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FAQ

ANSWERS

  • What Cigarettes are considered "Units Sold"?

Pursuant to A.R.S. § 44-7101(2)(k), "Units sold" means the number of individual cigarettes sold in the state by the applicable tobacco product manufacturer (whether directly or through a distributor, retailer or similar intermediary or intermediaries) during the year in question, as measured by State tobacco excise taxes collected or precollected by the state and tribal luxury taxes collected or precollected by an indian tribe. The department of revenue shall promulgate such regulations as are necessary to ascertain the amount of state excise tax paid any such tax collected or precollected on the cigarettes of such tobacco product manufacturer for each year. The term units sold does not include cigarettes described in section 42-3304, subsection A, paragraphs 2 and 3.

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  • What kinds of tobacco products are subject to A.R.S. § 44-7111?

A.R.S. § 44-7111 applies to all "Cigarettes," as defined in the Legislation. "Cigarettes" are defined as:

Any product that contains nicotine, is intended to be burned or heated under ordinary conditions of use, and consists of or contains (1) any roll of tobacco wrapped in paper or in any substance not containing tobacco; or (2) tobacco, in any form, that is functional in the product, which, because of its appearance, the type of tobacco used in the filler, or its packaging and labeling, is likely to be offered to, or purchased by, consumers as a cigarette; or (3) any roll of tobacco which, because of its appearance, the type of tobacco used in the filler, or its packaging and labeling, is likely to be offered to, or purchased by, consumers as a cigarette described in clause (1) of this definition. The term "cigarette" includes "roll-your-own" (i.e., any tobacco which, because of its appearance, type, packaging, or labeling is suitable for use and likely to be offered to, or purchased by, consumers as tobacco for making cigarettes). For purposes of this definition of "cigarette," 0.09 ounces of "roll-your-own" tobacco shall constitute one individual "cigarette."

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  • Does A.R.S. § 44-7111 apply to Smokeless Tobacco, Pipe Tobacco, and Cigars?

A.R.S. § 44-7111 does not apply to tobacco products other than "Cigarettes", as defined above. Thus, does not apply to smokeless tobacco, cigars, and pipe tobacco, as long as such products do not meet the definition of "Cigarette." A product that meets the definition of a "Cigarette" is subject to the law, regardless of how the product is labeled. Other tobacco laws apply to all tobacco products or to specific tobacco products in addition to cigarettes. For example, the PACT Act applies to cigarettes, roll your own cigarettes, and smokeless tobacco but not to pipe tobacco or cigars, while the prohibition on selling tobacco products to minors applies to “cigars, cigarettes or cigarette papers or smoking or chewing tobacco of any kind.”  A.R.S. § 13-3622(A).

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  • What is the Arizona Cigarette Directory?

The Arizona Cigarette Directory (or the "Directory") is mandated by A.R.S. § 44-7111(3)(b), which requires the Attorney General to develop and publish on the Attorney General's website a Directory of Cigarettes approved for stamping and sale. The Directory lists all Tobacco Product Manufacturers that the Attorney General has determined have satisfied the criteria set forth in A.R.S. § 44-7111, and the Brand Families listed in the certifications provided by such manufacturers. For more information see the Arizona Cigarette Directory tab.

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  • What is the status of Cigarettes that are not included in the Directory?

A.R.S. § 44-7111(3)(c) provides that: "It shall be unlawful for any person (1) to affix a stamp to a package or other container of Cigarettes of a Tobacco Product Manufacturer or Brand Family not included in the Directory or (2) to sell, offer or possess for sale, in this State, Cigarettes of a Tobacco Product Manufacturer or Brand Family not included in the Directory."

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  • What is a Tobacco Product Manufacturer?

"Tobacco Product Manufacturer" has the same meaning prescribed in A.R.S. § 44-7101.

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  • What is the difference between a Participating Manufacturer and a Nonparticipating Manufacturer?

A "Participating Manufacturer" is a Tobacco Product Manufacturer that is or becomes a signatory to the Master Settlement Agreement, provided that the manufacturer meets the requirements of Section II(jj) of the MSA and all amendments thereto.

A "Nonparticipating Manufacturer" means any Tobacco Product Manufacturer that is not a Participating Manufacturer.

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  • What is a Brand Family?

