Electronic Nicotine Delivery System (ENDS) & Tax on Consumable Material Frequently Asked Questions

This guidance document is advisory in nature but is binding on the Nebraska Department of Revenue (DOR) until amended. A guidance document does not include internal procedural documents that only affect the internal operations of DOR and does not impose additional requirements or penalties on regulated parties or include confidential information or rules and regulations made in accordance with the Administrative Procedure Act. If you believe that this guidance document imposes additional requirements or penalties on regulated parties, you may request a review of the document.

This guidance document may change with updated information or added examples. DOR recommends you do not print this document. Instead, sign up for the subscription service at revenue.nebraska.gov to get updates on your topics of interest.

Consumable material means any liquid solution or other material containing nicotine that is depleted as an electronic nicotine delivery system is used.

Electronic nicotine delivery system means any product or device containing nicotine, tobacco, or tobacco derivatives that employs a heating element, power source, electronic circuit, or other electronic, chemical, or mechanical means, regardless of shape or size, to simulate smoking by delivering the nicotine, tobacco, or tobacco derivatives in vapor, fog, mist, gas, or aerosol form to a person inhaling from the product or device. Electronic nicotine delivery system includes:
Any substance containing nicotine, tobacco, or tobacco derivatives, whether sold separately or sold in combination with a product or device that is intended to deliver to a person nicotine, tobacco, or tobacco derivatives in vapor, fog, mist, gas, or aerosol form;
Any product or device marketed, manufactured, distributed, or sold as an electronic cigarette, electronic cigar, electronic cigarillo, electronic pipe, electronic hookah, or similar products, names, descriptors, or devices; and
Any component, part, or accessory of such a product or device that is used during operation of the product or device when sold in combination with any substance containing nicotine, tobacco, or tobacco derivatives.
Electronic nicotine delivery system does not include the following:

An alternative nicotine product, cigarette, cigar, or other tobacco product, or any product regulated as a drug or device by the United States Food and Drug Administration under Chapter V of the Federal Food, Drug, and Cosmetic Act; or
Any component, part, or accessory of such a product or device that is used during operation of the product or device when not sold in combination with any substance containing nicotine, tobacco, or tobacco derivatives.

The first owner of tobacco products, including ENDS, is liable for the excise tax. “First owner” means any person who is engaged in the business of selling tobacco products in this state who brings or causes tobacco products to be brought into this state for sale in this state; who makes, manufacturers, or fabricates and sells tobacco products in this state; who is an out-of-state supplier who ships or transports tobacco products to retailers in this state and obtains a license; or an out-of-state retailer who sells ENDS to consumers within Nebraska.

The tax rate of ENDS containing three milliliters or less of consumable material is five cents per milliliter. The tax rate of ENDS containing greater than three milliliters of consumable material is ten percent of the purchase price paid by the first owner or the price at which the first owner who made, manufactured, or fabricated the ENDS sells the item to others.

Yes, refill inserts are subject to the excise tax.

The tax is imposed on consumable material contained in each ENDS rather than the total quantity of the package.

No. The consumable vapor product must contain nicotine to be subject to the excise tax.

Complete Nebraska Cigarette and Tobacco Products License and Registration Application, Form 20CT, to apply for a Tobacco Products License.

Yes, there is a $25 fee.

The tax on consumable material is effective January 1, 2024.

No, there is no floor tax.

The filing frequency is monthly, and the due date of the return is the 10th of the month following the end of the filing period.

Taxpayers must complete Nebraska Tobacco Products Tax Return for Products Other than Cigarettes, Form 56, and accompanying schedules (Form 56A, Schedules I- IV) on a monthly basis.

Yes, taxpayers must file Form 56 even if there are no taxable purchases or sales for the filing period.

Electronic filing is not available. The Form 56 must be mailed.

No.

A retailer must register, report, and pay the tax on consumable material if the consumable material was purchased from a distributor or manufacturer who does not have a Tobacco Products License.

Yes, a retailer manufacturing consumable material in Nebraska must register for a license. The retailer must report, and pay the tax on consumable material manufactured and sold in Nebraska.

Yes, an out-of-state retailer who sells consumable material to consumers within Nebraska must register, report, and pay the tax.

A list of Nebraska Licensed Wholesalers of Tobacco Products Other than Cigarettes can be found on the Cigarette & Other Tobacco Products webpage.

There is currently no flavor ban for ENDS products under state law.

All books, records, and other documents must be preserved for a period of at least three years after the due date of the tax return.

Yes. Books, records, and other documents demonstrating consumable material was purchased from a licensed wholesaler must be retained.

At any time during usual business hours, DOR may inspect the premises and records to determine if the location is in full compliance with the Tobacco Products Act.

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