The Excel file template is also available after you log in to file your report online. File both cigarettes and smokeless tobacco products PACT Act reports using our online services system. You will not owe the cigarette excise taxes if you personally bring less than 400 cigarettes (typically 20 packs or two cartons) into California for your own use or consumption, but you will still owe the use tax. For scheduling of video or phone appointments contact your local office. Tobacco products already face state taxes totaling $2.87 per pack of cigarettes in California, and the tax extends to products used for vaping. The amount of cigarette and tobacco products taxes due to the CDTFA by the distributor on the distribution of cigarettes and tobacco products. Note: the template may be used for filing periods August 2019 and after. A warehouse/storage location is not considered a location that distributes tobacco products unless direct tobacco products distributions are made from that warehouse/storage location. California has the 36th lowest state tobacco tax in the country — 87 cents per pack — which is far behind New York, where the tax is $4.35 a pack. The federal Prevent All Cigarette Trafficking (PACT) Act (effective June 29, 2010) amended the federal Jenkins Act (15 U.S.C. The excise tax is due on the in-state California licensed tobacco products distributor's wholesale cost of the tobacco products. Cigarette distributors pay the excise taxes to the State of California by purchasing cigarette tax stamps. This restriction does not apply to non-nicotine products such as eLiquids or eJuice that contain no nicotine. Distributors pass the cigarette taxes on to their customers, as part of the retail selling price of the cigarettes. You will receive an email acknowledging that the Attorney General has received and recorded your email address. The online seminar webpage also allows you to electronically submit your cigarette or tobacco products questions directly to the CDTFA for a timely response. The cost does not include freight or transportation charges for shipment from the supplier to the distributor. The date you sold the cigarettes or tobacco products. For more information about our inspections and your rights, see Publication 152, Cigarette and Tobacco Products Inspections. Since Business D sells directly to consumers, Business D is also considered a tobacco products retailer. If you do not file on time, the CDTFA cannot consider your claim, even if you overpaid the tax. Please note, sales transactions of cigarettes, tobacco or nicotine products, including electronic cigarettes sold with nicotine, between retailers are prohibited. Transfer logs must be prepared at the time of transfer. Tobacco-related health education programs and disease research, Medical and hospital care and treatment of patients who cannot afford those services, and for whom payment will not be made by any private coverage or federal program, and. There are some reporting requirements imposed on manufacturers and there are additional restrictions which carry potential tax consequences regarding product promotions and samples provided to recipients at no cost, as set forth in Regulation 4081. An out-of-state distributor who is not engaged in business in California may apply for a distributor license (R&TC section 30140.1) for licensing and tax reporting purposes. (. If you file after July 3, 2017, you will owe interest and penalties. You are also a “delivery seller” if you are located in California making such sales and thus, in addition to the distributor's licenses required, you would be required to hold a retailer's license. If you operate from a catering truck, lunch wagon, or other mobile facility, you may not hold a California Cigarette and Tobacco Products Retailer's License and therefore, cannot sell cigarettes or tobacco products from your truck, wagon, or other mobile facility in California. If at any time you need assistance with topics included in this guide – or with topics not included – feel free to contact us by telephone or email. CDTFA will temporarily close its in-person public counter service to protect public health. It is free to use the online system. In addition to the license, if Wholesaler B sells these products directly to consumers, Wholesaler B is required to register with the CDTFA for a Cigarette and Tobacco Products Retailer's License. Go paperless! All applicable cigarette and tobacco products tax returns, reports, and schedules must be filed even if no transactions or deliveries were made during the reporting period. Example 1: Business A purchases untaxed eLiquids containing nicotine from a manufacturer (either in-state or out-of-state). Please note: if a retailer sells non-nicotine vape liquids and no other cigarettes or tobacco products, the retailer is required to hold a valid retailer's license. The primary excise taxes on tobacco in California are on cigarettes, though many states also have