"Brand Family" means all styles of cigarettes sold under the same trademark and differentiated from one another by means of additional modifiers or descriptors, including, but not limited to, "menthol", "lights", "kings", and "100s", and includes any brand name (alone or in conjunction with any other word), trademark, logo, symbol, motto, selling message, recognizable pattern of colors or any other indicia of product identification identical or similar to, or identifiable with, a previously known brand of cigarettes.  Note that it is now impermissible under federal law to use certain descriptors such as “light” with regard to cigarettes.  See the Other Laws Tab for more information.

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  • How does a Tobacco Product Manufacturer get its Name and Brand Family included in the Directory?

A Tobacco Product Manufacturer may apply for inclusion in the Directory by completing the certification process described in A.R.S. § 44-7111(3), including by executing and delivering to the Attorney General and the Director of the Department of Revenue the Directoy Statute Certification form required by the Attorney General, the Waiver of Sovereign Immunity and, if applicable, the Surety Bond Certification and the Joint and Several Liability Certification. The Attorney General must approve a Tobacco Product Manufacturer's Certifications and all other requirements before the Tobacco Product Manufacturer's Name or Brand Family can be included in the Directory.  For certification forms, see the Forms tab.

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  • Is the Certification form for inclusion on the Arizona Cigarette Directory different than the Certification form for the annual escrow payment?

Yes. The Certification form for inclusion on the Arizona Cigarette Directory is different from the Certification form required for making the annual escrow payment. For certification forms, see the Forms tab.

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  • Is the Certification form for the annual escrow payment different than the Certification form for quarterly escrow payments?

Yes. The annual Certification form for the annual escrow deposit certification is different than the quarterly escrow deposit Certification form. For certification forms, see the Forms tab.


  • When must a tobacco product manufacturer submit the Surety Bond Certification?

Pursuant to A.R.S. § 44-7111(3)(d),a nonparticipating manufacturer shall post a bond for the exclusive benefit of this State if (i) its cigarettes were not sold in the State during any one of the four preceding calendar quarters, (ii) it or any person affiliated with it failed to make a full and timely escrow deposit due under section 44-7101 during any of the five preceding calendar years, unless the failure was not knowing or reckless and was promptly cured on notice or (iii) it or any person affiliated with it, or any of its brands or brands of a person affiliated with it, were removed from the state directory of any State during any of the five preceding calendar years, unless the removal was determined to have been erroneous or illegal. Entities are affiliated with each other if one directly or indirectly through one or more intermediaries controls or is controlled by or is under common control with the other. For certification forms, see the Forms tab.

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  • When must a tobacco product manufacturer submit a Joint and Several Liability Certification?

Pursuant to A.R.S. § 44-7111(3)(h), Nonparticipating manufacturers located outside the United States must provide a declaration in a form prescribed by the attorney general from each of its importers into the United States of any of its brand families, that the importer accepts joint and several liability with the nonparticipating manufacturer for all escrow deposits due pursuant to section 44-7101 as well as all penalties and other relief available to the State pursuant to section 44-7101 and this section. The declaration shall appoint a resident agent for service of process in this state pursuant to section 4. The Declarations shall be submitted as part of the certifications required pursuant to this section and updated at least thirty days before any other importer begins the importation of the manufacturer's cigarettes. Failure to comply with this subparagraph is grounds for removal from the Directory. For the purposes of this subparagraph, "Importer" has the same meaning as in 27 code of federal regulations section 41.11 (2012). For certification forms, see the Forms tab.


  • Do all NPMs have to submit a Waiver of Sovereign Immunity Certification?

Pursuant to A.R.S. § 44-7111(3)(i), the Attorney General shall have the authority to not retain or refuse to include in the directory any nonparticipating manufacturer or the manufacturer's brand families, that (i) does not certify that it is subject to the enforcement of section 44 7101, this section and section 36-798.06 without any immunity. Three Sovereign Immunity Waiver forms may be found in the forms section of this webpage. Each NPM must complete the Standard Waiver of Sovereign Immunity, unless another Sovereign Immunity Waiver form applies (in the case of Tribal NPMs or NPMs owned by foreign governments). For certification forms, see the Forms tab.


  • Can I operate a RYO machine on non-residential premises?

