicuous place on each machine in use within the state, a warning which 30 shall be printed in bold type letters each of which shall be at least one-half inch high and 31 which shall be kept in easily legible form and repair stating: 32 "Any person under 21 years of age is forbidden by law to purchase cigarettes from 33 this machine." or nicotine products, as defined in section 2 of this Act. 34 26.979.14 9 221 Underscores indicate new language. Overstrikes indicate deleted language. Section 24. That § 34-46-21 be AMENDED: 1 34-46-21. No person may sell a vapor product as other than in an unopened package 2 originating with the manufacturer and depicting the warning labels required by federal 3 law, or sell a free vapor product through self-service display other than a display that is: 4 sample (1) A vending machine permitted under subdivision 34-46-2(5); or otherwise without monetary consideration. 5 (2) Located located in a tobacco specialty store. 6 A violation of person who violates this section is a Class 2 misdemeanor. A person 7 is not liable for more than one violation of this section on a single day subject to a fine of 8 two hundred fifty dollars, imposed by the Department of Revenue. Each violation is subject 9 to a fine. 10 Section 25. This Act is effective beginning January 1, 2027. 11

26.979.14 26.979.15 101st Legislative Session 221 2026 South Dakota Legislature Senate Bill 221 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: Senator Karr Underscores indicate new language. Overstrikes indicate deleted language. An Act to regulate the retail sale of nicotine products, and to provide a penalty 1 therefor. 2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA: 3 Section 1. That § 10-1-28.2 be AMENDED: 4 10-1-28.2. All lists of taxpayers, licensees, or applicants compiled by the 5 Department of Revenue are confidential, except licensees which were licensed under the 6 provisions of chapter 10-47B, 32-6B, 32-6C, 32-7A, or 32-7B, or sections 2 to 21, 7 inclusive, of this Act. It is a Class 2 misdemeanor to disclose any such list except to the 8 extent necessary to carry out the official duties of the department. 9 Section 2. That a NEW SECTION be added to a NEW CHAPTER in title 10: 10 Terms used in this chapter mean: 11 (1) "Alternative nicotine product," a noncombustible product containing nicotine from 12 any source or a nicotine analog that is intended for human consumption, whether 13 chewed, absorbed, dissolved, ingested, inhaled, or consumed by any other means. 14 The term does not include any vapor product or any product regulated as a drug 15 or device by the United States Food and Drug Administration under the Food, Drug 16 and Cosmetic Act, 21 U.S.C chapter 9 subchapter V (January 1, 2026); 17 (2) "Licensee," a person licensed under the provisions of this chapter; 12 (2) 18 (3) "Nicotine product," a product intended for human consumption, containing any 13 form of the chemical nicotine, including any salt an alternative nicotine product, tobacco product, 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 delivery 16 systems, components, parts, or accessories. The term does not include food, drugs, 17 devices, or combination products, as defined in the Federal Food, Drug, and 18 Cosmetic Act, 21 U.S.C § 301 et seq. (January 1, 2026), approved for sale by the vapor 19 United States Food and Drug Administration; and product; 20 (3) (4) "Retailer," a person engaged in the business of selling a nicotine product to an 21 individual for any purpose other than resale. resale; 22 (5) "Tobacco product," cigarettes, cigars, snuff, chewing tobacco, and any other 23 products made up or composed of tobacco in whole or in part; 24 26.979.15 2 221 Underscores indicate new language. Overstrikes indicate deleted language. (6) "Vapor product," a noncombustible product containing nicotine or a nicotine 1 analogue that employs a heating element, power source, electronic circuit, or other 2 electronic, chemical, or mechanical means, regardless of shape or size, that can 3 be used to produce vapor from nicotine in a solution. The term includes any 4 electronic cigarette, electronic cigar, electronic cigarillo, electronic pipe, or similar 5 product or device, and a consumable nicotine solution suitable for use in a vapor 6 product, whether sold with the product or separately. The term does not include 7 any product approved by the United States Food and Drug Administration for sale 8 as a tobacco cessation product and marketed and sold solely for that purpose; 9 (7) "Vending machine," a device that dispenses nicotine products to an individual for 10 any purpose other than resale; and 11 (8) "Vending machine retailer," a person engaged in the business of selling a nicotine 12 product from vending machines. 13 Section 3. That a NEW SECTION be added to a NEW CHAPTER in title 10: 23 26.979.14 2 221 Underscores indicate new language. Overstrikes indicate deleted language. 14 Any communication by, or on behalf of, the manufacturer, distributor, or retailer 1 15 of a tobacco product that nicotine product, which indicates that the product contains a nicotine analog analog, 16 constitutes 2 presumptive evidence that the product contains a nicotine analog. 3 17 Section 4. That a NEW SECTION be added to a NEW CHAPTER in title 10: 4 18 A retailer shall secure a license under this chapter to sell a nicotine product in this 5 19 state. A separate application and a separate license are required for each place of business 6 20 of a retailer where a nicotine product is sold at retail. 7 retail, and for each licensed establishment 21 within which a retailer places a vending machine that sells a nicotine product pursuant to 22 section 8 of this Act. 23 An application for a license required under this section must be made to the 8 24 Department of Revenue, on forms prescribed by the secretary. The application must 9 25 contain: 10 26 (1) The contact information of the applicant; 11 27 (2) The name and mailing address of the registered agent of the applicant; 12 28 (3) The physical address and mailing address of the place of business of the retailer; 13 29 and 14 30 (4) All past and current violations of state or federal law by the applicant relating to 15 31 the sale, possession, or transportation of a nicotine product. 16 32 26.979.15 3 221 Underscores indicate new language. Overstrikes indicate deleted language. For retailers where at least fifty percent of the annual gross income in a year for 17 1 the place of business is estimated to be generated from the sales of nicotine products, the 18 2 application must be accompanied by a fee of five hundred dollars. 19 3 For retailers where less than fifty percent of the annual gross income in a year for 20 4 the place of business is estimated to be generated from the sales of nicotine products, the 21 5 application must be accompanied by a fee of two hundred fifty dollars. 22 6 A retailer that places a vending machine in a licensed establishment pursuant to 7 section 8 of this Act, shall pay a fee of one hundred dollars for each licensed establishment 8 within which the retailer places a vending machine. 9 Section 5. That a NEW SECTION be added to a NEW CHAPTER in title 10: 23 10 A license issued under section 4 of this Act is valid through December thirtieth 24 11 following the issuance of the license, unless the license is revoked sooner by the secretary 25 12 pursuant to this chapter. A license is valid for an additional three days if the application 26 13 to renew a license is in the possession of the department before midnight on the date of 27 14 expiration. 28 15 A license issued under section 4 of this Act may be transferred if the new licensee 29 16 obtains written approval from the department and is eligible for a license under this 30 17 chapter. 31 18 Section 6. That a NEW SECTION be added to a NEW CHAPTER in title 10: 32 26.979.14 3 221 Underscores indicate new language. Overstrikes indicate deleted language. 19 A licensee may apply to the Department of Revenue for a renewal of the license 1 20 within: 2 21 (1) Thirty days prior to the expiration of the license; or 3 22 (2) Three days after the expiration of the license. 4 23 For retailers where at least fifty percent of the annual gross income in a year for 5 24 the place of business is generated from the sales of nicotine products, the renewal 6 25 application must be accompanied by a fee of five hundred dollars. 7 26 For retailers where less than fifty percent of the annual gross income in a year for 8 27 the place of business is generated from the sales of nicotine products, the renewal 9 28 application must be accompanied by a fee of two hundred fifty dollars. 10 29 A retailer that places a vending machine in a licensed establishment pursuant to 30 section 8 of this Act, shall pay a fee of one hundred dollars for each licensed establishment 31 within which the retailer places a vending machine. 32 26.979.15 4 221 Underscores indicate new language. Overstrikes indicate deleted language. Section 7. That a NEW SECTION be added to a NEW CHAPTER in title 10: 11 1 The Department of Revenue shall deny an application made under section 4 or 6 12 2 of this Act if: 13 3 (1) The application includes any false information; 14 4 (2) The applicant is under the age of twenty-one years; or 15 5 (3) The applicant has violated any state or federal law relating to the sale, possession, 16 6 or transportation of a nicotine product. 17 7 Section 8. That a NEW SECTION be added to a NEW CHAPTER in title 10: 18 The 8 A vending machine retailer may place of business of a licensee where vending machine within an establishment 9 licensed pursuant to chapter 35-4, or within a licensed gaming establishment as defined 10 in § 42-7B-4. 11 A vending machine must be equipped with an age-verification system. Age 12 verification is required to purchase a nicotine product from the vending machine. 13 For purposes of this Act, the retailer is sold may responsible for compliance with all provisions 14 of this Act. The establishment in which the vending machine is placed is not be 19 located within five hundred feet of an elementary a retailer or secondary school, 15 vending machine retailer, unless nicotine 20 products were are otherwise sold at the place establishment 16 without the use of business prior to July 1, 2026. 21 The distance measured for purposes of this section is from the nearest point of the 22 property on which the place of business is situated, to the nearest point of the property 23 on which the school is situated. 24 a vending machine. 17 Section 9. That a NEW SECTION be added to a NEW CHAPTER in title 10: 25 18 A licensee may not: 26 19 (1) Ship, or cause to be shipped, a nicotine product to an individual to be consumed 27 20 by the individual; 28 21 (2) Sell, or offer to sell, a nicotine product to a person under the age of twenty-one 29 22 years; 30 23 (3) Sell, or offer to sell, a nicotine product in a vending machine; 31 26.979.14 4 221 Underscores indicate new language. Overstrikes indicate deleted language. machine, except as provided 24 in section 8 of this Act; 25 (4) Sell a nicotine product by phone, voice transmission, mail, internet, electronic-1 electronic-26 application-based service, curbside pick-up, or by any third-party means; 2 27 (5) Provide free samples of nicotine products to an individual; 3 28 (6) Purchase a nicotine product from a person that is not a licensed distributor or 4 29 licensed wholesaler under chapter 10-50 or under the provisions of House Bill 1220, 5 30 as enacted by the One Hundred First Legislature; or 6 31 26.979.15 5 221 Underscores indicate new language. Overstrikes indicate deleted language. (7) Market, advertise, sell, or cause to be sold a nicotine product where the container 7 1 or packaging of the nicotine product contains, includes, includes a video game or is mobile game capable of running or 8 interfacing with video games, mobile games, or interactive software on an 9 integrated electronic screen, digital interface, or 2 external gaming system, system or is 10 marketed as having mobile application, or has a gaming functionality. 11 3 A licensee is responsible for, and may be subject to enforcement action for, any 12 4 violation of this chapter committed by the licensee's employee, agency, agent, or clerk, 13 5 while acting within the scope of employment or agency. 14 6 For purposes of this section, a sale of a nicotine product from a vending machine 7 does not constitute a sale described under subdivision (4) of this section. 8 Section 10. That a NEW SECTION be added to a NEW CHAPTER in title 10: 15 9 A licensee shall post a sign, within plain view of any area on the premises where 16 10 an individual may purchase nicotine products, stating in text, at least one inch in height, 17 11 that it is illegal to sell nicotine products to any individual under the age of twenty-one. 18 12 Adjacent to the sign, the licensee shall display a valid license issued under this 19 13 chapter. 20 14 A vending machine constitutes the point of sale for nicotine products sold from the 15 vending machine. The electronic display of the license and sign on the vending machine, 16 as required by this section, meets the requirements of this section. 