Indianapolis, IN Business Licensing & Operations: Tobacco Retail License (2026)
Key Facts
- License required
- Yes, to permit non-cigarette smoking
- Annual/application fee
- $215.00 each
- Revenue threshold
- 20% from cigar/Hookah sales
- Age rule
- No one under 21 employed/admitted
- Health dept notice
- Marion County Health Dept. required
- Cigarettes
- Not permitted at a tobacco specialty bar
Summary
A bar that wants to let customers smoke cigars or hookah tobacco on-site must first qualify as a licensed 'tobacco specialty bar' under Indianapolis City Code Chapter 988, since the city's smoke-free law otherwise bars smoking in bars. The license costs $215 a year and requires at least 20 percent of the bar's gross income to come from on-site cigar or hookah sales.
"Tobacco specialty bar" means a business that, as of January 1, 2012:(1)Is licensed to sell alcoholic beverages pursuant to a permit issued by the Indiana Alcohol and Tobacco Commission for on-premises consumption and in which the service of food is only incidental to the consumption of such beverages and the sale of cigars or Hookah tobacco;(2)Is engaged in the business of selling cigars or Hookah tobaccos and where at least twenty (20) percent or more of its total annual gross income over the preceding calendar year was derived from the on-site sale of cigars or Hookah tobaccos;(3)That is not physically located within a business otherwise required to be smoke free; and(4)That does not sell cigarettes or allow smoking of cigarettes on the premises. ... A tobacco business wishing to permit smoking of tobacco products other than cigarettes at its business location may apply to the license administrator for a license as a tobacco specialty bar, by making application under this chapter.
Official source re-checked September 7, 2026: no newer edition of the code had been published (publisher’s edition: Code of Ordinances: Supplement 47 Update 2).
Full Breakdown
Chapter 988's purpose, stated in Sec. 988-101, is to regulate certain businesses where use of non-cigarette tobacco products is permitted. Sec. 988-102(c) defines a 'tobacco specialty bar' as a business that, as of January 1, 2012, holds an Indiana Alcohol and Tobacco Commission on-premises permit where food service is only incidental to drinks and cigar or hookah sales, derives at least 20 percent of its total annual gross income from on-site cigar or Hookah tobacco sales, is not located inside a business otherwise required to be smoke-free, and does not sell cigarettes or allow cigarette smoking.
Sec. 988-103 lets a qualifying tobacco business apply to the license administrator for that license so it can permit smoking of non-cigarette tobacco products at its location. The application, filed by the business owner under penalty of perjury, must verify the business meets the Sec. 988-102(c) definition, admits and employs no one under 21, is not located inside a smoke-free business under Chapter 616, and has notified the Marion County Health Department that it intends to allow smoking (Sec. 988-104(a)). Tobacco vending machine sales and humidor rentals do not count toward the 20 percent revenue threshold.
00 (Sec. 988-104(b); Sec. 988-105). The license runs for the remainder of the calendar year and must be renewed annually by demonstrating the business still qualifies. A tobacco specialty bar license can be sold or transferred with the business as long as it keeps meeting the chapter's standards and stays in good standing on tax, liquor, and other applicable licensing (Sec. 988-106).
Violations & Fines
Sec. 988-107 subjects any violation of Chapter 988, including operating as a smoking-permitted tobacco specialty bar without a valid license or misrepresenting the 20 percent revenue threshold on the application, to the enforcement procedures and penalties in the Code's general provision, Sec. 103-3. A license the administrator refuses to issue or renew can be appealed to the Board of Business and Neighborhood Services by filing written notice within 20 days of the decision (Sec. 801-434).
Frequently Asked Questions
What is a tobacco specialty bar under Indianapolis's code?
How much does a tobacco specialty bar license cost?
Do vape shops need a tobacco specialty bar license to operate in Indianapolis?
Can employees or customers under 21 be present at a tobacco specialty bar?
Sources & Official References
Other rules in Indianapolis
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