MITCHELL, SD (Mitchell Now) Mitchell businesses selling cigarettes, tobacco, vaping products or alternative nicotine products can begin applying Nov. 1 for a new state retail nicotine license ahead of requirements taking effect Jan. 1, 2027.
Senate Bill 221 establishes a licensing and oversight system for nicotine retailers across South Dakota. Businesses must obtain a license for each retail location while maintaining an active sales tax license.
According to the South Dakota Department of Revenue, retail license fees will be $200 or $300, depending on the percentage of annual gross income generated by nicotine sales. Vending machine licenses will cost $100 annually.
The new regulations prohibit online, telephone and mail sales, along with video game-style packaging. Restrictions also cover free samples. Nicotine vending machines will be permitted only in qualifying licensed alcohol or gaming venues where access is restricted to adults 21 and older.
Retailers must purchase nicotine products exclusively from state-licensed distributors or wholesalers and maintain purchase records for inspection. The purchasing requirement began July 1, 2026.
Violations carry escalating penalties: $500 for a first offense, $1,000 for a second, and $2,000 plus a 30-day license suspension for a third. A fourth offense within 36 months carries a $5,500 penalty and license revocation.
Nicotine products may be sold only to customers age 21 or older.