17 Section 11. That a NEW SECTION be added to a NEW CHAPTER in title 10: 21 18 A licensee shall keep complete records of all nicotine products held in the licensee's 22 19 inventory and all nicotine products sold by the licensee, in a manner set forth in rules 23 20 promulgated by the secretary of the Department of Revenue pursuant to chapter 1-26. 24 21 The records must include information detailing the name, source, origin, 25 22 manufacturer, and address of the person supplying, and a copy of the purchase invoice, 26 23 of the nicotine products in the licensee's inventory. 27 24 The licensee shall preserve the records for three years. 28 25 If the records are not stored at the licensee's place of business, the licensee must, 29 26 upon request of the secretary, make the records available, in electronic form, within five 30 27 business days. 28 Nicotine products sold from, or contained in, a vending machine are inventory of 29 the licensed retailer, and are not the inventory of the establishment within which the 30 vending machine is placed. The requirements of this section apply only to the retailer, 31 and may be maintained at the retailer’s principal location. 32 26.979.15 6 221 Underscores indicate new language. Overstrikes indicate deleted language. The establishment within which the vending machine is placed is not subject to the 1 requirements of this section. 2 Section 12. That a NEW SECTION be added to a NEW CHAPTER in title 10: 32 26.979.14 5 221 Underscores indicate new language. Overstrikes indicate deleted language. 3 The secretary of the Department of Revenue or an agent of the secretary may, 1 4 during normal business hours, inspect the records and premises of any licensee, and may 2 5 conduct an investigation to determine whether the licensee has violated any provision of 3 6 this chapter or rule promulgated thereunder. The secretary or agent of the secretary shall 4 7 conduct an inspection or investigation under this section, in accordance with rules 5 8 promulgated by the secretary pursuant to chapter 1-26. 6 9 An establishment within which a vending machine is placed is not subject to the 10 provisions of this section solely for the purpose of determining whether the retailer has 11 violated any provisions of this chapter or any rule promulgated thereunder. 12 Section 13. That a NEW SECTION be added to a NEW CHAPTER in title 10: 7 13 Except as otherwise provided in this section, the secretary of the Department of 8 14 Revenue, or an agent of the secretary, shall conduct an inspection of each licensee at least 9 15 once every two years. 10 16 If a licensee has been determined by the department to have violated any provision 11 17 of this chapter, the secretary or an agent of the secretary must conduct an inspection of 12 18 the licensee within six months of the determination. 13 19 Section 14. That a NEW SECTION be added to a NEW CHAPTER in title 10: 14 20 The Department of Revenue shall publish on the department's website the following 15 21 information for each licensee: 16 22 (1) The licensee's name; 17 23 (2) The name and mailing address of the registered agent of the licensee; 18 24 (3) The physical address of the licensee's place of business; 19 25 (4) The registered agent; and 20 26 (5) The date on which the license was initially issued. 21 27 If a licensee is determined to have violated a provision of this chapter or chapter 22 28 34-46, the secretary of the department must publish notice of the violation on the 23 29 department's website. 24 30 Section 15. That a NEW SECTION be added to a NEW CHAPTER in title 10: 25 31 26.979.15 7 221 Underscores indicate new language. Overstrikes indicate deleted language. If a licensee is determined to have violated a provision of sections 8 to 11, inclusive, 26 1 of this Act or a provision of chapter 34-46, the secretary of the Department of Revenue 27 2 must assess a penalty according to the following schedule: 28 3 (1) For a first violation, a fine not exceeding five hundred dollars; 29 4 (2) For a second violation within a thirty-six-month period, a fine of one thousand 30 5 dollars; 31 26.979.14 6 221 Underscores indicate new language. Overstrikes indicate deleted language. (3) For a third violation within a thirty-six-month period, a fine of two thousand dollars, 1 7 and in addition to the fine assessed under this subdivision the licensee: 2 8 (a) May not sell, or offer to sell, a nicotine product for the following thirty days; 3 9 and 4 10 (b) Must post a sign adjacent to the sign required in section 10 of this Act, 5 11 stating in text at least one inch in height that due to a violation of state law, 6 12 nicotine products may not be sold at this location at this time; and 7 13 (4) For a fourth violation within a thirty-six-month period, a fine of five thousand five 8 14 hundred dollars, and in addition to the fine assessed under this subdivision, the 9 15 secretary shall revoke the license. 10 16 Except as otherwise provided in this section, the secretary may, in accordance with 11 17 chapter 1-26, revoke or suspend a license issued under this chapter for failure of the 12 18 licensee to comply with a provision of this chapter or rules promulgated thereunder, or if 13 19 the licensee is convicted of a felony. 14 20 Section 16. That a NEW SECTION be added to a NEW CHAPTER in title 10: 15 21 A fine assessed under section 15 of this Act is due within thirty days of the 16 22 Department of Revenue providing notice of the fine to the licensee. 17 23 If the department determines that a licensee has failed to pay any fine, fee, or tax 18 24 imposed by this chapter, or any other fine, fee, or tax imposed by this state or a political 19 25 subdivision of this state by the due date, the secretary must suspend the license of the 20 26 retailer until the payment has been made. 21 27 Section 17. That a NEW SECTION be added to a NEW CHAPTER in title 10: 22 28 If the license of a retailer is revoked pursuant to section 15 of this Act, the retailer 23 29 must destroy all nicotine products possessed by the retailer, at the time of the revocation, 24 30 in accordance with all state and federal requirements related to hazardous materials. The 25 31 retailer shall submit verification of the destruction to the Department of Revenue, in a 26 32 manner provided in rules promulgated by the secretary of the department. 27 33 26.979.15 8 221 Underscores indicate new language. Overstrikes indicate deleted language. A retailer who fails to comply with this section within seven days from the 28 1 revocation of the license is subject to a fine of five thousand dollars, imposed by the 29 2 department. 30 3 Section 18. That a NEW SECTION be added to a NEW CHAPTER in title 10: 31 26.979.14 7 221 Underscores indicate new language. Overstrikes indicate deleted language. 4 If a licensee is determined to have violated any provision of this chapter, the 1 5 licensee may appeal an action or decision of the secretary of the Department of Revenue, 2 6 in the same manner as provided in chapter 1-26. 3 7 Section 19. That a NEW SECTION be added to a NEW CHAPTER in title 10: 4 8 The Department of Revenue shall promulgate rules, in accordance with chapter 1-5 1-9 26, to: 6 10 (1) Establish a procedure for an initial and a renewal license application under this 7 11 chapter; 8 12 (2) Provide for the manner in which nicotine products must be destroyed and the 9 13 manner in which verification of the destruction must be submitted; 10 14 (3) Provide the process for assessing and collecting fines under this chapter; 11 15 (4) Establish standards for the keeping of records, as required in section 11 of this Act; 12 16 and 13 17 (5) Establish a process for the inspection of records and premises, as authorized in 14 18 section 12 of this Act. 15 19 Section 20. That a NEW SECTION be added to a NEW CHAPTER in title 10: 16 20 A retailer who sells a nicotine product in this state, without a license issued 17 21 pursuant to this chapter, is subject to a fine of five thousand dollars, per day, imposed by 18 22 the Department of Revenue. 19 23 Section 21. That a NEW SECTION be added to a NEW CHAPTER in title 10: 20 24 There is created a nicotine enforcement fund. The Department of Revenue shall 21 25 administer the fund. The purpose of the fund is to defray expenses associated with the 22 26 enforcement of this chapter. 23 27 Moneys collected under this chapter must be forwarded to the state treasurer to 24 28 be deposited into the fund. Interest on moneys credited to the fund must remain in the 25 29 fund. 26 30 26.979.15 9 221 Underscores indicate new language. Overstrikes indicate deleted language. Expenditures from the fund must be budgeted through the general appropriation 27 1 bill. 28 2 Section 22. That § 34-46-2 be AMENDED: 29 3 34-46-2. The following actions are unlawful: 30 26.979.14 8 221 Underscores indicate new language. Overstrikes indicate deleted language. 4 (1) To knowingly sell or distribute a tobacco product nicotine product, as defined in 5 section 2 of this Act, to a person under the age of 1 twenty-one; 2 6 (2) To purchase or attempt to purchase, to receive or attempt to receive, to possess, 3 7 or to consume a tobacco product if a person is under the age of twenty-one; 4 8 (3) To purchase a tobacco product nicotine product, as defined in section 2 of this Act, 9 on behalf of, or to give a tobacco product to, any 5 person under the age of twenty-one; 6 twenty-10 one; 11 (4)(3) To sell cigarettes or nicotine products, as defined in section 2 of this Act, other 7 than 12 in an unopened package originating with the manufacturer and depicting the 8 13 warning labels required by federal law; 9 14 (5)(4) To sell tobacco products or nicotine products, as defined in section 2 of this Act, 10 15 through a vending machine located in a place other than a place that is open to 11 16 the public but to which persons under the age of twenty-one are denied access at 12 17 all times; 13 times, except as otherwise provided in section 8 of this Act; 18 (6)(5) To sell cigarettes or smokeless tobacco, or both, tobacco products or nicotine 14 products, as defined in 19 section 2 of this Act, through a self-service display other 15 than a display that is: 16 20 (a) A vending machine permitted under subdivision (5) of this section; or 17 21 (b) Located in a tobacco speciality store; or 18 22 (7)(6) To distribute tobacco product samples products or samples of nicotine products, as defined in 19 23 section 2 of this Act, in or on a public street, sidewalk, or park that is within five 20 24 hundred feet of a playground, school, or other facility when the facility is being 21 25 used primarily by persons under the age of twenty-one. 22 A person who violates this section is subject to a fine of two hundred fifty dollars, 23 imposed by the Department of Revenue. Each violation is subject to a fine. 24 26 Section 23. That § 34-46-2.2 be AMENDED: 25 27 34-46-2.2. A Except as otherwise provided in this section, a merchant shall 28 conspicuously post a notice, on the merchant's 26 premises, stating that "No no person under 29 the age of 21twenty-one may be sold tobacco 27 products." 28 30 Any owner, lessee, or person having control of any cigarette vending machine shall 29 31 post, in a conspicuous place on each machine in use within the state, a warning which 30 32 26.979.15 10 221 Underscores indicate new language. Overstrikes indicate deleted language. shall be printed in bold type letters each of which shall be at least one-half inch high and 31 1 which shall be kept in easily legible form and repair stating: 32 2 "Any person under 21 years of age is forbidden by law to purchase cigarettes from 33 3 this machine." or nicotine products, as defined in section 2 of this Act. 34 26.979.14 9 221 Underscores indicate new language. Overstrikes indicate deleted language. 4 For purposes of this section, the notice may be displayed electronically on a 5 vending machine. 6 Section 24. That § 34-46-21 be AMENDED: 1 7 34-46-21. No person may sell a vapor product other than in an unopened package 2 8 originating with the manufacturer and depicting the warning labels required by federal 3 9 law, or sell a vapor product through self-service display other than a display that is: 4 10 (1) A vending machine permitted under subdivision 34-46-2(5); or 5 11 (2) Located located in a tobacco specialty store. 6 12 A violation of person who violates this section is a Class 2 misdemeanor. A person 7 13 is not liable for more than one violation of this section on a single day subject to a fine of 8 14 two hundred fifty dollars, imposed by the Department of Revenue. Each violation is subject 9 15 to a fine. 10 16 Section 25. This Act is effective beginning January 1, 2027. 11 17

