Whether you're a retailer, entrepreneur, or operator, understanding these regulations is essential not only for compliance but also for safeguarding your investment. Below is a detailed guide that breaks down the current rules, requirements, and best practices for operating a vape vending machine in Arizona.

1. Placement Restrictions – Vape & Nicotine Vending Machines

36-798.02. Vending machine sales of tobacco and tobacco products; signage; violation; classification

A. A person shall not sell tobacco products through a vending machine unless the vending machine is located in either:

1. A bar.

2. An employee lounge area that is not open to the public and the business in which the lounge area is located does not employ minors.

B. A sign measuring at least eighty square inches shall be obviously affixed to the front of each vending machine. The sign shall state in block letters, it is illegal for a minor to purchase cigarettes or tobacco products and, upon conviction, a fine of up to three hundred dollars may be imposed.

C. This article does not invalidate an ordinance of or prohibit the adoption of an ordinance by a county, city or town to further restrict the location of vending machines or specify different wording for the vending machines signs as required by subsection B of this section.

D. A person who violates this section is guilty of a petty offense.

Clarified Interpretation: While "tobacco products" is the phrasing in statute, Arizona law and enforcement interpret vapor products similarly in practice due to their nicotine content. Thus, vape vending machines must be:

2. Licensing & Permitting Requirements

🔹 No State-Level Tobacco Retail License for Vape Products

• As of 2025, Arizona does not require a retail license specifically to sell vapor products, including from vending machines.
• However, businesses must comply with federal law, which mandates:
  • Age verification
  • No sales to anyone under 21 (per 21 U.S.C. § 387f(d) via the Tobacco Control Act amended by the Tobacco 21 law)

🔹 Transaction Privilege Tax (TPT) License – Required

All vending machine operators in Arizona must hold a TPT license issued by the Arizona Department of Revenue (ADOR) under A.R.S. § 42-5005.

• Apply via https://aztaxes.gov
• TPT rates vary by county, ranging from 5.6% to 11.2% depending on local add-ons.

🔹 Business Registration

• You must also register your vending business with the Arizona Corporation Commission (ACC) if operating as an LLC or corporation.
  • https://ecorp.azcc.gov
• If selling in multiple locations, each vending machine location may be considered a separate place of business for tax purposes.

3. Taxes and Fees

Sales Tax (TPT)

• Collected on gross proceeds of sales from vape and nicotine products.
• Reported and remitted monthly or quarterly (based on volume).

Excise Tax

• Arizona does not impose a state excise tax on vapor products or nicotine pouches as of 2025.
• However, federal excise taxes may apply if products are imported or manufactured, under the authority of the Alcohol and Tobacco Tax and Trade Bureau (TTB).

4. Regulatory Agencies

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