taxes on other tobacco products like cigars, snuff, or e-cigarettes. Maintaining, occupying, or using any type of business location. Business H (the licensed distributor) owes the tobacco products tax to the CDTFA upon distribution in California. behind a locked wire-cage door, or similar encumbrance. The tax shall not apply to the use or consumption of such cigarettes or tobacco products by the institution or by the veteran patients or domiciliaries (, Sales of cigarettes or tobacco products by the manufacturer to a licensed distributor (, Sales by a distributor to a common carrier engaged in interstate or foreign passenger service. A “delivery sale” means any sale of cigarettes or smokeless tobacco to a consumer if: For example, you are a “delivery seller” if you are a vendor located outside of California and sell cigarettes or smokeless tobacco products directly to a consumer located in California. In short, cigarettes are taxed per each cigarette (stick) distributed and tobacco products are taxed based on the wholesale cost to the distributor. A manufacturer is a person who manufactures cigarettes and/or tobacco products sold in this state (Business and Professions Code section 22971(l)). You conspicuously display your licenses at each location in a manner visible to the public (retailers only). This guide will help you better understand the tax and licensing obligations for retailers, distributors, wholesalers, manufacturers, importers, and consumers of cigarettes and tobacco products. Tobacco products wholesalers cannot purchase or be in possession of untaxed tobacco products. A tobacco products wholesaler may not hold a distributor's license. Wine, for example, faces a rate of 20 cents per gallon. In addition, the cigarette floor stock tax did not apply to tobacco products such as cigars, pouch tobacco, snuff, chewing tobacco, and as of April 1, 2017, little or small cigars. inside a locked cabinet, safe, or similar secured storage container, or. Business A is considered a tobacco products distributor and owes the tobacco products tax to the CDTFA upon distribution in California. ): Please note: if a retailer sells non-nicotine vape liquids and no other cigarettes or tobacco products, the retailer is still required to hold a valid retailer's license. Only purchase cigarettes affixed with valid California tax stamps and California tobacco products tax-paid products. The Retailer & Wholesaler, Distributor, Manufacturer & Importer, and Consumer sections provide detailed information specific to each person along the cigarette and tobacco products supply chain. The customer would owe the tobacco products tax based on the wholesale cost, which in this situation would be the amount paid to Company C, not including any discounts or trade allowances. For purposes of this law, "unaffixed stamps" means tax-paid cigarette tax stamps purchased by a licensed distributor and previously affixed to cigarette packs. No. For example, vape liquids that do not contain any nicotine are not subject to the tobacco products tax; however, they are subject to retail licensing. Having a representative in California who sells, delivers, or takes orders of tobacco products. Increased funding for existing healthcare programs and services, Use prevention programs among all Californians, but particularly the youth, and. The Attorney General must provide distributors and wholesalers with written notice of any changes to the directory after it is first published (R&TC section 30165.1(c)(3)). These entities may purchase/sell cigarettes and tobacco products only from/to other licensed entities along the supply chain. The name, address, telephone number, and license number of the distributor or wholesaler from whom you purchased the cigarettes or tobacco products (it is illegal to buy cigarettes or tobacco products from a person who does not have a license). In the case of water shipments, the name of the vessel and the number of the steamship bill of lading. Please note: The name, address, telephone number, and license number of the wholesaler. Justin Garosi; Brian Uhler Evasion of tax liabilities over $25,000 in a 12-month period is a felony. Vape liquids such as eLiquid or eJuice that do not contain nicotine or tobacco. In California, cigarettes are subject to a state excise tax of $0.87 per pack of 20. Ranked 46th highest. You may be required to file other returns or reports with the CDTFA. Consumers or users will be liable for the payment of tax to the … The undersigned certify that, as of June 28, 2019, the internet website of the California Department of Tax and Fee Administration is designed, developed and maintained to be in compliance with California Government Code Sections 7405 and 11135, and the Web Content Accessibility Guidelines 2.1, or a subsequent version, June 28, 2019, published by the Web Accessibility Initiative of the World Wide … Cigarettes and tobacco products may not be sold at a location that is licensed