OAR 150-323-0307: Oral Nicotine Products

(1) Definitions. (a) In addition to the definitions in ORS 323.500, the following definitions apply to this rule. (b) “Department” means the Oregon Department of Revenue. (c) “Form 531” means the Oregon Quarterly Tax Return for Tobacco Products (for non-licensed individual or business). (d) “Noncombustible” means the oral nicotine product is designed and marketed to be consumed via the oral cavity by means other than combustion, vaporization, or aerosolization. (e) “Package” means the smallest separable container of discrete consumable units. (2) Reporting existing inventory. (a) A retail dealer in possession of untaxed oral nicotine products on or after January 1, 2026, is responsible for reporting the oral nicotine products in their possession using Form 531 by April 30, 2026, and for paying the tobacco products tax on those oral nicotine products by the same date. Retail dealers in possession of these items must maintain records sufficient to demonstrate that these oral nicotine products have been reported and the tax on such oral nicotine products has been paid. (b) Examples of records sufficient to show the tax has been paid on oral nicotine products include sales invoices or receipts accompanied by a log of items in the possession of the retail dealer on January 1, 2026. (3) A retail dealer in possession of untaxed oral nicotine products on or after May 1, 2026, may be subject to one or more of the following. (a) Civil penalties as described in OAR 150-323-0420 and OAR 150-323-0430; (b) Assessment of tobacco tax and penalty under ORS 323.538(4); or (c) A declaration that their inventory is contraband and subject to seizure and destruction. (4) A retail dealer or licensed tobacco distributor shall determine the amount of tax due for each package as described in this section. (a) For each package containing 20 or fewer noncombustible discrete consumable units, the tax due to the department shall be calculated by multiplying the number of packages distributed during the quarter by $0.65 (65 cents). (b) For each package containing more than 20 noncombustible discrete consumable units, the tax due to the department shall be calculated by multiplying the total number of noncombustible discrete consumable units in each package by $0.0325 (3.25 cents), rounded to the nearest whole cent, and then multiplied by the number of packages distributed during the quarter. (c) If multiple sealed packages of noncombustible discrete consumable units are marketed or sold together, the tax due is calculated by determining the rate applicable to each individually sealed package of noncombustible discrete consumable units. For example, five separately sealed packages of 15 noncombustible discrete consumable units that are sold together as a five-pack is taxed at the rate applicable to five packages of 15 noncombustible discrete consumable units (5 x $0.65= $3.25).