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Beginning September 24, 2026, taxpayers can order the new Heat Not Burn Stamps from MyDORWAY.

South Carolina lawmakers passed H.4303, which creates a new tax on cigarettes for heating made of tobacco, commonly called Heat Not Burn (HNB) products.

Looking for retailer-specific information?

Find answers to all of your licensing and filing questions!

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South Carolina licensed distributors who first receive untaxed HNB products for sale or distribution in SC are required to:

  • Stamp packages of HNB products
  • Include purchases of HNB on their monthly Cigarette Tax Report on MyDORWAY
  • Report purchases of HNB products beginning with the October return, due November 20, 2026

Taxpayers can order HNB stamps from MyDORWAY beginning September 24.

  • Log in to your MyDORWAY account > Select More Account Options > Select Order Cigarette Stamps

HNB Cigarette Tax is 21.375 mills on each HNB cigarette.

Licensing requirements

A license to purchase, sell, and distribute manufactured tobacco is free and required for the following persons before engaging in the sale of cigarettes in South Carolina:

  • ​Wholesalers selling and distributing cigarettes
  • Vending machine operators selling cigarettes through vending machines placed on another person’s premises
  • Cigarette manufacturers' sales representatives
  • Retailers (selling as wholesalers) purchasing stamped cigarettes from a licensed South Carolina tobacco wholesaler to resell to other retailers in South Carolina
    • Retailers purchasing SC stamped cigarettes only for sale to consumers do not have to apply for a Cigarette Tax Stamp License.

Additional requirements

A Cigarette Tax Stamp license is only valid for the person in whose name it is issued and only for the business transactions at the location designated on the license.

  • Wholesalers and retailers (selling as wholesalers) must obtain a license for each place of business.
  • Each cigarette manufacturer representative must be individually licensed by the SCDOR.
  • Vending machine operators and sales representatives are only required to obtain one license.
  • Vending machine operators must maintain an up-to-date list of the location of each cigarette vending machine in South Carolina.

Applicants must apply for the Cigarette Tax Stamp license on MyDORWAY, our free online tax portal, using the Business Tax Application. 

Apply for a License

Cigarette distribution


Ordering Cigarette Tax Stamps

  • ​Qualifying distributors purchase Cigarette Tax Stamps directly from MyDORWAY​.​​ Cigarette Tax Stamps are not available for pickup at SCDOR offices.
  • Your Cigarette Tax Stamps will be shipped to you ​from a vendor designated by the SCDOR.​​​

Requirements for stamping cigarettes

Cigarette Tax Stamps are applied to all cigarettes made of tobacco or any tobacco substitute that meets both of the following requirements:

  1. ​The product meets South Carolina's definition of a cigarette found under SC Code Sections 12-21-620 and 12-21-625(D)​:
A "cigarette" is:​
  • ​Any roll for smoking containing tobacco or any substitute for tobacco wrapped in paper or in any substance other than a tobacco leaf; or
  • Any roll for smoking containing tobacco or any substitute for tobacco, wrapped in any substance, weighing three pounds per thousand or less, however labeled or named, which because of its appearance, size, type of tobacco used in the filler, or its packaging, pricing, marketing, or labeling, is likely to be offered to, or purchased by, consumers as a cigarette described above.​

​Since the enforcement of the cigarette tax applies to “all cigarettes made of tobacco or any substitute for tobacco,” cigarettes that do not contain tobacco, such as clove cigarettes, are subject to the tax.

In addition, a cigar that weighs three pounds per thousand or less, regardless of how it’s labeled or named, is considered a cigarette for the purposes of the cigarette tax.

  1. The product is listed on the South Carolina Attorney General's Tobacco Directory​. See SC Code Section 12-21-735(G) for more information.

Tobacco products that meet the statutory definition of a cigarette but are not listed on the South Carolina Attorney General's Tobacco Directory are illegal to stamp or sell in South Carolina.​

Once cigarettes have been brought into the state, the distributor who receives them is responsible for stamping them. Once an SC Cigarette Tax Stamp is affixed to each pack, the stamped cigarettes may be distributed to retailers or other distributors.

How to file and pay

Cigarette Stamp taxpayers must file and pay all taxes electronically.

The only refunds which will be made with respect to Cigarette Tax Stamps will be for the following:

  1. Cigarettes shipped out of the geographic limits of the State of South Carolina in accordance with the provisions of SC Code Section 12-21-90;
  2. Damaged cigarettes in accordance with the provisions of SC Code Section 12-21-110 and any applicable regulations of the South Carolina Department of Revenue;
  3. Damaged tax stamps (Distributor must contact the SCDOR Tobacco Office to request an inspection by the Field Audit Team and possibly the manufacturer of the stamps);
  4. Cigarettes returned as unsellable;
  5. Cigarettes unrecoverable as a result of bad debt; and
  6. Any other circumstance authorized by the General Assembly. 

