2021 tax changes midyear update for tobacco and vape sellers


60 minutes


Understanding the PACT Act and other changes

Like retailers and sellers in most industries, tobacco and vape sellers adjusted in 2020 to accommodate for COVID-19 impacts. While sales volume didn’t significantly change, sales shifted to a more ecommerce-centric model. Adding fuel to this already complex fire, modifications to the Prevent All Cigarette Trafficking (PACT) Act were passed on December 27, 2020. These changes went into effect extremely quickly on March 27, 2021, leaving sellers and states very little time to prepare. The cost of being noncompliant can quickly snowball as monthly fees are assessed state by state. 

These changes aren’t all tobacco and vape sellers had to wrangle in the first half of 2021. The number of states adding excise tax for various tobacco products continued to expand at an increasingly rapid pace. These tax calculation methods are all very different by state and the rates are typically very high. Understanding the distinctions is challenging, even for industry veterans. 

Hear tobacco tax expert Bubba Lange walk through the following topics:

  • What’s specifically required under the PACT Act   
  • How to identify PACT Act noncompliance risks   
  • Nuances to other new legislation passed this year  
  • Tips and best practices to help ensure compliance
Watch on-demand
About the speaker

Bubba Lange
VP of Solutions Engineering, Avalara

Bubba has been with Avalara, including Zytax, for 15 years. He currently serves as vice president of Solutions Engineering. Prior to joining Avalara, Bubba was a Platinum SD, MM, and tax applications consultant with SAP for nine years. He’s also held roles at Coca-Cola, FMC Corporation, and the CIA. He has more than 37 years of experience with indirect excise tax, sales and use tax, and ERP implementation as well as supply chain automation expertise in discrete manufacturing, retail, and oil and gas industries.