                                 CODE OF VIRGINIA

DISTRIBUTOR&#8217;S OR REMOTE RETAIL SELLER&#8217;S LICENSE; LIQUID NICOTINE AND
NICOTINE VAPOR PRODUCTS LICENSE; PENALTIES (§ 58.1-1021.04:1)

A. 1.  No person shall engage in the business of selling or dealing in tobacco
products as a distributor in the Commonwealth without first having received a
separate license from the Department for each location or place of business.
Each application for a distributor&#8217;s license shall be accompanied by a fee
to be prescribed by the Department. Every application for such license shall be
made on a form prescribed by the Department and the following information shall
be provided on the application:
			a. The name and address of the applicant. If the applicant is a firm,
partnership, or association, the name and address of each of its members shall
be provided. If the applicant is a corporation, the name and address of each of
its principal officers shall be provided;
			b. The address of the applicant&#8217;s principal place of business;
			c. The place or places where the business to be licensed is to be conducted;
and
			d. Such other information as the Department may require for the purpose of
the administration of this article.

   2. A person outside the Commonwealth who ships or transports tobacco products
   to retailers in the Commonwealth, to be sold by those retailers, may make
   application for license as a distributor, be granted such a license by the
   Department, and thereafter be subject to all the provisions of this article.
   Once a license is granted pursuant to this section, such person shall be
   entitled to act as a licensed distributor and, unless such person maintains a
   registered agent pursuant to Chapter 9 (&#xA7; 13.1-601 et seq.), 10 (&#xA7;
   13.1-801 et seq.), 12 (&#xA7; 13.1-1000 et seq.), or 14 (&#xA7; 13.1-1200 et
   seq.) of Title 13.1 or Chapter 2.1 (&#xA7; 50-73.1 et seq.) or 2.2 (&#xA7;
   50-73.79 et seq.) of Title 50, shall be deemed to have appointed the Clerk of
   the State Corporation Commission as the person&#8217;s agent for the purpose
   of service of process relating to any matter or issue involving the person and
   arising under the provisions of this article.
   				The Department shall conduct a background investigation, to include a
   Virginia criminal history records search, and fingerprints of the applicant,
   or the responsible principals, managers, and other persons engaged in handling
   tobacco products at the licensable locations, that shall be submitted to the
   Federal Bureau of Investigation if the Department deems a national criminal
   records search necessary, on applicants for licensure as tobacco products
   distributors. The Department may refuse to issue a distributor&#8217;s license
   or may suspend, revoke, or refuse to renew a distributor&#8217;s license
   issued to any person, partnership, corporation, limited liability company, or
   business trust if it determines that the principals, managers, and other
   persons engaged in handling tobacco products at the licensable location of the
   applicant have been (i) found guilty of any fraud or misrepresentation in any
   connection; (ii) convicted of robbery, extortion, burglary, larceny,
   embezzlement, fraudulent conversion, gambling, perjury, bribery, treason, or
   racketeering; or (iii) convicted of a felony. Anyone who knowingly and
   willfully falsifies, conceals, or misrepresents a material fact or knowingly
   and willfully makes a false, fictitious, or fraudulent statement or
   representation in any application for a distributor&#8217;s license to the
   Department, is guilty of a Class 1 misdemeanor. The Department may establish
   an application or renewal fee not to exceed $750 to be retained by the
   Department to be applied to the administrative and other costs of processing
   distributor&#8217;s license applications, conducting background
   investigations, and issuing distributor&#8217;s licenses. Any amount collected
   pursuant to this section in excess of such costs as of June 30 in
   even-numbered years shall be reported to the State Treasurer and deposited
   into the state treasury.

