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South DakotaSB 221101st South Dakota Legislature (2026)Senate

regulate the retail sale of nicotine products, and to provide a penalty therefor.

Sponsored By: Karr, Chris (Republican)

Signed by Governor

Administrative ProcedureDelayed Effective DateElectronic Smoking DevicesHoghouse-Vehicle BillLicensurePenaltyTrade

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Bill Overview

Analyzed Economic Effects

7 provisions identified: 1 benefits, 5 costs, 1 mixed.

Nicotine sellers face fines and shutdowns

Beginning January 1, 2027, licensed nicotine sellers face escalating penalties for covered sales, vending, recordkeeping, and youth-access violations. The first violation costs $500; a second within 36 months costs $1,000. A third within 36 months costs $2,000 and brings a 30-day license suspension. A fourth within 36 months costs $5,500 and brings license revocation. Fines are due within 30 days after notice. The state may also suspend or revoke licenses for other chapter or rule violations or qualifying felony convictions. Unlicensed sales can bring a $500 daily fine, except where section 5's licensing exception applies. Retailers revoked under the penalty provision must safely destroy products or return them to the licensed supplier that sold them. They must send proof to the Department of Revenue; failure to comply within 60 days brings a $5,000 fine.

Nicotine sellers need licenses and fees

Beginning January 1, 2027, South Dakota nicotine sellers need a separate license for each location and vending machine. Initial and renewal fees are $300 per location when nicotine sales provide at least 50% of annual gross income. Locations below that threshold pay $200; each machine costs $100. Applicants must provide contact information and nicotine-related violation history. Applicants under 21, those giving false information, and those behind on covered taxes cannot get or renew a license. Covered felonies involve financial crimes, nicotine or alcohol sales, or controlled substances. At least three years must pass after satisfactory completion of each covered sentence or probation before eligibility returns. Licenses last through December 31 following issuance; renewal applications are accepted from 60 days before through three days after expiration. A license stays valid while renewal is pending, unless denied. Transfers require a new-owner application and covered business and property taxes to be paid or not delinquent.

Nicotine vending sellers must check ages

Beginning January 1, 2027, nicotine vending machines are allowed only in qualifying licensed establishments, including licensed gaming establishments. Machines must be in areas closed to people under 21 and must verify each buyer's age. The vending retailer is responsible for machine compliance, and the machine is the point of sale. All nicotine merchants must clearly post an under-21 sales notice, with words at least one inch high. A valid license must appear beside the notice; machines may show the notice electronically. Businesses that only house machines are not retailers unless they also sell nicotine products separately.

State strengthens checks on nicotine sellers

Beginning January 1, 2027, the Department of Revenue can inspect licensed nicotine sellers during normal business hours. It must investigate reported possible violations and pursue enforcement when substantial evidence exists. After finding a violation, it must inspect the seller within six months. County state's attorneys or designated local officers must conduct random, unannounced inspections each year and send evidence to the department. Test buyers under 21 require written parental consent and supervision by the state's attorney or designated officer. The department administers a nicotine enforcement fund that keeps collected fees, fines, and interest to pay enforcement expenses. Spending goes through the general appropriation bill; no specific funding amount is set. The department must adopt rules for licensing, records, inspections, fines, and inventory disposal or returns.

Nicotine license lists lose some privacy

Beginning January 1, 2027, nicotine licensees join the businesses whose license lists may be disclosed for official duties. The exception also covers licensees under the listed fuel and vehicle-related licensing chapters. Other Department of Revenue taxpayer, licensee, and applicant lists remain confidential. Unauthorized disclosure remains a Class 2 misdemeanor.

Nicotine sellers must keep sales records

Beginning January 1, 2027, licensed nicotine sellers must keep inventory and sales records, supplier details, and invoices for three years. Records must follow state standards. Off-site records must be provided electronically within five business days after the Secretary of Revenue requests them. Machine products count as the vending retailer's inventory, not the host business's inventory. Businesses that only house machines are exempt from these records duties but must allow access to the machines. Unintentional record errors recognized by the secretary do not trigger the specified penalties.

Nicotine buyers and sellers face limits

Beginning January 1, 2027, South Dakota law strengthens youth-access protections while limiting how consumers buy nicotine products. People under 21 cannot buy, receive, possess, or consume them; others cannot knowingly sell or distribute to them. Buying for or giving nicotine products to someone under 21 is also banned. Sellers face limits on shipping, phone, mail, internet, delivery, curbside, and third-party sales, with exceptions under chapter 10-50C and enacted House Bill 1220. Authorized vending sales follow separate rules and are exempt from the remote-sales ban. Licensees cannot give free samples, buy from unlicensed suppliers, or sell products or packaging with prohibited game features. Self-service displays are banned. Sample distribution is also barred on public streets, sidewalks, or parks within 500 feet of youth facilities while used mainly by people under 21. Products must be sold in unopened manufacturer packages with required federal warnings; each packaging violation carries a $250 fine. Licensees can be responsible for covered violations by employees or agents acting within their work duties.

Sponsors & Cosponsors

Sponsor

  • Karr, Chris

    Republican • Senate

Cosponsors

  • Mulder, Brian

    Republican • House

  • Perry, Carl

    Republican • Senate

Roll Call Votes

All Roll Calls

Yes: 131 • No: 25

Senate vote • 3/10/2026

Concurred in amendments

Yes: 29 • No: 5

House vote • 3/9/2026

Do Pass Amended

Yes: 66 • No: 3

House vote • 3/4/2026

Do Pass Amended

Yes: 7 • No: 6

Senate vote • 2/24/2026

Do Pass Amended

Yes: 22 • No: 11

Senate vote • 2/20/2026

Do Pass Amended

Yes: 7 • No: 0

Actions Timeline

  1. Signed by the Governor

    3/30/2026Senate

  2. Delivered to the Governor

    3/12/2026Senate

  3. Signed by the Speaker

    3/11/2026House

  4. Signed by the President

    3/11/2026Senate

  5. Concurred in amendments

    3/10/2026Senate

  6. Do Pass Amended

    3/9/2026House

  7. Motion to amend

    3/9/2026House

  8. Do Pass Amended

    3/4/2026House

  9. Motion to amend

    3/4/2026House

  10. Scheduled for hearing

    3/4/2026House

  11. First read in House and referred to

    2/25/2026House

  12. Do Pass Amended

    2/24/2026Senate

  13. Motion to amend

    2/24/2026Senate

  14. Do Pass Amended

    2/20/2026Senate

  15. Motion to amend

    2/20/2026Senate

  16. Scheduled for hearing

    2/20/2026Senate

  17. Referred to

    2/5/2026Senate

  18. First Reading Senate

    2/4/2026Senate

Bill Text

  • Introduced

    2/4/2026

    PDF

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