Note: In the event any cigarettes to which tax stamps have been affixed are delivered to the Federal Government or any instrumentality thereof, the value of such tax stamps will not be refunded by the SCDOR.

Refund requests should be submitted on the Refund Application for Cigarette Tax Stamps (L-1020) to accompany Manufacturers Returned Goods Affidavit and Credit Memorandum. 

Note: SC Code Section 12-54-85(F)(1) establishes the time limits for filing a claim for a credit or refund. Since no return will be filed with respect to payment of the Cigarette Tax (an informational report will instead be filed), claims for refund must be filed within two years from the date the tax stamps were purchased.

Bad debt

For purposes of determining the refund for cigarettes unrecoverable as a result of a bad debt, a bad debt is an amount that is charged off as a bad debt for state Income Tax purposes.

What you need to apply for a refund

All refunds must be properly documented in order for the SCDOR to issue refunds. Proper documentation for refunds includes, but is not limited to:

  • bills of lading
  • shipment receipts
  • documentation for shipments of cigarettes returned to a manufacturer (e.g., affidavit and credit memorandum)
  • any other documentation as determined by the SCDOR.

The SCDOR may require a physical verification on a case-by-case basis (e.g., receipt of damaged tax stamps by a distributor).​

Form NameForm Number
Monthly Cigarette ReportMust be filed on MyDORWAY
Refund Application for Cigarette Tax StampsL-1020
Application for License to Purchase, Sell, and Distribute Manufactured TobaccoMust be filed on MyDORWAY
Manufacturer's Sales Representatives' License Application for Cigarette, Cigar, and Tobacco ProductsL-917
State Tobacco Tax BondL-2167

The following sales are exempt by law from the Cigarette Tax:

  1. ​Sales of cigarettes to the United States Government or United States Government instrumentality for Army, Navy, Marine, or Air Force purposes and delivered to a place lawfully ceded to the United States
  2. Sales of cigarettes delivered to a ship belonging to the United States Navy for distribution and sale to members of the military establishment only
  3. Sales of cigarettes delivered to ships regularly engaged in foreign or coastwise shipping between points in this State and points outside the State

Tax-exempt stamps:

Cigarettes that qualify for any of the above exemptions must have a tax-exempt stamp affixed to each package of cigarettes:

  • There is no fee for ordering tax-exempt stamps
  • Tax-exempt stamps must be ordered in increments of 30,000

Note: If for any reason cigarettes with tax-exempt stamps are found in any retailer’s location, and sales to that location do not qualify for any exemption listed above, the cigarettes are subject to seizure, and the retailer in possession of those cigarettes is subject to any applicable penalties and fines.

Frequently asked questions

Do cigarette representatives have to be licensed by the SCDOR?

Yes. They must complete and submit the Manufacturer's Sales Representatives' License Application for Cigarette, Cigar, and Tobacco Products (L-917).

Are licenses transferable?

No. A license is only valid for the person in whose name it is issued and only for the business transactions at the location designated on the license.​

Can I purchase Cigarette Tax Stamps on credit?

Yes, distributors can purchase stamps on 30-day credit terms. Payment for each calendar month’s liability is due by the 20th day of the following month, including weekends and holidays. 

For example, if a credit purchase is made during the month of May, full payment for that credit purchase is due by June 20.

Are there any requirements or restrictions for purchasing Cigarette Tax Stamps on credit?

Yes. In order for a distributor to purchase Cigarette Tax Stamps on credit, the following requirements must be met:

  • The distributor must not have any outstanding Cigarette Tax Stamp purchase liabilities (no additional credit purchases will be allowed if a distributor has any credit purchase liability that is past due)
    and
  • The distributor must post a surety bond prior to purchasing stamps on credit in the amount of 110% of its estimated tax liability for 30 days, but not less than $2,000. 

Note: If a distributor defaults in the bonding or payment provisions, the SCDOR may revoke the distributor’s privilege to purchase stamps. Failure to timely pay will also subject a distributor to all applicable penalties, interest, and possible revocation of the distributor’s license. In addition, under SC Regulation 117-1600.2(d), no distributor may purchase stamps unless and until the distributor is current in filing all reports and other documentation required by the regulation.

If a distributor intends to purchase Cigarette Tax Stamps using the 30-day credit plan, will the SCDOR still accept financial statements in lieu of cash or a surety bond as done in the past?

No, the statute requires a distributor purchasing stamps on credit to obtain a surety bond, and the amount of that bond must be equal to 110% of the distributor’s estimated tax liability for 30 days, but not less than $2,000.

Is a bond required?

