Purchasing tax-exempt tobacco for resale

Last updated: April 10, 2019

If your business is located on First Nations land and holds a valid Exempt Sale Retail Dealer (ESRD) permit, the tax-exempt tobacco you purchase must:

You must keep records of your tobacco purchases and maintain accurate inventory records in case we ask to see them.


Your allocation is the amount of tax-exempt tobacco you can purchase per month from your authorized wholesaler under your ESRD permit. You will be notified of your tax-exempt tobacco allocation when you receive your ESRD permit.

The allocation for a new ESRD is based on factors such as:

  • The First Nations population and demand for tobacco in your area

  • The allocations and sales patterns of existing ESRDs in your area

Allocations are intended to allow ESRDs to purchase enough tobacco for resale to meet the demand of First Nations customers in a market area.

Allocation changes

You may request an increase in your allocation if you consistently sell out of your tax-exempt tobacco before the end of the month.

In special circumstances, such as a cultural event, you may request a temporary increase to your allocation due to a spike in demand for a short period of time.

To request an allocation increase, send us an email or letter explaining why you need an increase.

We may decrease your allocation if you consistently do not purchase your full allocation and your allocation exceeds the demand for tax-exempt tobacco in your market area.