   3. No person inside or outside the Commonwealth shall make a remote retail
   sale of cigars or pipe tobacco to consumers in the Commonwealth without (i)
   completing an application for and being granted a license as a remote retail
   seller; (ii) determining whether economic nexus activity thresholds have been
   met to register for a dealer&#8217;s certificate under &#xA7; 58.1-613; (iii)
   if economic nexus thresholds are met, collecting and remitting the excise tax
   pursuant to subsection A of &#xA7; 58.1-1021.02; (iv) providing for age
   verification through an independent, third-party age verification service that
   compares information available from a commercially available database, or
   aggregate of databases, that is regularly used by government agencies and
   businesses for the purpose of age and identity verification to the personal
   information entered by the individual during the ordering process that
   establishes that the individual is of age; and (v) if economic nexus
   thresholds are met and excise tax is being remitted using the actual cost list
   method to calculate the excise tax, providing the remote retail seller&#8217;s
   certified actual cost list to the Department for each SKU to be offered for
   remote retail sale in the subsequent calendar year. The actual cost list shall
   be updated quarterly as new SKUs are added to a remote retail seller&#8217;s
   inventory. New SKUs will be added using the actual cost first paid for the
   SKU.

B. Upon receipt of an application in proper form and payment of the required
license fee, the Department shall, unless otherwise provided by this article,
issue to the applicant a license, which shall permit the licensee to engage in
business as a distributor at the place of business shown on the license. Each
license, or a copy thereof, shall be prominently displayed on the premises
covered by the license. No license shall be transferable to any other person.
Distributor&#8217;s licenses issued pursuant to this section shall be valid for
a period of three years from the date of issue unless revoked by the Department
in the manner provided herein. The Department may at any time revoke the license
issued to any distributor who is found guilty of violating or noncompliance with
any of the provisions of this chapter or any of the rules of the Department
adopted and promulgated under authority of this chapter. The Department shall
suspend or revoke the license issued to any distributor who is found guilty of a
second or subsequent violation of subsection A or B of &#xA7; 18.2-371.2.

C. 1.  No person shall engage in the business of selling or dealing liquid
nicotine or nicotine vapor products or shipping or transporting liquid nicotine
or nicotine vapor products to retailers in the Commonwealth, to be sold by those
retailers, as a manufacturer, distributor, or retail dealer in the Commonwealth
without first having received a separate license from the Department for each
location or place of business, and any person who violates such prohibition
shall be subject to a penalty of $400 in addition to any other applicable taxes
or fees. Each application for a manufacturer&#8217;s, distributor&#8217;s, or
retail dealer&#8217;s liquid nicotine and nicotine vapor products license shall
be accompanied by a fee to be prescribed by the Department. Any retail dealer
who holds an approved Retail Sales and Use Tax Exemption Certificate for Stamped
Cigarettes Purchased for Resale or an Other Tobacco Products (OTP)
Distributor&#8217;s License issued by the Department shall not be required to
obtain a license under this subsection. Every application for such liquid
nicotine and nicotine vapor products license shall be made on a form prescribed
by the Department and the following information shall be provided on the
application:
			a. The name and address of the applicant. If the applicant is a firm,
partnership, or association, the name and address of each of its members shall
be provided. If the applicant is a corporation, the name and address of each of
its principal officers shall be provided;
			b. The address of the applicant&#8217;s principal place of business;
			c. The place or places where the business to be licensed is to be conducted;
and
			d. Such other information as the Department may require for the purpose of
the administration of this article.

   2. The Department shall conduct a background investigation, to include a
   Virginia criminal history records search of the applicant, or the responsible
   principals and managers of liquid nicotine and nicotine vapor products at the
   licensable locations that shall be submitted to the Federal Bureau of
   Investigation if the Department deems a national criminal records search
   necessary, on applicants for licensure as a liquid nicotine and nicotine vapor
   products manufacturer, distributor, or retailer, as applicable. The Department
   may refuse to issue a license or may suspend, revoke, or refuse to renew a
   license issued to any person, partnership, corporation, limited liability
   company, or business trust if it determines that the principals and managers
   at the licensable location of the applicant have been (i) found guilty of any
   fraud or misrepresentation in any connection; (ii) convicted of robbery,
   extortion, burglary, larceny, embezzlement, fraudulent conversion, gambling,
   perjury, bribery, treason, tax evasion, or racketeering; or (iii) convicted of
   a felony within the last five years. Anyone who knowingly and willfully
   falsifies, conceals, or misrepresents a material fact or knowingly and
   willfully makes a false, fictitious, or fraudulent statement or representation
   in any application for a license to the Department is guilty of a Class 1
   misdemeanor. The Department may establish an application or renewal fee to be
   retained by the Department to be applied to the administrative and other costs
   of processing license applications, conducting background investigations, and
   issuing licenses. Any amount collected pursuant to this section in excess of
   such costs as of June 30 in even-numbered years shall be reported to the State
   Treasurer and deposited into the state treasury.

