The latest federal COVID-19 relief legislation contains an element that affects the distribution of electronic-cigarette products, according to a tobacco analysts.
The Preventing Online Sales of E-Cigarettes to Children Act prohibits the U.S. Postal Service from delivering packages containing e-cigarettes, FiscalNote analyst Stefanie Miller wrote Monday.
The bill also subjects e-cigarettes to other rules that currently govern online cigarette sales. The prohibition could go into effect as soon as 120 days.
Miller said the new provisions subjects e-cigarettes to the Jenkins Act and its key amendment, the Prevent All Cigarette Trafficking Act. The Jenkins Act requires sellers to report to states purchases of cigarettes by their residents so those states can collect state and local taxes from the buyers.
Retailers who sell cigarettes online must pay the state and local taxes of the jurisdiction in which the buyer receives the products.
"We see this policy as mainly advancing the trend we’re already seeing in the market — which is that the large, well-capitalized manufacturers will be poised to pay the costs to be in compliance with the new more burdensome policies," Miller wrote.
"Meanwhile, smaller manufacturers and retailers likely fall short and will be forced to exit the market."