PACT Act to Apply to All Vaping Products

It's no longer news that the "vape mail ban" was passed into law in late December 2020. Although the way it was passed and the effects of the law have caused the vaping industry a lot of stress.

Congress hid the modified PACT act deep within the 5000-page document containing the large spending budget meant for COVID-19 relief.

The Pact Act

This is short for Prevent All Cigarette Trafficking (PACT) act. This US law restricts all postal services based in the US from accepting and delivering all vape products and accessories. Prior to December 2020, the PACT act only prohibited the delivery of tobacco products. Now, everything related to vaping has been banned from being transported within the United States of America.

This development nipped the bud of several entrepreneurs in the US vaping industry. Sure there is demand, however, the link between the demand and the supply has been broken by the refusal of the USPS to transport these vaping products.

Few weeks after the bill was passed, FedEx, DHL, UPS, and other couriers in the country had already passed out memos stating that merchants are now prohibited from using their services to send vape products.

Currently, a few couriers still ship vape products between States, but the steps involved in procuring the services of these couriers are more complex than ever.

All you need to know about the PACT ACT

For starters, the PACT ACT applies to all vaping products.

The modified bill addresses everything vapor and also included new statutes for USPS. From registration, reporting, and transport restrictions, the bill makes everything harder. There are ways to work around these red lines, and it'll be addressed later in this article.

The PACT Act now includes ENDS

The Electronic Nicotine Delivery Systems (ENDS) is the major modification in the 2020 PACT act. When the law was first passed in 2009, it was only meant to halt the transport of smokeless tobacco products and cigarettes through the USPS.

The new law now groups all vaping products and their accessories as contrabands for the USPS. Regardless of the presence or absence of nicotine in these products, all liquids, e-hookah, e-cigar, and e-cigs are banned— along with the vape pens. Shipping products in air tight jars may not work either as X-ray machines can see the contents of the jar.

This means zero-nicotine and tobacco-free nicotine products are also prohibited.

Legally, the US government now describes ENDS as any device that delivers nicotine, flavor, and other substances to a user through the inhalation of an aerosolized solution from the said device. Accessories like the refillable personal appraiser, and other components of the pens irrespective of their state as a liquid or solid, or if it is sold as a standalone component or with the pen is on the list of the prohibited goods under ENDS.

Simply put, The PACT Act is put in place to stop you from using any postal service to deliver or receive ENDS.

Violating the new Pact law is a civil and criminal offense

Yeah! Anyone caught and found guilty of disobeying the modified PACT Act can get sentenced to as much as three years in prison. Everyone still involved in the value chain of the US vaping industry has to consider just how much the PACT Act impacts their businesses.

The PACT Act is in full effect

As of March 28, 2021, the amended PACT Act was effected.

Some of the requirements for sellers in the vape industry includes:

Registration before the sale: All sellers need to register their businesses at the office of the Alcohol, Tobacco, and Firearms (ATF) and the office of Tobacco Tax administration present in the state the business is located in. A Company based in a different state from its customers also has to register in the state Its customers are based. All States where your products are sold or advertised must have a record of your business.

For more clarification, a good example is that if you sell vapes online to residents in New York, your business must be registered with the New York state tobacco tax office and the ATF office. You must also do the same if you advertise in New York and haven't made a sale at all. The law doesn't care if you make sales or not, you have to register!

Tax compliance: The 2009 PACT Act was passed to prohibit the online sales of untaxed tobacco products. The amended law now mandates payment of tax on all ENDS products and accessories. The tax administrators of each state are authorized to collect this payment. Local taxes are also collected. This ensures a standard is adhered to by private courier services that deliver to residential customers.

Right now, at least 28 states tax all ENDS products. To save the cost of operation, you can look closely at the states that do not tax ENDS yet and move your business there. But, at this rate, all states will adopt the taxation of ENDS products. Although, some might exempt certain products from being taxed, some of which might include hemp and CBD products.

Steps to take to legally shop your vape products

At the point of purchase, always verify the age and identity of the customer. Recall that the supposed reason for the vape mail ban is to prevent the sales of vape to underaged citizens. In addition to this, you must use a non-prohibited delivery method that will obtain the purchaser's name and signature.
Always label your shipped packages correctly as Tobacco products.
Keep all records of sales by giving a monthly report to the ATF office in all the states your product is advertised or sold.

Be Compliant!

The ATF is on the prowl to make scapegoats out of non-compliant sellers. The police agency will definitely not be taking any excuses from defaulters. The ATF has a list of non-complying businesses and they routinely give out this list to USPS, credit companies, and other important bodies to ensure a defaulter is unable to workaround the laid down regulations.

To escape huge fines and prison sentences, stick to the laid down rules of each state you are operating in.