Pursuant to A.R.S. § 13-3711, it is unlawful (except as detailed below) to possess, use or make available for use for commercial purposes a tobacco product rolling vending machine. A tobacco product rolling vending machine located in a nonresidential premises is presumed to be possessed, used or available for use for commercial purposes unless the machine is for sale. This subsection does not apply to:

1. A tobacco product rolling vending machine that is to be used exclusively for the owner's personal consumption or use if the machine is not located on a retail or other business premises.
2. Tobacco product manufacturers who have obtained a current federal manufacturer of tobacco products permit issued by the federal alcohol and tobacco tax and trade bureau to operate as a tobacco product manufacturer.

However, as explained in the Department of Revenue’s LTN12-01, the machine still cannot be operated unitll all applicable state laws are complied with such as the Directory Statute (A.R.S. § 44-7111), and the State Fire Marshal’s Fire Standards (A.R.S. §§ 41-2170 – 41-2170.08).


  • If I no longer wish to maintain my escrow account, what can I do?

Pursuant to A.R.S. § 44-7111(3)(c), a NPM may make an irrevocable transfer of its interest in the escrow funds held in an Arizona sub-account to the State of Arizona. This is done on a case by case basis. All escrow funds must be kept in the qualified escrow account, pursuant to A.R.S. § 44-7101, until the transfer is approved by the Attorney General’s Office. Please contact the Tobacco Enforcement Unit at the Attorney General’s Office for more information on how to get started. .


  • How often will the Attorney General update the Directory to add or remove a Tobacco Product Manufacturer or a Brand Family?

A.R.S. § 44-7111 requires the Attorney General to update this Directory as necessary to correct mistakes and to add or remove a Tobacco Product Manufacturer or Brand Family to keep the Directory in conformity with the requirements of the Legislation. Accordingly, Tobacco Product Manufacturers and/or Brand Families may from time to time be added to or removed from the Directory. If a Tobacco Product Manufacturer or Brand Family is removed from the Directory, it thereafter becomes unlawful for any person to affix a stamp to a package or other container of Cigarettes of that Tobacco Product Manufacturer or Brand Family or to sell, offer or possess for sale, in this State, Cigarettes of that Tobacco Product Manufacturer or Brand Family. 

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  • How can I receive e-mail notices of additions to and/or removals from the Arizona Cigarette Directory?

If a person wishes to receive e-mail notices of additions to and/or removals from the Directory, the person may provide their e-mail address to the Attorney General by following the instructions on the Directory. Of course, persons who elect not to receive such e-mail notices should consult the Directory on a regular basis. Distributors are required by A.R.S. § 44-7111 to provide an email address to the Attorney General and the Director of the Arizona Department of Revenue. Notification form available on the Forms tab.

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  • Is a Brand Family approved under A.R.S. § 44-7111(3) if it is manufactured by a Tobacco Product Manufacturer other than the manufacturer listed in the Directory?

No. Under A.R.S. § 44-7111(3)(c), it is "unlawful for any person (1) to affix a stamp to a package or other container of Cigarettes of a Tobacco Product Manufacturer or Brand Family not included in the Directory or (2) to sell, offer or possess for sale, in this State, Cigarettes of a Tobacco Product Manufacturer or Brand Family not included in the Directory." In order for a Brand Family of Cigarettes to be approved, they must be manufactured by the Tobacco Product Manufacturer listed in the Directory.

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  • Is a Brand Family approved under A.R.S. § 44-7111(3) if the Brand Family is not listed in the Directory but is manufactured by a Tobacco Product Manufacturer that is listed in the Directory?

No. Under A.R.S. § 44-7111(3)(c), it is "unlawful for any person (1) to affix a stamp to a package or other container of Cigarettes of a Tobacco Product Manufacturer or Brand Family not included in the Directory or (2) to sell, offer or possess for sale, in this State, Cigarettes of a Tobacco Product Manufacturer or Brand Family not included in the Directory." In order for a Brand Family to be approved, the Brand Family itself must be listed in the Directory.

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  • Does A.R.S. § 44-7111 apply to Indian Reservations located in Arizona?