   3. Upon receipt of an application in proper form and payment of the required
   license fee, the Department shall, unless otherwise provided by this article,
   issue to the applicant a liquid nicotine and nicotine vapor products license,
   which shall permit the licensee to engage in business as a manufacturer,
   distributor, or retail dealer at the place of business shown on the license.
   Each license, or a copy thereof, shall be prominently displayed on the
   premises covered by the license. No license shall be transferable to any other
   person, partnership, corporation, limited liability company, or business
   trust; however, the Department may grant a temporary license to any applicant
   that has purchased the business of any manufacturer, distributor, or retail
   dealer licensed pursuant to this section while such applicant&#8217;s
   application for licensure is pending. Licenses, other than temporary licenses,
   issued pursuant to this section shall be valid for two years from the date of
   issue unless revoked by the Department in the manner provided in this section.
   The Department may at any time suspend or revoke the approved license, permit,
   or registration issued in accordance with this subsection to any person who is
   found guilty of violating or noncompliance with any of the provisions of this
   chapter or any of the rules of the Department adopted and promulgated under
   authority of this chapter. Any person authorized to sell liquid nicotine or
   nicotine vapor products pursuant to this subsection shall, as a condition of
   renewing or extending an approved license, permit, or registration, be
   required to submit to the Department an accurate record of any taxes paid on
   liquid nicotine pursuant to &#xA7; 58.1-1021.02.

   4. No person shall make a sale of liquid nicotine or nicotine vapor products
   (i) to any person who has not attained the legal age for purchasing liquid
   nicotine or nicotine vapor products and (ii) without a valid liquid nicotine
   and nicotine vapor products license issued pursuant to this subsection. Any
   person who is found guilty of violating or noncompliance with this subdivision
   shall be subject to the following penalties:
   				a. For the first violation in a 36-month period, a penalty of no less than
   $1,000;
   				b. For a second violation in a 36-month period, a penalty of no less than
   $5,000 and a 30-day suspension of the liquid nicotine and nicotine vapor
   products license. If the person is found to be in violation of clause (i) of
   this subdivision 4, such person shall be required to verify that any consumer
   who appears to be under 30 years of age is of legal age by verifying such
   consumer&#8217;s government-issued photographic identification using fraud
   detection software, technology, or a scanner that confirms the authenticity of
   such identification; and
   				c. For a third violation in a 36-month period, a penalty of no less than
   $10,000, revocation of the liquid nicotine and nicotine vapor products
   license, and ineligibility to possess a liquid nicotine and nicotine vapor
   products license for a period of three years from the date of the most recent
   violation.

   5. No person inside or outside the Commonwealth shall make a retail sale of
   liquid nicotine and nicotine vapor products without verifying that the
   consumer is of legal age by examining from any person who appears to be under
   30 years of age a government-issued photographic identification that
   establishes that the person is of legal age or providing for age verification
   through an independent age verification service that compares information
   available from a commercially available database, or aggregate of databases,
   that is regularly used by government agencies and businesses for the purpose
   of age and identity verification to the personal information entered by the
   individual during the ordering process that establishes that the individual is
   of age.

   6. For any transaction between a distributor and a retail dealer involving
   liquid nicotine or nicotine vapor products, both the distributor and the
   retail dealer shall maintain and retain records of any invoice or sales
   receipt involved that shall include itemized lists of the types of products
   included in such transaction, the tax due on each product pursuant to
   subsection B of &#xA7; 58.1-1021.02, and the total amount of taxes paid. Such
   records shall be produced and provided to the Department as necessary for
   auditing, compliance, and enforcement purposes.

D. The Department shall compile and maintain a current list of licensed
distributors and remote retail sellers of tobacco products and of manufacturers,
distributors, and retail dealers of liquid nicotine and nicotine vapor products.
The list shall be updated on a monthly basis and published on the
Department&#8217;s website, available to any interested party.

HISTORY: 2005, c. 71; 2022, cc. 738, 779; 2024, cc. 796, 821; 2025, cc. 595,
596.