Tobacco Tax - Introduction
Bill 61 has passed in the PEI Legislature, and as a result, the PEI tobacco tax rates will increase effective 12:01am on May 7, 2022.
Tobacco wholesalers and retailers should ensure that on-hand tax paid inventories are completed at the close of business on May 6, 2022 in preparation for a tobacco tax self-declaration. Additional information on the tobacco tax self-declaration will be sent to wholesalers and retailers in the coming days.
This section provides general information on Tobacco Tax including legislative authority, licensing, tax collection and tobacco compliance.
What is Tobacco Tax?
Under the Tobacco Tax Act and Regulations a tobacco tax is charged on all consumer purchases of tobacco products including cigarettes, cigars, tobacco sticks and fine cut tobacco.
How is Tobacco Tax collected?
Tobacco manufacturers, wholesalers and retailers act as agents for the Minister of Finance in the collection of the tobacco tax from the consumer.
Tobacco manufacturers and wholesalers who are active in Prince Edward Island must apply to the Provincial Tax Commissioner for a license to operate in the province. Licensing information and applications can be found in the section Tobacco Manufacturer and Vendor Licensing.
Tobacco retailers who are active in Prince Edward Island must apply to the Provincial Tax Commissioner for a license to operate in the province. Licensing information and applications can be found in the section Tobacco Manufacturer and Vendor Licensing.
How do consumers pay Tobacco Tax?
Tobacco Tax is included in the price of tobacco paid by consumers. Tobacco retailers are reimbursed for the tobacco tax paid to tobacco wholesalers by collection of the tax from consumers.
What is legal tobacco?
All tobacco except for pipe tobacco, snuff, chewing tobacco and cigars sold in Prince Edward Island is required to be specifically marked with a Nova Scotia tobacco stamp. The Nova Scotia tobacco stamp is a modified federal tobacco excise stamp with a background colour of Pantone purple and the letters “NS” printed on the stamp. Pipe tobacco, snuff, chewing tobacco and cigars sold in Prince Edward Island are required to be specifically marked with the Federal tobacco stamp.
These stamps indicate that all required taxes have been paid.
Tobacco products that have the tobacco stamp, as required, are legal tobacco in Prince Edward Island.
What is contraband or illegal tobacco?
All tobacco except for pipe tobacco, snuff, chewing tobacco and cigars sold in Prince Edward Island is required to be specifically marked with a Nova Scotia tobacco stamp. The Nova Scotia tobacco stamp is a modified federal tobacco excise stamp with a background colour of Pantone purple and the letters “NS” printed on the stamp. Pipe tobacco, snuff, chewing tobacco and cigars sold in Prince Edward Island are required to be specifically marked with the Federal tobacco stamp.
These stamps indicate that all required taxes have been paid.
Tobacco products that do not have the tobacco stamp as required are considered contraband or illegal tobacco in Prince Edward Island.
Can I be fined for possession of contraband or illegal tobacco in excess of the limits?
Yes, information on penalties and fines can be found in the section Tobacco Tax Compliance.
Can I be fined for possession of legal tobacco in excess of the limits?
Yes, information on penalties and fines can be found in the section Tobacco Tax Compliance.