Next year, the residents of South Dakota will once again be able to purchase cigars from online and catalog retailers and have them shipped into the state.
Yesterday, Gov. Kristi Noem signed H.B. 1098 into law, which will go into effect on Jan. 1, 2022. The bill allows for cigar retailers to ship cigars to consumers in the state—something that is currently not legal—with a few provisions.
Retailers will be required to perform age verification—either by asking for a copy of the buyer’s identification card or via an age verification service—to ensure that the buyer is at least 21-years-old. Furthermore, the package that the cigars are shipped in must state that the package will require a signature of someone at 21-years-old and the shipping company must obtain said signature.
The cigar retailer and shipping company are both subject to fines of $1,000 for the first violation and $2,000 for a subsequent violation.
In addition, cigar companies will be required to remit the state’s tax of 35 percent of the wholesale price for all purchases.
Update: The original version of this article indicated that South Dakota’s tax on cigars is 4.5 percent, that is the sales tax. The excise tax on OTP is 35 percent.