What a compliance footprint is

The idea in one paragraph

Every obligation a tobacco business carries comes from two things: its role (manufacturer, importer, distributor, online seller or retailer) and its reach (the states and countries where its products are sold or delivered). The footprint is the list that results, with the agency, the filing, the frequency and the due date for each. It grows as a business adds products, sales channels or destinations.

HNM Compliance explainer

Federal layer: set by your role

Some obligations follow the business wherever it sells. A manufacturer or importer of tobacco products must obtain a TTB permit before starting business. Domestic establishments that manufacture or process tobacco products must register with FDA and list their products, and new products may need FDA premarket review. A business that ships cigarettes, smokeless tobacco, roll-your-own or vapor across state lines picks up PACT Act registration with ATF.

• TTB permit for manufacturers and importers (26 U.S.C. 5712)
• FDA establishment registration and product listing (21 U.S.C. 387e)
• PACT Act registration for covered products (15 U.S.C. 376)

26 U.S.C. 5712; 21 U.S.C. 387e; 15 U.S.C. 376 Source

State layer: set by where products go

Each state where products are sold or delivered can add its own layer: distributor, wholesaler or retailer licenses, excise tax returns, remote-seller registrations, product directories or lists, and PACT Act monthly reports for covered products. The same product can carry very different obligations in two neighboring states.

HNM Compliance explainer

Product layer: set by what you sell

The product mix changes the footprint. Premium cigars are outside some regimes, such as the PACT Act, but other products such as vapor, smokeless or machine-made cigars can bring in federal delivery-sale rules and state product listing requirements.

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Keeping the footprint current

A footprint is a living list. It should be reviewed whenever the business adds a state, a sales channel such as online direct-to-consumer, a new product type, or a new corporate entity, and at least once a year before renewal seasons. Each entry should record the agency, the account or license number, the filing frequency, the next due date and the person responsible.

• Trigger events: new state, new channel, new product type, ownership change
• Record: agency, account number, frequency, next due date, owner

HNM Compliance explainer