No. Effective January 1, 2019, a tobacco bond is not required for a Cigarette Tax Stamps or Other Tobacco Products (OTP) Tax account. Code Section 12-21-735(E)(7) states that in order to obtain stamps using the 30-day credit plan, a distributor must post a bond in an amount equal to 110% of the distributor’s estimated monthly tax liability, but not less than $2,000. Therefore, without a bond, a distributor must pay for stamps at the time a stamp order is placed.

Can a distributor purchase rolls of stamps in increments smaller than 30,000?

No. Distributors can purchase stamps for 20-count and tax-exempt packs in increments of 30,000.

Is there a limit on the number of Cigarette Tax Stamps that may be purchased at any one time?

No, the law does not place any limitations on how many stamps may be purchased in one order. However, MyDORWAY has a stamp order limit of 200 total rolls, so separate orders need to be placed if ordering more than 200 rolls. Multiple orders can be placed on the same day on MyDORWAY.

Will a distributor receive any compensation for affixing and accounting for Cigarette Tax Stamps​?

Yes, a distributor will receive a discount of 4.25% of the face value of each purchase of Cigarette Tax Stamps.

Can distributors purchase unstamped cigarettes from other licensed distributors in SC?

No. Once cigarettes have been brought into the state, the distributor who receives them is responsible for stamping them. Once an SC Cigarette Tax Stamp is affixed to each pack, the stamped cigarettes may be distributed to retailers or other distributors.

How do I store Cigarette Tax Stamps until I am ready to use them? 

The following are the stamp vendor's (Meyercord's) recommendations and guidelines for storing and keeping stamps:

  • Stamps must be stored within a low humidity and room temperature environment. Recommended environmental conditions shall not to exceed 50% room humidity and temperatures shall be between the ranges of 60°F to 80°F.
  • Stamps must be securely stored in its original box until it is ready to be loaded into a stamping machine.
  • After partial use, it is recommended that the partial roll be stored in original packing.
  • Avoid exposing the stamps to sources of heat, hot surfaces, furnaces, and radiators.
  • Avoid exposing the stamps to extreme cold temperatures (see 1 above).
  • If upon delivery of stamps, its packing shows visible damage (i.e. severe physical damage to the packing exposing its contents, water damage, heat damage, etc.) the SCDOR and subsequently Meyercord Customer Service must be notified ASAP (customerservice.us5@meyercord.com) for shipment tracking and potential replacement of stamp rolls affected.

The guidelines above are best practices for ensuring that FUSON® product performance is optimal and that the product will apply as designed to support the SCDOR stamping standards.

Once an SC licensed distributor has stamped the cigarettes with South Carolina tax stamps, is there a requirement to store them separately from other inventory in the warehouse?

Yes. For example, SC stamped cigarettes are required to be stored in a separate area within the warehouse if the distributor uses the advanced stamping method, meaning the cigarettes are stamped upon arrival at the warehouse. 

However, if the distributor uses the stamp-to-order method, meaning the cigarettes are not stamped until pulled from stock to fill an order, then the unstamped cigarettes do not have to be stored separately. Once stamped, the cigarettes should be placed on a delivery truck or on the loading dock to be loaded onto a delivery truck.

See Regulation 117-1600​​ for more detailed information concerning separate area storage requirements.

Are licensed distributor warehouses located outside of SC required to separate their inventory once cigarettes have been properly stamped for sale in SC?

No, the inventory separation requirement only applies to licensed distributor warehouses located within South Carolina.

Note: Any cigarettes found in a retail location with another state’s stamp will be considered contraband and subject to seizure and violation. While there is no inventory separation requirement for out-of-state distributor warehouses, the distributors are responsible for ensuring that all cigarettes entering South Carolina are properly stamped with a South Carolina stamp when delivered to retailers in this state.

Can a licensed distributor, instead of using a stamping machine, use another device which imprints distinctive indicia evidencing the payment of the Cigarette Tax?

No. The SCDOR has not approved any other method for evidencing the payment of the Cigarette Tax.

Is a refund available for lost or stolen Cigarette Tax Stamps?

No, the law does not provide for a refund for lost or stolen Cigarette Tax Stamps.

How do I close my Business Tax Account?
  • You can close your account on MyDORWAY. Once you've logged in, click More, then select Close a Tax Account, located under the Access section.
  • If filing by paper, check the box labeled Final on the return.

Where do you report evidence of possession of contraband cigarettes​?

Visit the nearest SCDOR Taxpayer Service Center to report evidence of possession of contraband cigarettes. 

Where do you report sales to minors?

Information concerning retail sales of cigarettes to minors should be reported to the local law enforcement agency.

Mailing address:

South Carolina Department of Revenue | PO Box 125 | Columbia, SC 29214-0138