26.979.15 26.979.16 101st Legislative Session 221 2026 South Dakota Legislature Senate Bill 221 SENATE HOUSE COMMERCE AND ENERGY ENGROSSED This bill has been extensively amended (hoghoused) and may no longer be consistent with the original intention of the sponsor. Introduced by: Senator Karr Underscores indicate new language. Overstrikes indicate deleted language. An Act to regulate the retail sale of nicotine products, and to provide a penalty 1 therefor. 2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA: 3 Section 1. That § 10-1-28.2 be AMENDED: 4 10-1-28.2. All lists of taxpayers, licensees, or applicants compiled by the 5 Department of Revenue are confidential, except licensees which were licensed under the 6 provisions of chapter 10-47B, 32-6B, 32-6C, 32-7A, or 32-7B, or sections 2 to 21, 18, 7 inclusive, of this Act. It is a Class 2 misdemeanor to disclose any such list except to the 8 extent necessary to carry out the official duties of the department. 9 Section 2. That a NEW SECTION be added to a NEW CHAPTER in title 10: 10 Terms used in this chapter mean: 11 (1) "Alternative nicotine product," a noncombustible product containing nicotine from 12 any source or a nicotine analog that is intended for human consumption, whether 13 chewed, absorbed, dissolved, ingested, inhaled, or consumed by any other means. 14 The term does not include any vapor product or any product regulated as a drug drug, 15 food, or device by the United States Food and Drug Administration under the Food, 16 Drug 16 and Cosmetic Act, 21 U.S.C chapter 9 subchapter V (January 1, 2026); 17 (2) "Department," the Department of Revenue; 18 (3) "Licensee," a person licensed under the provisions of this chapter; 18 (3) 19 (4) "Nicotine Analog," a substance that: 20 (a) Has a chemical structure substantially similar to the chemical structure of 21 nicotine; 22 (b) Has, or is represented to have, an effect on the central nervous system 23 similar to the chemical nicotine; and 24 26.979.16 2 221 Underscores indicate new language. Overstrikes indicate deleted language. (c) Is manufactured, formulated, sold, distributed, or marketed with the intent 1 to avoid the provisions of this chapter; 2 (5) "Nicotine product," an alternative nicotine product, tobacco product, or vapor 19 3 product; 20 (4) 4 (6) "Retailer," a person engaged in the business of selling a nicotine product to an 21 5 individual for any purpose other than resale; 22 (5) 6 (7) "Secretary," the secretary of the department; 7 (8) "Tobacco product," cigarettes, cigars, snuff, chewing tobacco, and any other 23 8 products made up or composed of tobacco in whole or in part; 24 26.979.15 2 221 Underscores indicate new language. Overstrikes indicate deleted language. (6) 9 (9) "Vapor product," a noncombustible product containing nicotine or a nicotine 1 analogue analog 10 that employs a heating element, power source, electronic circuit, or other 2 11 electronic, chemical, or mechanical means, regardless of shape or size, that which can 3 12 be used to produce vapor or aerosol from nicotine or a nicotine analog in a solution. 13 The term includes includes, but is not limited to, any 4 electronic cigarette, electronic cigar, 14 electronic cigarillo, electronic pipe, or similar 5 product or device, and a consumable 15 nicotine or nicotine analog solution suitable for use in a vapor 6 product, and any 16 component or part, whether sold with the product or separately. The term does 17 not include 7 any product approved by the United States Food and Drug 18 Administration for sale 8 as a tobacco cessation product and marketed and sold solely 19 for that purpose; 9 (7) 20 (10) "Vending machine," a device that dispenses nicotine products to an individual for 10 21 any purpose other than resale; resale. The term does not include a self-service display; 22 and 11 (8) 23 (11) "Vending machine retailer," a person engaged in the business of selling a nicotine 12 24 product from vending machines. 13 25 Section 3. That a NEW SECTION be added to a NEW CHAPTER in title 10: 14 26 Any communication by, or on behalf of, the manufacturer, distributor, or retailer 15 27 of a nicotine product, which indicates that the product contains a nicotine analog, 16 28 constitutes presumptive evidence that the product contains a nicotine analog. 17 29 Section 4. That a NEW SECTION be added to a NEW CHAPTER in title 10: 18 30 A retailer shall secure a license under this chapter to sell a nicotine product in this 19 31 state. A separate application and a separate license are required for each place of business 20 32 26.979.16 3 221 Underscores indicate new language. Overstrikes indicate deleted language. of a retailer where a nicotine product is sold at retail, and for each licensed establishment 21 within which a retailer places a retail. Each vending machine that sells a 1 nicotine product pursuant to 22 section 8 of this Act. 23 Act requires a separate license. 2 An application for a license required under this section must be made to the 24 Department of Revenue, 3 department, on forms prescribed by the secretary. The application must 25 contain: 26 4 (1) The contact information and date of birth of the applicant; 27 5 (2) The name and mailing address of the registered agent of the applicant; 28 (3) The physical address and mailing address of the place of business of the retailer; 29 and 30 (4) 6 (3) All past and current violations of state or federal law by the applicant relating to 31 7 the sale, possession, or transportation of a nicotine product. 32 26.979.15 3 221 Underscores indicate new language. Overstrikes indicate deleted language. product; and 8 (4) Any information required by the department pursuant to rules promulgated under 9 this chapter. 10 For retailers where at least fifty percent of the annual gross income in a year for 1 11 the place of business is estimated to be generated from the sales of nicotine products, the 2 12 application must be accompanied by a fee of five three hundred dollars. 3 13 For retailers where less than fifty percent of the annual gross income in a year for 4 14 the place of business is estimated to be generated from the sales of nicotine products, the 5 15 application must be accompanied by a fee of two hundred fifty dollars. 6 16 A vending machine retailer that places a vending machine in a licensed 17 establishment pursuant to 7 section 8 of this Act, shall pay a fee of one hundred dollars for 18 each licensed establishment 8 within which the retailer places a vending machine. 9 19 Section 5. That a NEW SECTION be added to a NEW CHAPTER in title 10: 10 20 A license issued under section 4 of this Act is valid through December thirtieth 11 thirty-first 21 following the issuance of the license, unless the license is revoked sooner by the secretary 12 22 pursuant to this chapter. A license is valid for an additional three days if the a pending application 13 to renew a license is in 23 the possession of the department before midnight on and if the date pending application is not subject to denial 24 pursuant to section 7 of 14 expiration. 15 this Act. 25 A license issued under section 4 of this Act may be transferred if transferred. 26 The transferee shall make an application in the same manner as provided in section 27 4, and the application must be acted upon in the same manner as an original application. 28 No transfer of any license to another person may be granted until all taxes incurred 29 by the transferor as a result of the operation of the licensed premises, including municipal 30 and state sales and use taxes, state reemployment assistance or unemployment insurance 31 tax, or any other state tax, are paid or are not delinquent. No transfer of any license to 32 another person may be granted until all property taxes which are the liability of the 33 licensee levied on the licensed premises are paid or are not delinquent. 34 26.979.16 4 221 Underscores indicate new licensee 16 obtains written approval from the department and is eligible for a license under this 17 chapter. 18 language. Overstrikes indicate deleted language. Section 6. That a NEW SECTION be added to a NEW CHAPTER in title 10: 19 1 A licensee may apply to the Department of Revenue department for a renewal of the license 20 within: 21 2 (1) Thirty Sixty days prior to the expiration of the license; or 22 3 (2) Three days after the expiration of the license. 23 4 For retailers where at least fifty percent of the annual gross income in a year for 24 5 the place of business is generated from the sales of nicotine products, the renewal 25 6 application must be accompanied by a fee of five three hundred dollars. 26 7 For retailers where less than fifty percent of the annual gross income in a year for 27 8 the place of business is generated from the sales of nicotine products, the renewal 28 9 application must be accompanied by a fee of two hundred fifty dollars. 29 10 A vending machine retailer that places a vending machine in a licensed 11 establishment pursuant to 30 section 8 of this Act, shall pay a fee of one hundred dollars for 12 each licensed establishment 31 within which the retailer places a vending machine. 32 26.979.15 4 221 Underscores indicate new language. Overstrikes indicate deleted language. 13 Section 7. That a NEW SECTION be added to a NEW CHAPTER in title 10: 1 14 The Department of Revenue department shall deny an application made under section 4 or 6 2 of this Act if: 3 if 15 the applicant: 16 (1) The application includes Provides any false information; 4 17 (2) The applicant is Is under the age of twenty-one years; 18 (3) Is not current on the remittance of all applicable state and local taxes; or 5 (3) The applicant has violated any state or federal law relating to the sale, possession, 6 or transportation 19 (4) Has been convicted of a nicotine product. 7 felony in this or any other jurisdiction, unless at least ten 20 years have passed since satisfactory completion of the sentence or probation 21 imposed by the court in each felony conviction. 22 Section 8. That a NEW SECTION be added to a NEW CHAPTER in title 10: 8 23 A vending machine retailer may place a vending machine within an establishment 9 24 licensed pursuant to chapter 35-4, or within a licensed gaming establishment as defined 10 25 in § 42-7B-4. 11 42-7B-4, if the vending machine is placed in an area of the establishment in which 26 access is denied to persons under the age of twenty-one years. 27 A vending machine must be equipped with an age-verification system. Age 12 28 verification is required to purchase a nicotine product from the vending machine. 13 29 For purposes of this Act, the vending machine retailer is responsible for compliance 30 with all provisions 14 of this Act. The establishment in which the vending machine is placed 31 26.979.16 5 221 Underscores indicate new language. Overstrikes indicate deleted language. is not a retailer or 15 vending machine retailer, unless nicotine products are otherwise sold 1 at the establishment 16 without the use of a vending machine. 17 2 Section 9. That a NEW SECTION be added to a NEW CHAPTER in title 10: 18 3 A licensee may not: 19 4 (1) Ship, or cause to be shipped, a nicotine product to an individual to be consumed 20 5 by the individual; 21 individual, except as otherwise provided in chapter 10-50C or under 6 provisions of House Bill 1220, as enacted by the One Hundred First Legislature; 7 (2) Sell, or offer to sell, a nicotine product to a person under the age of twenty-one 22 8 years; 23 9 (3) Sell, or offer to sell, a nicotine product in a vending machine, except as provided 24 10 in section 8 of this Act; 25 11 (4) Sell a nicotine product by phone, voice transmission, mail, internet, electronic-26 electronic-12 application-based service, curbside pick-up, or by any third-party means; 27 means, except 13 as otherwise provided in chapter 10-50C or under provisions of House Bill 1220, 14 as enacted by the One Hundred First Legislature; 15 (5) Provide free samples of nicotine products to an individual; 28 16 (6) Purchase a nicotine product from a person that is not a licensed distributor or 29 17 licensed wholesaler under chapter 10-50 or under the provisions of House Bill 1220, 30 18 as enacted by the One Hundred First Legislature; or 31 26.979.15 5 221 Underscores indicate new language. Overstrikes indicate deleted language. 19 (7) Market, advertise, sell, Sell or cause to be sold a nicotine product where the container 1 product, container, or 20 packaging includes a video game or mobile game capable of interfacing with an 2 21 external gaming system or mobile application, or has a gaming functionality. 3 22 A licensee is responsible for, and may be subject to enforcement action for, any 4 23 violation of this chapter committed by the licensee's employee, agency, agent, or clerk, 5 24 while acting within the scope of employment or agency. 6 25 For purposes of this section, a sale of a nicotine product from a vending machine 7 26 does not constitute a sale described under subdivision (4) of this section. 8 27 Section 10. That a NEW SECTION be added to a NEW CHAPTER in title 10: 9 A licensee shall post a sign, within plain view of any area on the premises where 10 an individual may purchase nicotine products, stating in text, at least one inch in height, 11 that it is illegal to sell nicotine products to any individual under the age of twenty-one. 12 Adjacent to the sign, the licensee shall display a valid license issued under this 13 chapter. 14 A vending machine constitutes the point of sale for nicotine products sold from the 15 vending machine. The electronic display of the license and sign on the vending machine, 16 as required by this section, meets the requirements of this section. 