During the 2024 legislative session, Iowa enacted Senate File 345. Effective January 1, 2025, Senate File 345 regulates and taxes the sale of devices in Iowa.
What is a device?
A “device” is any equipment or product, made in whole or in part of glass or metal, that is designed for use in inhaling through combustion tobacco, hemp, other plant materials, or a controlled substance. “Device” does not include a vapor product or a tobacco smoking product made of briar, meerschaum, clay, or corn cob and not having a surface, aperture, or other feature consisting of metal or glass.
What does this mean for:
List items for Glass and Metal Devices
Anyone wanting to sell a device to the ultimate consumer from a place of business in Iowa must obtain a sales tax permit, a retail tobacco permit, and a device retailer permit. An ultimate consumer is the person who possesses a device for use or consumption in this state. The device retailer permit must be approved by the city or county containing the retail location. The fee for a device retailer permit is $1,500. The device retailer permit expires June 30 each year.
All permits—including device retailer permits, retail tobacco permits, and sales and use tax permits—must be applied for and renewed electronically through GovConnectIowa. A permit is not valid for use until the application has been approved and the permit has been issued.
The Department cannot refund the $1,500 annual device retailer permit fee, and the fee is non-refundable if the application is denied for any reason. A retailer should contact the local jurisdiction (city or county) where the retail establishment is located to confirm any local requirements before submitting a new or renewal application.
The device retailer may only display and sell devices in a location where the devices are not visible to a person younger than 21 years of age and where no person younger than 21 years of age is present or permitted to enter at any time.
On every sale of a device, the device retailer must collect the 40% device excise tax, 6% state sales tax, and any local option sales tax.
The device retailer must file the device excise tax return and remit the device excise tax collected on a monthly basis. Returns and remittances are due on the last day of the month following the sale.
Civil and criminal penalties apply to violations of Iowa Code chapter 453E.
Anyone wanting to sell a device by delivery to the ultimate consumer in Iowa must obtain a sales tax permit, a retail tobacco permit, a device retailer permit, and a device delivery seller permit. An ultimate consumer is the person who possesses a device for use or consumption in this state. The device delivery seller permit must be approved by the Department. The fee for a device delivery seller permit is $1,500. The device delivery seller permit expires June 30 each year.
All permits—including device delivery seller permits, device retailer permits, retail tobacco permits, and sales and use tax permits—must be applied for and renewed electronically through GovConnectIowa. A permit is not valid for use until the application has been approved and the permit has been issued.
The Department cannot refund the $1,500 annual fee for a device delivery seller permit or a device retailer permit fee, and the fees are non-refundable if the application is denied for any reason. A retailer should contact the local jurisdiction (city or county) where the retail establishment is located to confirm any local requirements before submitting a new or renewal application.
All devices delivered by delivery sale must be conspicuously labeled with the words “CONTAINS DEVICE: SIGNATURE OF PERSON AGE 21 OR OLDER REQUIRED FOR DELIVERY” or alternative approved wording that is preapproved by the Director.
All devices delivered by delivery sale must be conspicuously labeled with approved wording regarding the need for the signature of a person 21 years of age or older.
On every delivery sale of a device, the device delivery seller must collect the 40% device excise tax, 6% state sales tax, and any applicable local option sales tax.
The device delivery seller must file the device delivery excise tax return, remit the device excise tax collected, and file a device delivery seller report on a monthly basis. Returns, remittances, and reports are due on the last day of the month following the sale.
The device delivery seller report includes, for each delivery sale, the name of the device manufacturer, quantity of devices delivered, recipient's name and address, and verification of age.
Civil and criminal penalties apply to violations of Iowa Code chapter 453E.
Permitting for a device retailer is similar to the new tobacco retailer permitting process through GovConnectIowa.
The applicant will submit the device retailer permit application to the Department electronically via GovConnectIowa. The Department will forward the application to the appropriate city or county. The city or county will notify the Department when it approves the application, and the Department will issue the device retailer permit on behalf of the city or county.
The Department will collect permit fees for device retailer permits and then credit the fees to the appropriate city or county.
The Department cannot refund the $1,500 annual device retailer permit fee, and the fee is non-refundable if the application is denied for any reason.
The Department will work with law enforcement to aid in compliance checks of device retailers.
Beginning January 1, 2025, devices may only be sold in Iowa by retailers and delivery sellers that hold the proper permits.
On every sale of a device, the retailer or delivery seller must collect the 40% device excise tax, 6% state sales tax, and any local option sales tax.
For device delivery sales, the delivery seller must obtain valid proof of the purchaser’s identity and age.
The Department, in partnership with local law enforcement agencies, is statutorily responsible for enforcing the glass and metal device laws in Iowa Code chapter 453E.
If anyone suspects a business is violating the law regarding devices, they are encouraged to submit a complaint for the Department to review using the path below. The Department will review the complaint and may conduct its own investigation. Members of law enforcement should submit any incident reports and photos with their complaint to assist the Department’s investigation.
Navigate to the Additional Services panel and select Submit a Complaint about a Business
Select Report Tobacco Complaint
Follow the steps to complete the submission process
Law enforcement can also email information about device violations to iapledge@iowa.gov. The Department will review the information and may conduct its own investigation.
If a local jurisdiction has questions about potential criminal charges for violations of Iowa Code chapter 453E, they should consult their city or county attorney or other legal counsel for guidance. The penalties for violations of this chapter are outlined in Iowa Code section 453E.7.
Important Dates
November 12, 2024: The Department made permit applications available electronically for device retailers and delivery sellers on GovConnectIowa. Anyone interested in a device delivery seller permit can prepare by obtaining a sales tax permit, a tobacco retailer permit, and a device retailer permit for their retail location.
January 1, 2025: Anyone making retail sales or delivery sales of devices to ultimate consumers in Iowa must hold the appropriate permits, collect device excise taxes and all required information, and ensure no person under 21 years of age can view or access devices.
February 28, 2025: The first device excise tax returns, remittances, and reports are due.
