2021 House Bill 2164 would have prohibited any person from selling any tobacco product at retail without first obtaining a license from the Virginia Alcoholic Beverage Control Authority ("ABC"). See Appendix A for the text of 2021 House Bill 2164 and Appendix K for the Fiscal Impact Statement for 2021 House Bill 2164. The House Appropriations Subcommittee on Transportation and Public Safety voted to table the bill. In doing so, the Subcommittee also supported a request for the Department of Taxation ("the Department") to conduct a study to assess the feasibility and costs associated with the creation of licensure for tobacco retailers to prevent the selling of tobacco products to underage individuals. By letter, the Chairman of the House Committee on Appropriations requested that the Department conduct such a study. See Appendix B.

The Department conducted research on retail tobacco licensing and reached out to stakeholders to solicit their input on the issues involved. Their comments and input were the focus of this study. This report summarizes the comments provided by stakeholders, information obtained from the Virginia Department of Behavioral Health and Developmental Services ("DBHDS") related to federal funding for tobacco licensing and retail inspections, updated information from ABC related to potential costs associated with implementing a retail licensing program, and the tax-related rules that currently apply to retailers of cigarettes and other tobacco products. Following a summary of this background information, this report provides a summary of findings to assist the General Assembly in considering future action, including information regarding the costs associated with the creation of a licensure program for tobacco retailers based on the assumptions provided by DBHDS and the estimated resource needs provided by ABC.