17 Section 11. That a NEW SECTION be added to a NEW CHAPTER in title 10: 18 28 A licensee shall keep complete records of all nicotine products held in the licensee's 19 29 inventory and all nicotine products sold by the licensee, in a manner set forth in rules 20 30 promulgated by the secretary of the Department of Revenue pursuant to chapter 1-26. 21 31 26.979.16 6 221 Underscores indicate new language. Overstrikes indicate deleted language. The records must include information detailing the name, source, origin, 22 1 manufacturer, and address of the person supplying, and a copy of the purchase invoice, 23 2 of the nicotine products in the licensee's inventory. 24 3 The licensee shall preserve the records for three years. 25 4 If the records are not stored at the licensee's place of business, the licensee must, 26 5 upon request of the secretary, make the records available, in electronic form, within five 27 6 business days. 28 7 Nicotine products sold from, or contained in, a vending machine are inventory of 29 8 the licensed retailer, and are not the inventory of the establishment within which the 30 9 vending machine is placed. The requirements of this section apply only to the retailer, 31 and 10 may be maintained at the retailer’s principal location. 32 26.979.15 6 221 Underscores indicate new language. Overstrikes indicate deleted language. 11 The establishment within which the vending machine is placed is not subject to the 1 12 requirements of this section. 2 section, but must allow access to the vending machine for purposes 13 of compliance with this chapter. 14 Section 11. That a NEW SECTION be added to a NEW CHAPTER in title 10: 15 The secretary may, during normal business hours, inspect the records and 16 premises of any licensee, and may conduct an investigation to determine whether the 17 licensee has violated any provision of this chapter or rule promulgated thereunder. The 18 secretary shall conduct an inspection or investigation under this section, in accordance 19 with rules promulgated by the secretary pursuant to chapter 1-26. 20 An establishment within which a vending machine is placed is not subject to the 21 provisions of this section solely for the purpose of determining whether the retailer has 22 violated any provisions of this chapter or any rule promulgated thereunder. 23 Section 12. That a NEW SECTION be added to a NEW CHAPTER in title 10: 3 The secretary of the Department of Revenue or an agent of 24 If the secretary may, 4 during normal business hours, inspect the records and premises receives information of a violation by any licensee of any licensee, and may 5 conduct an investigation provision 25 of this chapter, the secretary must investigate the alleged violation. If there is substantial 26 evidence to determine whether support that a violation of any provision of this chapter has occurred, the 27 secretary must proceed in accordance with the provisions of this chapter. 28 If a licensee has been determined by the department to have violated any provision 29 of 6 this chapter or rule promulgated thereunder. The secretary or agent of chapter, the secretary shall 7 must conduct an inspection or investigation under this section, in accordance with rules 8 promulgated by of the secretary pursuant to chapter 1-26. 9 An establishment licensee within which a vending machine is placed is not subject to six months 30 of the 10 provisions of this section solely for the purpose of determining whether the retailer has 11 violated any provisions of this chapter or any rule promulgated thereunder. 12 determination. 31 Section 13. That a NEW SECTION be added to a NEW CHAPTER in title 10: 13 Except as otherwise provided in this section, the secretary of the Department of 14 Revenue, or an agent of the secretary, shall conduct an inspection of each licensee at least 15 once every two years. 16 If a licensee has been determined by the department to have violated any provision 17 of this chapter, the secretary or an agent of the secretary must conduct an inspection of 18 the licensee within six months of the determination. 19 Section 14. That a NEW SECTION be added to a NEW CHAPTER in title 10: 20 The Department of Revenue shall publish on the department's website the following 21 information for each licensee: 22 (1) The licensee's name; 23 (2) The name and mailing address of the registered agent of the licensee; 24 (3) The physical address of the licensee's place of business; 25 (4) The registered agent; and 26 (5) The date on which the license was initially issued. 27 If a licensee is determined to have violated a provision of this chapter or chapter 28 34-46, the secretary of the department must publish notice of the violation on the 29 department's website. 30 Section 15. That a NEW SECTION be added to a NEW CHAPTER in title 10: 31 26.979.15 32 26.979.16 7 221 Underscores indicate new language. Overstrikes indicate deleted language. If a licensee is determined to have violated a provision of sections 8 to 11, 10, inclusive, 1 of this Act or a provision of chapter 34-46, the secretary of the Department of Revenue 2 must assess a penalty according 2 to the following schedule: 3 (1) For a first violation, a fine not exceeding five hundred dollars; 4 (2) For a second violation within a thirty-six-month period, a fine of one thousand 5 dollars; 6 (3) For a third violation within a thirty-six-month period, a fine of two thousand dollars, 7 and in addition to the fine assessed under this subdivision secretary shall suspend the licensee: 8 (a) May not sell, or offer to sell, a nicotine product license for the following thirty days; 9 and 10 (b) Must post a sign adjacent to the sign required in section 10 of this Act, 11 stating in text at least one inch in height that due to a violation of state law, 12 nicotine products may not be sold at this location at this time; and 13 8 (4) For a fourth violation within a thirty-six-month period, a fine of five thousand five 14 9 hundred dollars, and in addition to the fine assessed under this subdivision, the 15 secretary shall revoke the license. 16 10 Except as otherwise provided in this section, the secretary may, in accordance with 17 11 chapter 1-26, revoke or suspend a license issued under this chapter for failure of the 18 12 licensee to comply with a provision of this chapter or rules promulgated thereunder, or if 19 13 the licensee is convicted of a felony. 14 A fine assessed under this section is due within thirty days of the department 15 providing notice of the fine to the licensee. 16 Section 14. That a NEW SECTION be added to a NEW CHAPTER in title 10: 17 If the license of a retailer is revoked pursuant to section 13 of this Act, the retailer 18 must: 19 (1) Destroy all nicotine products possessed by the retailer, at the time of the 20 revocation, in accordance with all state and federal requirements related to 21 hazardous materials; or 22 (2) Return all nicotine products to the licensed distributor or licensed wholesaler under 23 chapter 10-50 or under the provisions of House Bill 1220, as enacted by the One 24 Hundred First Legislature, from which the nicotine products were purchased by the 25 licensee. 26 The retailer shall submit verification of the destruction or return to the department, 27 in a manner provided in rules promulgated by the secretary. 28 A retailer who fails to comply with this section within sixty days from the revocation 29 of the license is subject to a fine of five thousand dollars, imposed by the department. 30 Section 15. That a NEW SECTION be added to a NEW CHAPTER in title 10: 31 26.979.16 8 221 Underscores indicate new language. Overstrikes indicate deleted language. If a licensee is determined to have violated any provision of this chapter, the 1 licensee may appeal an action or decision of the secretary, in the same manner as provided 2 in chapter 1-26. 3 Section 16. That a NEW SECTION be added to a NEW CHAPTER in title 10: 21 A fine assessed 4 The department shall promulgate rules, in accordance with chapter 1-26, to: 5 (1) Establish a procedure for an initial and a renewal license application under this 6 chapter, and the information required in the application; 7 (2) Provide for the manner in which nicotine products must be destroyed or returned 8 and the manner in which verification of the destruction or return must be 9 submitted; 10 (3) Provide the process for assessing and collecting fines under this chapter; 11 (4) Establish standards for the keeping of records, as required in section 15 10 of this Act is due within thirty days Act; 12 and 13 (5) Establish a process for the inspection 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 records and premises, as authorized in 14 section 11 of this state by the due date, the secretary must suspend the license of the 26 retailer until the payment has been made. 27 Act. 15 Section 17. 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 15 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 retailer shall submit verification of the destruction to the Department of Revenue, in a 32 manner provided in rules promulgated by the secretary of the department. 33 26.979.15 8 221 Underscores indicate new language. Overstrikes indicate deleted language. 16 A retailer who fails sells a nicotine product in this state, without a license issued 17 pursuant to comply with this section within seven days from the 1 revocation of the license chapter, is subject to a fine of five thousand hundred dollars, per day, imposed by 18 the 2 department. 3 department, except as provided in section 5 of this Act. 19 Section 18. That a NEW SECTION be added to a NEW CHAPTER in title 10: 4 If a licensee is determined to have violated any provision of this chapter, the 5 licensee may appeal an action or decision of the secretary of the Department of Revenue, 6 in the same manner as provided in chapter 1-26. 7 Section 19. That a NEW SECTION be added to a NEW CHAPTER in title 10: 8 The Department of Revenue shall promulgate rules, in accordance with chapter 1-9 26, to: 10 (1) Establish a procedure for an initial and a renewal license application under this 11 chapter; 12 (2) Provide for the manner in which nicotine products must be destroyed and the 13 manner in which verification of the destruction must be submitted; 14 (3) Provide the process for assessing and collecting fines under this chapter; 15 (4) Establish standards for the keeping of records, as required in section 11 of this Act; 16 and 17 (5) Establish a process for the inspection of records and premises, as authorized in 18 section 12 of this Act. 19 Section 20. That a NEW SECTION be added to a NEW CHAPTER in title 10: 20 A retailer who sells a nicotine product in this state, without a license issued 21 pursuant to this chapter, is subject to a fine of five thousand dollars, per day, imposed by 22 the Department of Revenue. 23 Section 21. That a NEW SECTION be added to a NEW CHAPTER in title 10: 24 There is created a nicotine enforcement fund. The Department of Revenue department shall 25 administer the 21 fund. The purpose of the fund is to defray expenses associated with the 26 enforcement of 22 this chapter. 27 23 Moneys collected under this chapter must be forwarded to the state treasurer to 28 24 be deposited into the fund. Interest on moneys credited to the fund must remain in the 29 25 fund. 30 26.979.15 9 221 Underscores indicate new language. Overstrikes indicate deleted language. 26 Expenditures from the fund must be budgeted through the general appropriation 1 27 bill. 2 28 Section 22. 19. That § 34-46-2 be AMENDED: 3 29 34-46-2. The following actions are unlawful: 4 30 26.979.16 9 221 Underscores indicate new language. Overstrikes indicate deleted language. (1) To knowingly sell or distribute a tobacco product nicotine product, as defined in 5 1 section 2 of this Act, to a person under the age of twenty-one; 6 2 (2) To purchase or attempt to purchase, to receive or attempt to receive, to possess, 7 3 or to consume a tobacco product nicotine product, as defined in section 2 of this Act, if a 4 person is under the age of twenty-one; 8 5 (3) To purchase a tobacco product nicotine product, as defined in section 2 of this Act, 9 6 on behalf of, or to give a tobacco nicotine product to, any person under the age of twenty-10 one; 11 (4)(3) 7 twenty-one; 8 (4) To sell cigarettes nicotine products, as defined in section 2 of this Act, other than 12 9 in an unopened package originating with the manufacturer and depicting the 13 10 warning labels required by federal law; 14 (5)(4) 11 (5) To sell tobacco products nicotine products, as defined in section 2 of this Act, 15 12 through a vending machine located in a place other than a place that is open to 16 13 the public but to which persons under the age of twenty-one are denied access at 17 14 all times, except as otherwise provided in section 8 of this Act; 18 (6)(5) 15 (6) To sell cigarettes or smokeless tobacco, or both, nicotine products, as defined in 19 16 section 2 of this Act, through a self-service display other than a display that is: 20 17 (a) A vending machine permitted under subdivision (5) of this section; or 21 18 (b) Located in a tobacco speciality store; or 22 (7)(6) 19 (7) To distribute tobacco product samples samples of nicotine products, as defined in 23 20 section 2 of this Act, in or on a public street, sidewalk, or park that is within five 24 21 hundred feet of a playground, school, or other facility when the facility is being 25 22 used primarily by persons under the age of twenty-one. 26 23 Section 23. 