§377 Penalties

Summary

Anyone who knowingly breaks these rules can go to prison for up to 3 years, be fined under federal law, or both. State, local, and tribal governments are not covered. A common carrier, delivery service, or their employee is criminally liable for violating section 376a(e) only if the act was done knowingly as payment (or a promise of payment) or to help a delivery seller break or avoid the law. Breaking the rules can also bring civil fines. Delivery sellers face the larger of either $5,000 for a first violation ($10,000 for later ones) or 2 percent of their cigarette or smokeless tobacco gross sales in the prior year. Common carriers or delivery services face $2,500 for a first violation, or $5,000 for a repeat within one year. Civil fines are in addition to any criminal penalties and any other court-ordered relief, including unpaid taxes. An employee of a carrier is only civilly liable for a 376a(e) violation if done intentionally for payment or to help a seller evade the law. A carrier won’t be fined if it has and enforces effective compliance policies or if the violation was by an employee acting outside their job or against those policies.