HomeMy WebLinkAboutA042 - Staff Report regarding Device Delivery Seller PermitsITEM #:42
DEPT:POLICE
March 10, 2026
Staff Report
DEVICE DELIVERY SELLER PERMITS
BACKGROUND:
At its meeting on January 27, 2026, the City Council directed staff to place a memo regarding
Device Delivery Seller Permits on a future agenda for consideration (original memo attached).
During the 2024 legislative session, the State of Iowa enacted Senate File 345, which
regulates and taxes on certain glass- or metal-based smoking devices. These devices are
defined as equipment or products made wholly or partly of glass or metal that are designed for
inhaling—through combustion—tobacco, hemp, other plant materials, or controlled
substances. Vapor products and certain traditional smoking products (e.g., briar or corn-cob
pipes) are excluded from this definition.
As of January 2025, any retailer who intends to sell these devices to Iowa consumers via
delivery must obtain a Device Delivery Seller Permit from the Iowa Department of Revenue.
To obtain a Device Delivery Seller Permit, a retailer must already hold the following permits or
licenses:
Sales Tax Permit
Tobacco Retailer License
Device Retailer Permit (allows for the sale of devices in-store)
Delivery Seller Permit (allows for the delivery of nicotine or vapor products, but not the
devices themselves)
The application must include business information, permit type, business location, and
identification of principal officers or partners, as outlined in Iowa Administrative Code 701—
235.3.
Retailers selling these devices are also subject to a 40% excise tax on the sales price, in
addition to standard sales and use tax.
While the Device Delivery Seller Permit is issued by the Iowa Department of Revenue,
cities may choose to:
Agree to consider an application for each Device Delivery Seller Permit which is
submitted,
Establish zoning or land-use restrictions,
Decline to take action, allowing state permitting to proceed without local
involvement.
The municipality has the authority to deny each application for a permit. However, once
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a Device Delivery Seller Permit is applied for, the permit fee is not refundable should
the permit be denied or revoked or cancelled at a later time. The permit fee is currently
$1,500.
To date, the City has not received any applications for the delivery permit. However, there are
seven permitted device retailers in Ames who could potentially apply.
OPTIONS:
1. The City Council can agree to consider, on a case-by-case basis, any Device Delivery
Seller Permit application which is submitted.
2. The City Council can agree that a business owner can bring a Device Delivery Seller
Permit application to the City for consideration, but the City Council should first establish
a policy upfront that the City Council intends to deny all applications brought before
them.
Staff believes that under this option the City Council also should direct staff to notify
businesses seeking a Device Delivery Seller Permit from the City of this new policy so
they do not apply for the permit before the City Council and forfeit the $1,500 application
fee.
3. Decline to take action, allowing the State permitting to proceed without local
involvement.
STAFF COMMENTS:
The major policy decisions regarding this new permit are 1) does the City Council
support the sale of certain glass- or metal-based smoking devices and, if so, 2) what
level of involvement does the City Council want in this permit approval process?
If the City Council supports the delivery of these devices in the City and would like to
participate in the approval of these applications, then Option1 should be supported.
If the City Council opposes the delivery of these devices in the City under any
circumstances, yet still wants to go on record opposing the individual applications,
then Option 2 should be supported.
If the City Council would prefer not to become involved in approval process for these
applications, then Option 3 should be supported.
ATTACHMENT(S):
G._Huff_-_Device_Delivery_Seller_Permits.pdf
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Smart Choice Memo
Police Department 515.239.5133
Non
emergency 515 Clark Ave. P.O. Box 811
515.239.5130 Administration Ames, IA 50010
515.239.5429 fax www.CityofAmes.org
To: Mayor and City Council
Date: January 23, 2026
From: Geoff Huff, Chief of Police
Subject: Device Delivery Seller Permits
This memo provides an overview of Iowa’s newly established “Device Delivery
Seller Permit”, effective January 1, 2025, and requests City Council direction
regarding whether the City should adopt a local policy regarding approval or
denial of these permits.
During the 2024 legislative session, the State of Iowa enacted Senate File 345,
which regulates and taxes certain glass- or metal-based smoking devices.
These devices are defined as equipment or products made wholly or partly of
glass or metal that are designed for inhaling—through combustion—tobacco,
hemp, other plant materials, or controlled substances. Vapor products and
certain traditional smoking products (e.g., briar or corn-cob pipes) are excluded
from this definition.
As of January 2025, any retailer who intends to sell these devices to Iowa
consumers via delivery must obtain a Device Delivery Seller Permit from
the Iowa Department of Revenue. To obtain a Device Delivery Seller Permit, a
retailer must already hold the following permits or licenses:
Sales Tax Permit
Tobacco Retailer License
Device Retailer Permit (allows for the sale of devices in-store)
Delivery Seller Permit (allows for the delivery of nicotine or vapor
products, but not the devices themselves)
The application must include business information, permit type, business
location, and identification of principal officers or partners, as outlined in Iowa
Administrative Code 701—235.3.
Retailers selling these devices are also subject to a 40% excise tax on the sales
price, in addition to standard sales and use tax.
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While the Device Delivery Seller Permit is issued by the Iowa Department of
Revenue, cities may choose to:
Adopt a local review or approval process,
Establish zoning or land-use restrictions,
Decline to take action, allowing state permitting to proceed without local
involvement.
The municipality has the authority to deny each application for a permit.
However, once a Device Delivery Seller Permit is applied for, the permit
fee is not refundable should the permit be denied or revoked or cancelled
at a later time. The permit fee is currently $1,500. To date, the City has not
received any applications for the delivery permit. However, there are seven
permitted device retailers in Ames who could potentially apply.
Some jurisdictions are choosing to deny all applications for this delivery permit.
If it is the City Council’s intention to deny Device Delivery Seller Permits
altogether, staff would prefer to communicate this to current device
retailers so they do not apply for the new permit only to be denied by the
City Council and forfeit the $1,500 non-refundable application fee.
In order to receive the necessary feedback we are requesting, the staff
would recommend that this issue be placed on a future agenda.
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