Ontario levies a direct tax on every purchaser of tobacco products. Tobacco tax is collected by retailers from their customers and is remitted through their supplier.

Retailers must ensure that their wholesale supplier holds a valid wholesaler's permit, as there are penalties for purchasing tobacco products from a wholesaler who does not hold a wholesaler's permit.

Persons selling cigarettes and other tobacco products for resale are defined as wholesalers and must hold a wholesaler's permit.  There is no fee for this permit.

The stocking or selling of cigarettes that do not bear an Ontario tax mark is prohibited. Unauthorized possession of unmarked cigarettes may result in penalties, fines, imprisonment and forfeiture of the product.