Bill
HB 1440
ND requires cigar lounges to meet ventilation rules and earn at least 15% of annual gross from cigars and pipe tobacco to obtain/renew a certificate, with annual reporting.
Status and sponsors
- Introduced: November 21, 2024.
- Sponsors / introducers: Representatives D. Ruby, Dockter, Headland, Kasper, Marschall, Porter, Rohr, M. Ruby, Wolff; Senators Paulson, Weston, Wobbema.
- Enacted: Enrolled and transmitted to Governor in April 2025; filed with Secretary of State April 28, 2025 (Act No. 629).
Purpose / intent
- Update and clarify the statutory rules that define and regulate “cigar lounges” in North Dakota, including permitted products, certification and renewal procedures, required premises features, and reporting requirements. The revisions expressly include pipe tobacco alongside cigars in the definition and revenue tests.
Key provisions and changes
- Permitted smoking: A cigar lounge that meets the statutory requirements may permit smoking of cigars and pipe tobacco purchased on the premises, but may not permit smoking of any other product on the premises.
- Premises and ventilation requirements: Applicant must report that the lounge has a humidor; is enclosed by solid walls or windows, a ceiling, and a solid door; and has a ventilation system that does not recirculate exhausted air or allow smoke to backstream into nonsmoking areas.
- Certificate issuance (initial): The tax commissioner shall issue a certificate to operate a cigar lounge upon receipt of a prescribed form reporting compliance with the premises and ventilation conditions. The commissioner may not require income/sales information with the initial application.
- Annual reporting and renewal: Before February 1 following a full calendar year of operation, the lounge must report the prior calendar year’s revenue from cigars and pipe tobacco as a percentage of annual gross income (receipts/sales). To qualify/renew, the lounge must generate at least 15% of annual gross income from sales of cigars and pipe tobacco. The commissioner may not renew a certificate absent supporting documentation, though the statute does not require the commissioner to independently confirm reported figures in routine cases.
- Definitions: Adds/clarifies definitions for “cigar” (detailed manufacturing/weight criteria), “cigar lounge” (business that generates ≥15% of annual gross income from cigar and pipe tobacco sales and holds a valid certificate), and references the existing definition of “pipe tobacco” (section 57‑36‑01).
- Confidentiality: Information reported to the tax commissioner is subject to the confidentiality provisions of section 57‑39.2‑23.
Who is affected
- Business owners/operators of cigar lounges and any establishments seeking to be certified as cigar lounges (including those selling pipe tobacco).
- Customers of cigar/pipe‑tobacco lounges (limits smoking to on‑site purchases of cigars/pipe tobacco).
- Tax Commissioner/Department of Revenue: administrative role in issuing certificates and reviewing documentation for renewals.
- Public/non‑smoking areas in establishments: protected by ventilation/enclosure requirements.
Procedural / timing notes
- Annual reporting deadline: before February 1 after a full calendar year of operation.
- The 15% revenue test is applied on an annual gross income basis (receipts or sales).
- The statute permits the commissioner to rely on lounge‑submitted reports to issue initial certificates but allows requiring supporting documentation for renewal.
Potential impacts (practical)
- Clarifies eligibility for cigar‑lounge status and adds pipe tobacco to qualifying products — may broaden some businesses’ ability to qualify.
- Requires lounges to retain and provide documentation supporting revenue percentages for renewal, creating modest recordkeeping and administrative compliance obligations.
- Protects nonsmoking areas via specific enclosure and ventilation standards.
Compiled from official sources — confirm details with the bill’s official record.
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