PACT Act Overview for Vape Businesses
The Prevent All Cigarette Trafficking Act, amended in 2020 to include vape products, imposes federal requirements on delivery sellers of tobacco products. If you sell vape products and ship them to consumers, PACT Act obligations likely apply to your business. These obligations affect operations, shipping, and payment processing relationships.
Registration with the Bureau of Alcohol, Tobacco, Firearms and Explosives is required for delivery sellers. This registration must occur before you begin shipping vape products to consumers. Operating without registration exposes you to federal penalties and creates problems with payment processors.
State registration requirements layer on top of federal registration. You must register with tobacco tax administrators in each state where you have customers. These registrations may involve license fees, bonding requirements, and ongoing reporting obligations.
Tax collection and remittance obligations apply to delivery sellers. State and local tobacco taxes must be collected and remitted appropriately. The complexity of varying tax rates across jurisdictions makes compliance operationally challenging.
Payment Processing Implications
Processors underwriting online vape merchants typically require evidence of PACT Act compliance. Registration documentation, compliance procedures, and shipping carrier relationships may all be part of underwriting requirements. Incomplete compliance can lead to application denial.
Ongoing compliance monitoring by processors means violations can affect your account. If processors learn you're shipping to restricted jurisdictions or operating without required registrations, account reviews or terminations may follow.
Shipping carrier restrictions create operational considerations that affect payments. When major carriers like USPS, UPS, and FedEx restrict vape shipments, you must use compliant alternatives. Processors want assurance that your fulfillment operations comply with carrier terms.
Record-keeping requirements under the PACT Act include maintaining customer information and transaction records. These records may be subject to inspection by federal and state authorities. Having organized records supports both regulatory and processor relationship requirements.
How Goodlane Group Supports PACT Act Compliance
We help online vape sellers understand which PACT Act requirements apply to their operations. Not every vape business is a delivery seller under the Act, and understanding your specific obligations prevents both under-compliance and unnecessary effort.
Our processor recommendations consider compliance documentation requirements. Working with processors who understand PACT Act compliance smooths underwriting and ongoing account management.
We advise on compliance documentation practices that satisfy processor requirements while supporting regulatory obligations. Organized compliance documentation serves multiple purposes.
For businesses uncertain about their PACT Act status or facing compliance questions from processors, we help clarify obligations and develop practical compliance approaches.