20. That § 34-46-2.2 be AMENDED: 27 24 34-46-2.2. A Except as otherwise provided in this section, a merchant shall 28 25 conspicuously post a notice, on the merchant's premises, stating in text at least one inch 26 in height, that "No no person under 29 the age of 21twenty-one may be sold tobacco 27 products." 30 28 Any owner, lessee, or person having control of any cigarette vending machine shall 31 29 post, in a conspicuous place on each machine in use within the state, a warning which 32 26.979.15 10 221 Underscores indicate new language. Overstrikes indicate deleted language. 30 shall be printed in bold type letters each of which shall be at least one-half inch high and 1 31 which shall be kept in easily legible form and repair stating: 2 32 "Any person under 21 years of age is forbidden by law to purchase cigarettes from 3 33 this machine." or nicotine products, as defined in section 2 of this Act. 4 34 26.979.16 10 221 Underscores indicate new language. Overstrikes indicate deleted language. For purposes of this section, the notice may be displayed electronically on a 5 1 vending machine. 2 Adjacent to the sign, the licensee shall display a valid license issued under this 3 chapter. A vending machine constitutes the point of sale for nicotine products sold from 4 the vending machine. 5 Section 21. That § 34-46-3 be AMENDED: 6 34-46-3. Each county state's attorney or a local law enforcement officer 7 designated by the state's attorney shall annually conduct unannounced, random 8 inspections at various locations where tobacco nicotine products, as defined in section 2 9 of this Act, are sold or distributed to ensure compliance with this chapter. Persons under 10 the age of twenty-one may be enlisted to test compliance with this chapter. Such persons 11 may be used to test compliance with this chapter only if the testing is conducted under 12 the supervision of the county state's attorney or a local law enforcement officer designated 13 by the state's attorney and written parental consent has been provided. Any other use of 14 persons under the age of twenty-one to test compliance with this chapter is unlawful and 15 the persons responsible for such use are subject to the penalties prescribed in § 34-46-5. 16 Any evidence of a violation of this chapter or sections 2 to 18, inclusive, of this Act, 17 must be submitted to the secretary of the Department of Revenue. 18 Section 24. 22. That § 34-46-21 be AMENDED: 7 19 34-46-21. No person may sell a vapor product nicotine product, as defined in section 2 of 20 this Act, other than in an unopened package 8 originating with the manufacturer and 21 depicting the warning labels required by federal 9 law, or sell a vapor product through self-service self-22 service display other than a display that is: 10 23 (1) A vending machine permitted under subdivision 34-46-2(5); or 11 24 (2) Located in a tobacco specialty store. 12 25 A violation of person who violates this section is a Class 2 misdemeanor. A person 13 26 is not liable for more than one violation of this section on a single day subject to a fine of 14 27 two hundred fifty dollars, imposed by the Department of Revenue. Each violation is subject 15 28 to a fine. 16 29 Section 25. 23. This Act is effective beginning January 1, 2027. 17 30

26.979.16 26.979.17 101st Legislative Session 221 2026 South Dakota Legislature Senate Bill 221 HOUSE COMMERCE AND ENERGY ENGROSSED This bill has been extensively amended (hoghoused) and may no longer be consistent with the original intention of the sponsor. Introduced by: Senator Karr Underscores indicate new language. Overstrikes indicate deleted language. An Act to regulate the retail sale of nicotine products, and to provide a penalty 1 therefor. 2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA: 3 Section 1. That § 10-1-28.2 be AMENDED: 4 10-1-28.2. All lists of taxpayers, licensees, or applicants compiled by the 5 Department of Revenue are confidential, except licensees which were licensed under the 6 provisions of chapter 10-47B, 32-6B, 32-6C, 32-7A, or 32-7B, or sections 2 to 18, 7 inclusive, of this Act. It is a Class 2 misdemeanor to disclose any such list except to the 8 extent necessary to carry out the official duties of the department. 9 Section 2. That a NEW SECTION be added to a NEW CHAPTER in title 10: 10 Terms used in this chapter mean: 11 (1) "Alternative nicotine product," a noncombustible product containing nicotine from 12 any source or a nicotine analog that is intended for human consumption, whether 13 chewed, absorbed, dissolved, ingested, inhaled, or consumed by any other means. 14 The term does not include any vapor product or any product regulated as a drug, 15 food, or device by the United States Food and Drug Administration under the Food, 16 Drug and Cosmetic Act, 21 U.S.C chapter 9 subchapter V (January 1, 2026); 17 (2) "Department," the Department of Revenue; 18 (3) "Licensee," a person licensed under the provisions of this chapter; 19 (4) "Nicotine Analog," analog," a substance that: 20 (a) Has a chemical structure substantially similar to the chemical structure of 21 nicotine; 22 (b) Has, or is represented to have, an effect on the central nervous system 23 similar to the chemical nicotine; and 24 26.979.16 26.979.17 2 221 Underscores indicate new language. Overstrikes indicate deleted language. (c) Is manufactured, formulated, sold, distributed, or marketed with the intent 1 to avoid the provisions of this chapter; 2 (5) "Nicotine product," an alternative nicotine product, tobacco product, or vapor 3 product; 4 (6) "Retailer," a person engaged in the business of selling a nicotine product to an 5 individual for any purpose other than resale; 6 (7) "Secretary," the secretary of the department; 7 (8) "Tobacco product," cigarettes, cigars, snuff, chewing tobacco, and any other 8 products made up or composed of tobacco in whole or in part; 9 (9) "Vapor product," a noncombustible product containing nicotine or a nicotine analog 10 that employs a heating element, power source, electronic circuit, or other 11 electronic, chemical, or mechanical means, regardless of shape or size, which can 12 be used to produce vapor or aerosol from nicotine or a nicotine analog in a solution. 13 The term includes, but is not limited to, any electronic cigarette, electronic cigar, 14 electronic cigarillo, electronic pipe, or similar product or device, and a consumable 15 nicotine or nicotine analog solution suitable for use in a vapor product, and any 16 component or part, whether sold with the product or separately. The term does 17 not include any product approved by the United States Food and Drug 18 Administration for sale as a tobacco cessation product and marketed and sold solely 19 for that purpose; 20 (10) "Vending machine," a device that dispenses nicotine products to an individual for 21 any purpose other than resale. The term does not include a self-service display; 22 and 23 (11) "Vending machine retailer," a person engaged in the business of selling a nicotine 24 product from vending machines. 25 Section 3. That a NEW SECTION be added to a NEW CHAPTER in title 10: 26 Any communication by, or on behalf of, the manufacturer, distributor, or retailer 27 of a nicotine product, which indicates that the product contains a nicotine analog, 28 constitutes presumptive evidence that the product contains a nicotine analog. 29 Section 4. That a NEW SECTION be added to a NEW CHAPTER in title 10: 30 A retailer shall secure a license under this chapter to sell a nicotine product in this 31 state. A separate application and a separate license are required for each place of business 32 26.979.16 26.979.17 3 221 Underscores indicate new language. Overstrikes indicate deleted language. of a retailer where a nicotine product is sold at retail. Each vending machine that sells a 1 nicotine product pursuant to section 8 of this Act requires a separate license. 2 An application for a license required under this section must be made to the 3 department, on forms prescribed by the secretary. The application must contain: 4 (1) The contact information and date of birth of the applicant; 5 (2) The physical address and mailing address of the place of business of the retailer; 6 (3) All past and current violations of state or federal law by the applicant relating to 7 the sale, possession, or transportation of a nicotine product; and 8 (4) Any information required by the department pursuant to rules promulgated under 9 this chapter. 10 For retailers where at least fifty percent of the annual gross income in a year for 11 the place of business is estimated to be generated from the sales of nicotine products, the 12 application must be accompanied by a fee of three hundred dollars. 13 For retailers where less than fifty percent of the annual gross income in a year for 14 the place of business is estimated to be generated from the sales of nicotine products, the 15 application must be accompanied by a fee of two hundred dollars. 16 A vending machine retailer that places a vending machine in a licensed 17 establishment pursuant to section 8 of this Act, shall pay a fee of one hundred dollars for 18 each vending machine. 19 Section 5. That a NEW SECTION be added to a NEW CHAPTER in title 10: 20 A license issued under section 4 of this Act is valid through December thirty-first 21 following the issuance of the license, unless the license is revoked sooner by the secretary 22 pursuant to this chapter. A license is valid if a pending application to renew a license is in 23 the possession of the department and if the pending application is not subject to denial 24 pursuant to section 7 of this Act. 25 A license issued under section 4 of this Act may be transferred. 26 The transferee shall make an application in the same manner as provided in section 27 4, and the application must be acted upon in the same manner as an original application. 28 No transfer of any license to another person may be granted until all taxes incurred 29 by the transferor as a result of the operation of the licensed premises, including municipal 30 and state sales and use taxes, state reemployment assistance or unemployment insurance 31 tax, or any other state tax, are paid or are not delinquent. No transfer of any license to 32 another person may be granted until all property taxes which are the liability of the 33 licensee levied on the licensed premises are paid or are not delinquent. 34 26.979.16 26.979.17 4 221 Underscores indicate new language. Overstrikes indicate deleted language. Section 6. That a NEW SECTION be added to a NEW CHAPTER in title 10: 1 A licensee may apply to the department for a renewal of the license within: 2 (1) Sixty days prior to the expiration of the license; or 3 (2) Three days after the expiration of the license. 4 For retailers where at least fifty percent of the annual gross income in a year for 5 the place of business is generated from the sales of nicotine products, the renewal 6 application must be accompanied by a fee of three hundred dollars. 7 For retailers where less than fifty percent of the annual gross income in a year for 8 the place of business is generated from the sales of nicotine products, the renewal 9 application must be accompanied by a fee of two hundred dollars. 10 A vending machine retailer that places a vending machine in a licensed 11 establishment pursuant to section 8 of this Act, shall pay a fee of one hundred dollars for 12 each vending machine. 13 Section 7. That a NEW SECTION be added to a NEW CHAPTER in title 10: 14 The department shall deny an application made under section 4 or 6 of this Act if 15 the applicant: 16 (1) Provides any false information; 17 (2) Is under the age of twenty-one years; 18 (3) Is not current on the remittance of all applicable state and local taxes; or 19 (4) Has been convicted of, or pled guilty to, a felony related to a financial crime, a 20 crime related to the sale or distribution of a felony nicotine product or alcohol, or a crime 21 related to a controlled substance, in this or any other jurisdiction, unless at least ten 20 22 three years have passed since satisfactory completion of the sentence or probation 21 23 imposed by the court in each felony conviction. 22 24 Section 8. That a NEW SECTION be added to a NEW CHAPTER in title 10: 23 25 A vending machine retailer may place a vending machine within an establishment 24 26 licensed pursuant to chapter 35-4, or within a licensed gaming establishment as defined 25 27 in § 42-7B-4, if the vending machine is placed in an area of the establishment in which 26 28 access is denied to persons under the age of twenty-one years. 27 29 A vending machine must be equipped with an age-verification system. Age 28 30 verification is required to purchase a nicotine product from the vending machine. 29 31 26.979.17 5 221 Underscores indicate new language. Overstrikes indicate deleted language. For purposes of this Act, the vending machine retailer is responsible for compliance 30 1 with all provisions of this Act. The establishment in which the vending machine is placed 31 26.979.16 5 221 Underscores indicate new language. Overstrikes indicate deleted language. 