Yes. The proscriptions of A.R.S. § 44-7111(3)(c) (it shall be "unlawful for any person (1) to affix a stamp to a package or other container of Cigarettes of a Tobacco Product Manufacturer or Brand Family not included in the Directory or (2) to sell, offer or possess for sale, in this State, Cigarettes of a Tobacco Product Manufacturer or Brand Family not included in the Directory") apply with full force to Indian Reservations located in Arizona, including Cigarettes stamped for sale and/or sold to and from locations on such Reservations. In other words, the Directory Statute applies to all stamp colors (i.e., blue, red and green).

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  • Does the fact that a Tobacco Product Manufacturer or Brand Family is listed in the Directory mean that the Cigarettes comply with other State laws applicable to the sale and/or distribution of Cigarettes?

No. The fact that a Tobacco Product Manufacturer and its Cigarettes are listed in the Directory merely means that the Cigarettes have been approved under A.R.S. § 44-7111(3). The Fact that Tobacco Product Manufacturer's Cigarettes are listed in the Directory does not mean that they are compliant with other State laws applicable to the sale and/or distribution of Cigarettes, such as A.R.S. §§ 36-798.04 & 42-3210. For example, the sale of cigarettes in a package of less than 20 (e.g., the sale of individual cigarettes) is subject to A.R.S. § 36-798.04, which limits the distribution and sale of such cigarettes to facilities licensed pursuant to A.R.S. § 4-209(B)(6) and that admit only people that are at least 21 years old.   See also the Other Laws Tab for more information.

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  • Are Cigarettes that are imported into a Free Trade Zone in Arizona required to comply with A.R.S. § 44-7111, even if those Cigarettes are not being stamped for sale in Arizona?

Yes.  Under A.R.S. § 44-7111(3)(c), it is “unlawful for any person (1) to affix a stamp to a package or other container of Cigarettes of a Tobacco Product Manufacturer or Brand Family not included in the Directory or (2) to sell, offer or possess for sale, in this State, Cigarettes [includes roll-your-own tobacco] of a Tobacco Product Manufacturer or Brand Family not included in the Directory.”  (emphasis added).  This prohibition includes the possession of such Cigarettes in Arizona that are intended to be sold anywhere, whether that be within Arizona or outside Arizona. 

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  • Can consumers purchase tobacco products via the Internet phone, mail or other electronic means?

It is unlawful for any person, other than a person licensed under A.R.S. § 42-3201, or a retailer ordering from a person so licensed, to order or purchase, or cause to be ordered or purchased, a tobacco product via mail, phone, the Internet, or any electronic means (except for pipe tobacco and cigars). Simply put, under this law, Arizona consumers must buy tobacco products in a face-to-face transaction at a retail establishment (except for pipe tobacco and cigars). Violation of this law is a felony. Violators are subject to civil penalties of up to $5,000 per order, in addition to other penalties. A.R.S. § 36-798.06.

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  • Can a retailer buy tobacco products over the Internet, phone, mail or other electronic means for sale at its retail establishment?

A retailer may only buy tobacco products through the Internet, phone, mail or other electronic means, if the retailer is purchasing those products through an Arizona licensed distributor (except for pipe tobacco and cigars). Violation of this law is a felony. Violators are subject to civil penalties of up to $5,000 per order, in addition to other penalties. A.R.S. § 36-798.06.

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  • As a Common Carrier, can I be penalized for delivering tobacco products in violation of A.R.S. § 36-798.06?

Yes. A common carrier shall not knowingly transport a tobacco product for a person in violation of A.R.S. § 36-798.06. It is unlawful under this statute for any person, other than a person licensed under A.R.S. § 42-3201, or a retailer ordering from a person so licensed, to order or purchase, or cause to be ordered or purchased, a tobacco product via mail, phone, the Internet, or any electronic means (except for pipe tobacco and cigars). Violation of this law by Common Carriers, and others, is a felony. Violators are subject to civil penalties of up to $5,000 per order, in addition to other penalties. A.R.S. § 36-798.06.

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  • As a licensed distributor, can I buy tobacco products from manufacturers, export warehouse proprietors or importers who are not Arizona licensed distributors?

Yes, as long as the entity holds a permit as a cigarette manufacturer, export warehouse proprietor or importer under 26 USC § 5712.


  • As a licensed distributor, can I take orders for tobacco products from retailers via the Internet, phone, or other electronic means?

Yes, retailers may still make their orders using the convenience of the Internet, phone or other electronic means as long as the orders are with an Arizona distributor.

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