2 is not a retailer or vending machine retailer, unless nicotine products are otherwise sold 1 3 at the establishment without the use of a vending machine. 2 4 Section 9. That a NEW SECTION be added to a NEW CHAPTER in title 10: 3 5 A licensee may not: 4 6 (1) Ship, or cause to be shipped, a nicotine product to an individual to be consumed 5 7 by the individual, except as otherwise provided in chapter 10-50C or under 6 8 provisions of House Bill 1220, as enacted by the One Hundred First Legislature; 7 9 (2) Sell, or offer to sell, a nicotine product to a person under the age of twenty-one 8 10 years; 9 11 (3) Sell, or offer to sell, a nicotine product in a vending machine, except as provided 10 12 in section 8 of this Act; 11 13 (4) Sell a nicotine product by phone, voice transmission, mail, internet, electronic-12 electronic-14 application-based service, curbside pick-up, or by any third-party means, except 13 15 as otherwise provided in chapter 10-50C or under provisions of House Bill 1220, 14 16 as enacted by the One Hundred First Legislature; 15 17 (5) Provide free samples of nicotine products to an individual; 16 18 (6) Purchase a nicotine product from a person that is not a licensed distributor or 17 19 licensed wholesaler under chapter 10-50 or under the provisions of House Bill 1220, 18 20 as enacted by the One Hundred First Legislature; or 19 21 (7) Sell or cause to be sold a nicotine product where the product, container, or 20 22 packaging includes a video game or mobile game capable of interfacing with an 21 23 external gaming system or mobile application, or has a gaming functionality. 22 24 A licensee is responsible for, and may be subject to enforcement action for, any 23 25 violation of this chapter committed by the licensee's employee, agency, agent, or clerk, 24 26 while acting within the scope of employment or agency. 25 27 For purposes of this section, a sale of a nicotine product from a vending machine 26 28 does not constitute a sale described under subdivision (4) of this section. 27 29 Section 10. That a NEW SECTION be added to a NEW CHAPTER in title 10: 28 30 A licensee shall keep complete records of all nicotine products held in the licensee's 29 31 inventory and all nicotine products sold by the licensee, in a manner set forth in rules 30 32 promulgated by the secretary pursuant to chapter 1-26. 31 26.979.16 33 26.979.17 6 221 Underscores indicate new language. Overstrikes indicate deleted language. The records must include information detailing the name, source, origin, 1 manufacturer, and address of the person supplying, and a copy of the purchase invoice, 2 of the nicotine products in the licensee's inventory. 3 The licensee shall preserve the records for three years. 4 If the records are not stored at the licensee's place of business, the licensee must, 5 upon request of the secretary, make the records available, in electronic form, within five 6 business days. 7 If the secretary determines that a licensee committed an unintentional error in the 8 record-keeping requirements of this section, the error does not constitute a violation for 9 purposes of sections 12 and 13 of this Act. 10 Nicotine products sold from, or contained in, a vending machine are inventory of 8 11 the licensed retailer, and are not the inventory of the establishment within which the 9 12 vending machine is placed. The requirements of this section apply only to the retailer, and 10 13 may be maintained at the retailer’s principal location. 11 14 The establishment within which the vending machine is placed is not subject to the 12 15 requirements of this section, but must allow access to the vending machine for purposes 13 16 of compliance with this chapter. 14 17 Section 11. That a NEW SECTION be added to a NEW CHAPTER in title 10: 15 18 The secretary may, during normal business hours, inspect the records and 16 19 premises of any licensee, and may conduct an investigation to determine whether the 17 20 licensee has violated any provision of this chapter or rule promulgated thereunder. The 18 21 secretary shall conduct an inspection or investigation under this section, in accordance 19 22 with rules promulgated by the secretary pursuant to chapter 1-26. 20 23 An establishment within which a vending machine is placed is not subject to the 21 24 provisions of this section solely for the purpose of determining whether the retailer has 22 25 violated any provisions of this chapter or any rule promulgated thereunder. 23 26 Section 12. That a NEW SECTION be added to a NEW CHAPTER in title 10: 24 27 If the secretary receives information of a violation by any licensee of any provision 25 28 of this chapter, the secretary must investigate the alleged violation. If there is substantial 26 29 evidence to support that a violation of any provision of this chapter has occurred, the 27 30 secretary must proceed in accordance with the provisions of this chapter. 28 31 26.979.17 7 221 Underscores indicate new language. Overstrikes indicate deleted language. If a licensee has been determined by the department to have violated any provision 29 1 of this chapter, the secretary must conduct an inspection of the licensee within six months 30 2 of the determination. 31 3 Section 13. That a NEW SECTION be added to a NEW CHAPTER in title 10: 32 26.979.16 7 221 Underscores indicate new language. Overstrikes indicate deleted language. 4 If a licensee is determined to have violated a provision of sections 8 to 10, inclusive, 1 5 of this Act or a provision of chapter 34-46, the secretary must assess a penalty according 2 6 to the following schedule: 3 7 (1) For a first violation, a fine not exceeding of five hundred dollars; 4 8 (2) For a second violation within a thirty-six-month period, a fine of one thousand 5 9 dollars; 6 10 (3) For a third violation within a thirty-six-month period, a fine of two thousand dollars, 7 11 and the secretary shall suspend the license for thirty days; 8 12 (4) For a fourth violation within a thirty-six-month period, a fine of five thousand five 9 13 hundred dollars, and the secretary shall revoke the license. 10 14 Except as otherwise provided in this section, the secretary may, in accordance with 11 15 chapter 1-26, revoke or suspend a license issued under this chapter for failure of the 12 16 licensee to comply with a provision of this chapter or rules promulgated thereunder, or if 13 17 the licensee is convicted of a felony. 14 18 A fine assessed under this section is due within thirty days of the department 15 19 providing notice of the fine to the licensee. 16 20 Section 14. That a NEW SECTION be added to a NEW CHAPTER in title 10: 17 21 If the license of a retailer is revoked pursuant to section 13 of this Act, the retailer 18 22 must: 19 23 (1) Destroy all nicotine products possessed by the retailer, at the time of the 20 24 revocation, in accordance with all state and federal requirements related to 21 25 hazardous materials; or 22 26 (2) Return all nicotine products to the licensed distributor or licensed wholesaler under 23 27 chapter 10-50 or under the provisions of House Bill 1220, as enacted by the One 24 28 Hundred First Legislature, from which the nicotine products were purchased by the 25 29 licensee. 26 30 The retailer shall submit verification of the destruction or return to the department, 27 31 in a manner provided in rules promulgated by the secretary. 28 32 26.979.17 8 221 Underscores indicate new language. Overstrikes indicate deleted language. A retailer who fails to comply with this section within sixty days from the revocation 29 1 of the license is subject to a fine of five thousand dollars, imposed by the department. 30 2 Section 15. That a NEW SECTION be added to a NEW CHAPTER in title 10: 31 26.979.16 8 221 Underscores indicate new language. Overstrikes indicate deleted language. 3 If a licensee is determined to have violated any provision of this chapter, the 1 4 licensee may appeal an action or decision of the secretary, in the same manner as provided 2 5 in chapter 1-26. 3 6 Section 16. That a NEW SECTION be added to a NEW CHAPTER in title 10: 4 7 The department shall promulgate rules, in accordance with chapter 1-26, to: 5 8 (1) Establish a procedure for an initial and a renewal license application under this 6 9 chapter, and the information required in the application; 7 10 (2) Provide for the manner in which nicotine products must be destroyed or returned 8 11 and the manner in which verification of the destruction or return must be 9 12 submitted; 10 13 (3) Provide the process for assessing and collecting fines under this chapter; 11 14 (4) Establish standards for the keeping of records, as required in section 10 of this Act; 12 15 and 13 16 (5) Establish a process for the inspection of records and premises, as authorized in 14 17 section 11 of this Act. 15 18 Section 17. That a NEW SECTION be added to a NEW CHAPTER in title 10: 16 19 A retailer who sells a nicotine product in this state, without a license issued 17 20 pursuant to this chapter, is subject to a fine of five hundred dollars, per day, imposed by 18 21 the department, except as provided in section 5 of this Act. 19 22 Section 18. That a NEW SECTION be added to a NEW CHAPTER in title 10: 20 23 There is created a nicotine enforcement fund. The department shall administer the 21 24 fund. The purpose of the fund is to defray expenses associated with the enforcement of 22 25 this chapter. 23 26 Moneys collected under this chapter must be forwarded to the state treasurer to 24 27 be deposited into the fund. Interest on moneys credited to the fund must remain in the 25 28 fund. 26 29 26.979.17 9 221 Underscores indicate new language. Overstrikes indicate deleted language. Expenditures from the fund must be budgeted through the general appropriation 27 1 bill. 28 2 Section 19. That § 34-46-2 be AMENDED: 29 3 34-46-2. The following actions are unlawful: 30 26.979.16 9 221 Underscores indicate new language. Overstrikes indicate deleted language. 4 (1) To knowingly sell or distribute a tobacco product nicotine product, as defined in 1 5 section 2 of this Act, to a person under the age of twenty-one; 2 6 (2) To purchase or attempt to purchase, to receive or attempt to receive, to possess, 3 7 or to consume a tobacco nicotine product, as defined in section 2 of this Act, if a 4 8 person is under the age of twenty-one; 5 9 (3) To purchase a tobacco product nicotine product, as defined in section 2 of this Act, 6 10 on behalf of, or to give a tobacco nicotine product to, any person under the age of 7 11 twenty-one; 8 12 (4) To sell cigarettes nicotine products, as defined in section 2 of this Act, other than 9 13 in an unopened package originating with the manufacturer and depicting the 10 14 warning labels required by federal law; 11 15 (5) To sell tobacco products nicotine products, as defined in section 2 of this Act, 12 16 through a vending machine located in a place other than a place that is open to 13 17 the public but to which persons under the age of twenty-one are denied access at 14 18 all times, except as otherwise provided in section 8 of this Act; 15 19 (6) To sell cigarettes or smokeless tobacco, or both, nicotine products, as defined in 16 20 section 2 of this Act, through a self-service display other than a display that is: 17 21 (a) A vending machine permitted under subdivision (5) of this section; or 18 22 (b) Located in a tobacco speciality store; or 19 23 (7) To distribute tobacco product samples samples of nicotine products, as defined in 20 24 section 2 of this Act, in or on a public street, sidewalk, or park that is within five 21 25 hundred feet of a playground, school, or other facility when the facility is being 22 26 used primarily by persons under the age of twenty-one. 23 27 Section 20. That § 34-46-2.2 be AMENDED: 24 28 34-46-2.2. A Except as otherwise provided in this section, a merchant shall 25 29 conspicuously post a notice, on the merchant's premises, stating in text at least one inch 26 30 in height, that "No no person under the age of 21twenty-one may be sold tobacco 27 31 products." 28 32 26.979.17 10 221 Underscores indicate new language. Overstrikes indicate deleted language. Any owner, lessee, or person having control of any cigarette vending machine shall 29 1 post, in a conspicuous place on each machine in use within the state, a warning which 30 2 shall be printed in bold type letters each of which shall be at least one-half inch high and 31 3 which shall be kept in easily legible form and repair stating: 32 4 "Any person under 21 years of age is forbidden by law to purchase cigarettes from 33 5 this machine." nicotine products, as defined in section 2 of this Act. 34 26.979.16 10 221 Underscores indicate new language. Overstrikes indicate deleted language. 6 For purposes of this section, the notice may be displayed electronically on a 1 7 vending machine. 2 8 Adjacent to the sign, the licensee shall display a valid license issued under this 3 9 chapter. A vending machine constitutes the point of sale for nicotine products sold from 4 10 the vending machine. 5 11 Section 21. That § 34-46-3 be AMENDED: 6 12 34-46-3. Each county state's attorney or a local law enforcement officer 7 13 designated by the state's attorney shall annually conduct unannounced, random 8 14 inspections at various locations where tobacco nicotine products, as defined in section 2 9 15 of this Act, are sold or distributed to ensure compliance with this chapter. Persons under 10 16 the age of twenty-one may be enlisted to test compliance with this chapter. Such persons 11 17 may be used to test compliance with this chapter only if the testing is conducted under 12 18 the supervision of the county state's attorney or a local law enforcement officer designated 13 19 by the state's attorney and written parental consent has been provided. Any other use of 14 20 persons under the age of twenty-one to test compliance with this chapter is unlawful and 15 21 the persons responsible for such use are subject to the penalties prescribed in § 34-46-5. 16 22 Any evidence of a violation of this chapter or sections 2 to 18, inclusive, of this Act, 17 23 must be submitted to the secretary of the Department of Revenue. 18 24 Section 22. That § 34-46-21 be AMENDED: 19 25 34-46-21. No person may sell a vapor nicotine product, as defined in section 2 of 20 26 this Act, other than in an unopened package originating with the manufacturer and 21 27 depicting the warning labels required by federal law, or sell a vapor product through self-22 self-28 service display other than a display that is: 23 29 (1) A vending machine permitted under subdivision 34-46-2(5); or 24 30 (2) Located in a tobacco specialty store. 25 31 A violation of person who violates this section is a Class 2 misdemeanor. A person 26 32 is not liable for more than one violation of this section on a single day subject to a fine of 27 33 26.979.17 11 221 Underscores indicate new language. Overstrikes indicate deleted language. two hundred fifty dollars, imposed by the Department of Revenue. Each violation is subject 28 1 to a fine. 29 2 Section 23. This Act is effective beginning January 1, 2027. 30 3

26.979.17 26.979.18 101st Legislative Session 221 2026 South Dakota Legislature Senate Bill 221 HOUSE ENGROSSED This bill has been extensively amended (hoghoused) and may no longer be consistent with the original intention of the sponsor. Introduced by: Senator Karr Underscores indicate new language. Overstrikes indicate deleted language. ENROLLED AN ACT ENTITLED An Act to regulate the retail sale of nicotine products, and to provide a penalty 1 therefor. 2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA: 3 Section 1. That § 10-1-28.2 be AMENDED: 4 10-1-28.2. All lists of taxpayers, licensees, or applicants compiled by the 5 Department of Revenue are confidential, except licensees which were licensed under the 6 provisions of chapter 10-47B, 32-6B, 32-6C, 32-7A, or 32-7B, or sections 2 to 18, 7 inclusive, of this Act. It is a Class 2 misdemeanor to disclose any such list except to the 8 extent necessary to carry out the official duties of the department. 9 Section 2. That a NEW SECTION be added to a NEW CHAPTER in title 10: 10 Terms used in this chapter mean: 11 (1) "Alternative nicotine product," a noncombustible product containing nicotine from 12 any source or a nicotine analog that is intended for human consumption, whether 13 chewed, absorbed, dissolved, ingested, inhaled, or consumed by any other means. 14 The term does not include any vapor product or any product regulated as a drug, 15 food, or device by the United States Food and Drug Administration under the Food, 16 Drug and Cosmetic Act, 21 U.S.C chapter 9 subchapter V (January 1, 2026); 17 (2) "Department," the Department of Revenue; 18 (3) "Licensee," a person licensed under the provisions of this chapter; 19 (4) "Nicotine analog," a substance that: 20 (a) Has a chemical structure substantially similar to the chemical structure of 21 nicotine; 22 (b) Has, or is represented to have, an effect on the central nervous system 23 similar to the chemical nicotine; and 24 26.979.17 26.979.18 2 221 Underscores indicate new language. Overstrikes indicate deleted language. SB221 ENROLLED (c) Is manufactured, formulated, sold, distributed, or marketed with the intent 1 to avoid the provisions of this chapter; 2 (5) "Nicotine product," an alternative nicotine product, tobacco product, or vapor 3 product; 4 (6) "Retailer," a person engaged in the business of selling a nicotine product to an 5 individual for any purpose other than resale; 6 (7) "Secretary," the secretary of the department; 7 (8) "Tobacco product," cigarettes, cigars, snuff, chewing tobacco, and any other 8 products made up or composed of tobacco in whole or in part; 9 (9) "Vapor product," a noncombustible product containing nicotine or a nicotine analog 10 that employs a heating element, power source, electronic circuit, or other 11 electronic, chemical, or mechanical means, regardless of shape or size, which can 12 be used to produce vapor or aerosol from nicotine or a nicotine analog in a solution. 13 The term includes, but is not limited to, any electronic cigarette, electronic cigar, 14 electronic cigarillo, electronic pipe, or similar product or device, and a consumable 15 nicotine or nicotine analog solution suitable for use in a vapor product, and any 16 component or part, whether sold with the product or separately. The term does 17 not include any product approved by the United States Food and Drug 18 Administration for sale as a tobacco cessation product and marketed and sold solely 19 for that purpose; 20 (10) "Vending machine," a device that dispenses nicotine products to an individual for 21 any purpose other than resale. The term does not include a self-service display; 22 and 23 (11) "Vending machine retailer," a person engaged in the business of selling a nicotine 24 product from vending machines. 25 Section 3. That a NEW SECTION be added to a NEW CHAPTER in title 10: 26 Any communication by, or on behalf of, the manufacturer, distributor, or retailer 27 of a nicotine product, which indicates that the product contains a nicotine analog, 28 constitutes presumptive evidence that the product contains a nicotine analog. 29 Section 4. That a NEW SECTION be added to a NEW CHAPTER in title 10: 30 A retailer shall secure a license under this chapter to sell a nicotine product in this 31 state. A separate application and a separate license are required for each place of business 32 26.979.17 26.979.18 3 221 Underscores indicate new language. Overstrikes indicate deleted language. SB221 ENROLLED of a retailer where a nicotine product is sold at retail. Each vending machine that sells a 1 nicotine product pursuant to section 8 of this Act requires a separate license. 2 An application for a license required under this section must be made to the 3 department, on forms prescribed by the secretary. The application must contain: 4 (1) The contact information and date of birth of the applicant; 5 (2) The physical address and mailing address of the place of business of the retailer; 6 (3) All past and current violations of state or federal law by the applicant relating to 7 the sale, possession, or transportation of a nicotine product; and 8 (4) Any information required by the department pursuant to rules promulgated under 9 this chapter. 10 For retailers where at least fifty percent of the annual gross income in a year for 11 the place of business is estimated to be generated from the sales of nicotine products, the 12 application must be accompanied by a fee of three hundred dollars. 13 For retailers where less than fifty percent of the annual gross income in a year for 14 the place of business is estimated to be generated from the sales of nicotine products, the 15 application must be accompanied by a fee of two hundred dollars. 16 A vending machine retailer that places a vending machine in a licensed 17 establishment pursuant to section 8 of this Act, shall pay a fee of one hundred dollars for 18 each vending machine. 19 Section 5. That a NEW SECTION be added to a NEW CHAPTER in title 10: 20 A license issued under section 4 of this Act is valid through December thirty-first 21 following the issuance of the license, unless the license is revoked sooner by the secretary 22 pursuant to this chapter. A license is valid if a pending application to renew a license is in 23 the possession of the department and if the pending application is not subject to denial 24 pursuant to section 7 of this Act. 25 A license issued under section 4 of this Act may be transferred. 26 The transferee shall make an application in the same manner as provided in section 27 4, and the application must be acted upon in the same manner as an original application. 28 No transfer of any license to another person may be granted until all taxes incurred 29 by the transferor as a result of the operation of the licensed premises, including municipal 30 and state sales and use taxes, state reemployment assistance or unemployment insurance 31 tax, or any other state tax, are paid or are not delinquent. No transfer of any license to 32 another person may be granted until all property taxes which are the liability of the 33 licensee levied on the licensed premises are paid or are not delinquent. 34 26.979.17 26.979.18 4 221 Underscores indicate new language. Overstrikes indicate deleted language. SB221 ENROLLED Section 6. That a NEW SECTION be added to a NEW CHAPTER in title 10: 1 A licensee may apply to the department for a renewal of the license within: 2 (1) Sixty days prior to the expiration of the license; or 3 (2) Three days after the expiration of the license. 4 For retailers where at least fifty percent of the annual gross income in a year for 5 the place of business is generated from the sales of nicotine products, the renewal 6 application must be accompanied by a fee of three hundred dollars. 7 For retailers where less than fifty percent of the annual gross income in a year for 8 the place of business is generated from the sales of nicotine products, the renewal 9 application must be accompanied by a fee of two hundred dollars. 10 A vending machine retailer that places a vending machine in a licensed 11 establishment pursuant to section 8 of this Act, shall pay a fee of one hundred dollars for 12 each vending machine. 13 Section 7. That a NEW SECTION be added to a NEW CHAPTER in title 10: 14 The department shall deny an application made under section 4 or 6 of this Act if 15 the applicant: 16 (1) Provides any false information; 17 (2) Is under the age of twenty-one years; 18 (3) Is not current on the remittance of all applicable state and local taxes; or 19 (4) Has been convicted of, or pled guilty to, a felony related to a financial crime, a 20 crime related to the sale or distribution of a nicotine product or alcohol, or a crime 21 related to a controlled substance, in this or any other jurisdiction, unless at least 22 three years have passed since satisfactory completion of the sentence or probation 23 imposed by the court in each felony conviction. 24 Section 8. That a NEW SECTION be added to a NEW CHAPTER in title 10: 25 A vending machine retailer may place a vending machine within an establishment 26 licensed pursuant to chapter 35-4, or within a licensed gaming establishment as defined 27 in § 42-7B-4, if the vending machine is placed in an area of the establishment in which 28 access is denied to persons under the age of twenty-one years. 29 A vending machine must be equipped with an age-verification system. Age 30 verification is required to purchase a nicotine product from the vending machine. 31 26.979.17 26.979.18 5 221 Underscores indicate new language. Overstrikes indicate deleted language. SB221 ENROLLED For purposes of this Act, the vending machine retailer is responsible for compliance 1 with all provisions of this Act. The establishment in which the vending machine is placed 2 is not a retailer or vending machine retailer, unless nicotine products are otherwise sold 3 at the establishment without the use of a vending machine. 4 Section 9. That a NEW SECTION be added to a NEW CHAPTER in title 10: 5 A licensee may not: 6 (1) Ship, or cause to be shipped, a nicotine product to an individual to be consumed 7 by the individual, except as otherwise provided in chapter 10-50C or under 8 provisions of House Bill 1220, as enacted by the One Hundred First Legislature; 9 (2) Sell, or offer to sell, a nicotine product to a person under the age of twenty-one 10 years; 11 (3) Sell, or offer to sell, a nicotine product in a vending machine, except as provided 12 in section 8 of this Act; 13 (4) Sell a nicotine product by phone, voice transmission, mail, internet, electronic-14 application-based electronic-application-based service, curbside pick-up, or by any third-party means, except 15 as otherwise provided in chapter 10-50C or under provisions of House Bill 1220, 16 as enacted by the One Hundred First Legislature; 17 (5) Provide free samples of nicotine products to an individual; 18 (6) Purchase a nicotine product from a person that is not a licensed distributor or 19 licensed wholesaler under chapter 10-50 or under the provisions of House Bill 1220, 20 as enacted by the One Hundred First Legislature; or 21 (7) Sell or cause to be sold a nicotine product where the product, container, or 22 packaging includes a video game or mobile game capable of interfacing with an 23 external gaming system or mobile application, or has a gaming functionality. 24 A licensee is responsible for, and may be subject to enforcement action for, any 25 violation of this chapter committed by the licensee's employee, agency, agent, or clerk, 26 while acting within the scope of employment or agency. 27 For purposes of this section, a sale of a nicotine product from a vending machine 28 does not constitute a sale described under subdivision (4) of this section. 29 Section 10. That a NEW SECTION be added to a NEW CHAPTER in title 10: 30 A licensee shall keep complete records of all nicotine products held in the licensee's 31 inventory and all nicotine products sold by the licensee, in a manner set forth in rules 32 promulgated by the secretary pursuant to chapter 1-26. 33 26.979.17 26.979.18 6 221 Underscores indicate new language. Overstrikes indicate deleted language. SB221 ENROLLED The records must include information detailing the name, source, origin, 1 manufacturer, and address of the person supplying, and a copy of the purchase invoice, 2 of the nicotine products in the licensee's inventory. 3 The licensee shall preserve the records for three years. 4 If the records are not stored at the licensee's place of business, the licensee must, 5 upon request of the secretary, make the records available, in electronic form, within five 6 business days. 7 If the secretary determines that a licensee committed an unintentional error in the 8 record-keeping requirements of this section, the error does not constitute a violation for 9 purposes of sections 12 and 13 of this Act. 10 Nicotine products sold from, or contained in, a vending machine are inventory of 11 the licensed retailer, and are not the inventory of the establishment within which the 12 vending machine is placed. The requirements of this section apply only to the retailer, and 13 may be maintained at the retailer’s principal location. 14 The establishment within which the vending machine is placed is not subject to the 15 requirements of this section, but must allow access to the vending machine for purposes 16 of compliance with this chapter. 17 Section 11. That a NEW SECTION be added to a NEW CHAPTER in title 10: 18 The secretary may, during normal business hours, inspect the records and 19 premises of any licensee, and may conduct an investigation to determine whether the 20 licensee has violated any provision of this chapter or rule promulgated thereunder. The 21 secretary shall conduct an inspection or investigation under this section, in accordance 22 with rules promulgated by the secretary pursuant to chapter 1-26. 23 An establishment within which a vending machine is placed is not subject to the 24 provisions of this section solely for the purpose of determining whether the retailer has 25 violated any provisions of this chapter or any rule promulgated thereunder. 26 Section 12. That a NEW SECTION be added to a NEW CHAPTER in title 10: 27 If the secretary receives information of a violation by any licensee of any provision 28 of this chapter, the secretary must investigate the alleged violation. If there is substantial 29 evidence to support that a violation of any provision of this chapter has occurred, the 30 secretary must proceed in accordance with the provisions of this chapter. 31 26.979.17 26.979.18 7 221 Underscores indicate new language. Overstrikes indicate deleted language. SB221 ENROLLED If a licensee has been determined by the department to have violated any provision 1 of this chapter, the secretary must conduct an inspection of the licensee within six months 2 of the determination. 3 Section 13. That a NEW SECTION be added to a NEW CHAPTER in title 10: 4 If a licensee is determined to have violated a provision of sections 8 to 10, inclusive, 5 of this Act or a provision of chapter 34-46, the secretary must assess a penalty according 6 to the following schedule: 7 (1) For a first violation, a fine of five hundred dollars; 8 (2) For a second violation within a thirty-six-month period, a fine of one thousand 9 dollars; 10 (3) For a third violation within a thirty-six-month period, a fine of two thousand dollars, 11 and the secretary shall suspend the license for thirty days; 12 (4) For a fourth violation within a thirty-six-month period, a fine of five thousand five 13 hundred dollars, and the secretary shall revoke the license. 14 Except as otherwise provided in this section, the secretary may, in accordance with 15 chapter 1-26, revoke or suspend a license issued under this chapter for failure of the 16 licensee to comply with a provision of this chapter or rules promulgated thereunder, or if 17 the licensee is convicted of a felony. 18 A fine assessed under this section is due within thirty days of the department 19 providing notice of the fine to the licensee. 20 Section 14. That a NEW SECTION be added to a NEW CHAPTER in title 10: 21 If the license of a retailer is revoked pursuant to section 13 of this Act, the retailer 22 must: 23 (1) Destroy all nicotine products possessed by the retailer, at the time of the 24 revocation, in accordance with all state and federal requirements related to 25 hazardous materials; or 26 (2) Return all nicotine products to the licensed distributor or licensed wholesaler under 27 chapter 10-50 or under the provisions of House Bill 1220, as enacted by the One 28 Hundred First Legislature, from which the nicotine products were purchased by the 29 licensee. 30 The retailer shall submit verification of the destruction or return to the department, 31 in a manner provided in rules promulgated by the secretary. 32 26.979.17 26.979.18 8 221 Underscores indicate new language. Overstrikes indicate deleted language. SB221 ENROLLED A retailer who fails to comply with this section within sixty days from the revocation 1 of the license is subject to a fine of five thousand dollars, imposed by the department. 2 Section 15. That a NEW SECTION be added to a NEW CHAPTER in title 10: 3 If a licensee is determined to have violated any provision of this chapter, the 4 licensee may appeal an action or decision of the secretary, in the same manner as provided 5 in chapter 1-26. 6 Section 16. That a NEW SECTION be added to a NEW CHAPTER in title 10: 7 The department shall promulgate rules, in accordance with chapter 1-26, to: 8 (1) Establish a procedure for an initial and a renewal license application under this 9 chapter, and the information required in the application; 10 (2) Provide for the manner in which nicotine products must be destroyed or returned 11 and the manner in which verification of the destruction or return must be 12 submitted; 13 (3) Provide the process for assessing and collecting fines under this chapter; 14 (4) Establish standards for the keeping of records, as required in section 10 of this Act; 15 and 16 (5) Establish a process for the inspection of records and premises, as authorized in 17 section 11 of this Act. 18 Section 17. That a NEW SECTION be added to a NEW CHAPTER in title 10: 19 A retailer who sells a nicotine product in this state, without a license issued 20 pursuant to this chapter, is subject to a fine of five hundred dollars, per day, imposed by 21 the department, except as provided in section 5 of this Act. 22 Section 18. That a NEW SECTION be added to a NEW CHAPTER in title 10: 23 There is created a nicotine enforcement fund. The department shall administer the 24 fund. The purpose of the fund is to defray expenses associated with the enforcement of 25 this chapter. 26 Moneys collected under this chapter must be forwarded to the state treasurer to 27 be deposited into the fund. Interest on moneys credited to the fund must remain in the 28 fund. 29 26.979.17 26.979.18 9 221 Underscores indicate new language. Overstrikes indicate deleted language. SB221 ENROLLED Expenditures from the fund must be budgeted through the general appropriation 1 bill. 2 Section 19. That § 34-46-2 be AMENDED: 3 34-46-2. The following actions are unlawful: 4 (1) To knowingly sell or distribute a tobacco product nicotine product, as defined in 5 section 2 of this Act, to a person under the age of twenty-one; 6 (2) To purchase or attempt to purchase, to receive or attempt to receive, to possess, 7 or to consume a tobacco nicotine product, as defined in section 2 of this Act, if a 8 person is under the age of twenty-one; 9 (3) To purchase a tobacco product nicotine product, as defined in section 2 of this Act, 10 on behalf of, or to give a tobacco nicotine product to, any person under the age of 11 twenty-one; 12 (4) To sell cigarettes nicotine products, as defined in section 2 of this Act, other than 13 in an unopened package originating with the manufacturer and depicting the 14 warning labels required by federal law; 15 (5) To sell tobacco products nicotine products, as defined in section 2 of this Act, 16 through a vending machine located in a place other than a place that is open to 17 the public but to which persons under the age of twenty-one are denied access at 18 all times, machine, except as otherwise provided in section 8 of this Act; 19 (6) To sell cigarettes or smokeless tobacco, or both, nicotine products, as defined in 20 section 2 of this Act, through a self-service display other than a display that is: 21 (a) A vending machine permitted under subdivision (5) of this section; display; or 22 (b) Located in a tobacco speciality store; or 23 (7) To distribute tobacco product samples samples of nicotine products, as defined in 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 Section 20. That § 34-46-2.2 be AMENDED: 28 34-46-2.2. A Except as otherwise provided in this section, a merchant shall 29 conspicuously post a notice, on the merchant's premises, stating in text at least one inch 30 in height, that "No no person under the age of 21twenty-one twenty-one may be sold tobacco 31 products." 32 26.979.17 10 221 Underscores indicate new language. Overstrikes indicate deleted language. Any owner, lessee, or person having control of any cigarette vending machine shall 1 post, in a conspicuous place on each machine in use within the state, a warning which 2 shall be printed in bold type letters each of which shall be at least one-half inch high and 3 which shall be kept in easily legible form and repair stating: 4 "Any person under 21 years of age is forbidden by law to purchase cigarettes from 5 this machine." nicotine products, as defined in section 2 of this Act. 6 For purposes of this section, the notice may be displayed electronically on a 7 vending machine. 8 Adjacent to the sign, the licensee shall display a valid license issued under this 9 chapter. A vending machine constitutes the point of sale for nicotine products sold from 10 the vending machine. 11 26.979.18 10 221 SB221 ENROLLED Section 21. That § 34-46-3 be AMENDED: 12 34-46-3. Each county state's attorney or a local law enforcement officer 13 designated by the state's attorney shall annually conduct unannounced, random 14 inspections at various locations where tobacco nicotine products, as defined in section 2 15 of this Act, are sold or distributed to ensure compliance with this chapter. Persons under 16 the age of twenty-one may be enlisted to test compliance with this chapter. Such persons 17 may be used to test compliance with this chapter only if the testing is conducted under 18 the supervision of the county state's attorney or a local law enforcement officer designated 19 by the state's attorney and written parental consent has been provided. Any other use of 20 persons under the age of twenty-one to test compliance with this chapter is unlawful and 21 the persons responsible for such use are subject to the penalties prescribed in § 34-46-5. 22 Any evidence of a violation of this chapter or sections 2 to 18, inclusive, of this Act, 23 must be submitted to the secretary of the Department of Revenue. 24 Section 22. That § 34-46-21 be AMENDED: 25 34-46-21. No person may sell a vapor nicotine product, as defined in section 2 of 26 this Act, other than in an unopened package originating with the manufacturer and 27 depicting the warning labels required by federal law, or sell a vapor product through self-28 service display other than a display that is: 29 (1) law. A vending machine permitted under subdivision 34-46-2(5); or 30 (2) Located in a tobacco specialty store. 31 A violation of person who violates this section is a Class 2 misdemeanor. A person 32 is not liable for more than one violation of this section on a single day subject to a fine of 33 26.979.17 11 221 Underscores indicate new language. Overstrikes indicate deleted language. two hundred fifty dollars, imposed by the Department of Revenue. Each violation is subject 1 to a fine. 2 Section 23. This Act is effective beginning January 1, 2027. 3 26.979.18 11 221 SB221 ENROLLED An Act to regulate the retail sale of nicotine products, and to provide a penalty therefor. I certify that the attached Act originated in the: Senate as Bill No. 221 Secretary of the Senate President of the Senate Attest: Secretary of the Senate Speaker of the House Attest: Chief Clerk of the House Senate Bill No. 221 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