as a cannabis business. Products wrapped in tobacco or with a cover made mostly of tobacco (for example, cigars) are not cigarettes when they weigh more than three pounds per thousand sticks. A retailer that adds an additional retail location will renew the retailer's license for that retail location based on a 12-month period beginning in the month that the retailer's license for the first retail location was obtained. For more information regarding the referendum, please visit the SOS website. The transferring retailer's address and license number where the original purchase was made. These funds are transferred to the General Fund. The CDTFA adopted Regulation 4076, Wholesale Cost of Tobacco Products, to provide additional guidance. Effective January 1, 2017, it is a misdemeanor for any person to possess, sell or offer to sell, or buy or offer to buy, any false, fraudulent, or "unaffixed" cigarette tax stamps. See the California Department of Public Health's Tobacco 21 website for more information. Each unit is separately packaged and each unit is labeled with a UPC barcode. However, if a retailer sells tobacco paraphernalia, as defined under section 22962(a)(2) of the Business and Professions Code, and does not sell cigarettes or tobacco products, the retailer is not required to hold a valid retailer's license. As a result, tobacco products distributors are also required to hold a license under the Cigarette and Tobacco Products Tax Law for tax reporting and remitting purposes. See. A cigarette distributor may not hold a wholesaler's license. A cigarette distributor is required to affix the California cigarette tax stamp to each package of cigarettes prior to distribution to indicate that taxes have been paid. In the absence of an arm's-length transaction, the methods discussed in subdivision (c) of Regulation 4076 may be used to determine the correct wholesale cost. A proposed referendum has been filed with the Secretary of State (SOS) challenging SB 793. A consumer is required to report the amount of untaxed cigarettes and/or tobacco products received in the preceding calendar quarter and remit the amount of tax due (Revenue and Taxation Code section 6451, 6452, and 30187). A distribution includes the first sale, use, or consumption of untaxed tobacco products in California (Revenue and Taxation Code section 30008). This licensing requirement does not apply to cannabis or cannabis products. Tobacco taxes California is ranked 11th in the U.S. for its cigarette tax of $2.87 per pack (enacted April 2017), compared with the national average of $1.82. Distributors of cigarettes or tobacco products must: The PACT Act is a federal law that amends the Federal Jenkins Act. It also required distributors to take inventory of all cigarette tax stamps (affixed and unaffixed) in their possession or control as of 12:01 a.m. April 1, 2017, to report and determine the amount of cigarette stamp adjustment tax due. Business K is considered a distributor, is required to hold a Tobacco Products Distributor's License, and owes the tobacco products excise tax to the CDTFA upon distribution in California. A person may only hold a distributor's license or wholesaler's license, not both. For regular gasoline, there is a 50.50 cent per gallon excise tax. Important Note: We have incorporated new standards into cigarette tax reporting. Transfer logs must include: These retailer's product transfer requirements do not apply to tobacco products that are not subject to the tobacco products tax. Instead, these products are considered tobacco products. Effective April 1, 2017 (due to Proposition 56, November 2016), the cigarette tax rate increased from $0.0435 to $0.1435 per cigarette. In addition, cigarette and tobacco products wholesalers are required to hold a license under the Cigarette and Tobacco Products Tax Law for information reporting purposes. © 2021 SalesTaxHandbook. The CDTFA administers the Cigarette and Tobacco Products Internet Program to collect the California state cigarette and tobacco products tax and use tax from California consumers purchasing untaxed cigarettes and/or tobacco products from out-of-state internet retailers and/or by way of mail or telephone for self-consumption in California. This tax has applied to e‑cigarettes since April 1, 2017. You will then have 30 days to pay or dispute the liability. On average, states charge $1.73 of taxes per pack of 20 cigarettes. A person may not sell, offer, possess for sale, or import for personal consumption any cigarettes or RYO tobacco in California unless the manufacturer and brand family are listed in that directory (except if the product is solely for sale out-of-state). A detailed description of each product transferred (for example, brand, type of package, flavor, style, etc.). Effective April 1, 2017, distributions of tobacco products containing nicotine are subject to the tobacco products tax. Any building from which cigarettes or tobacco products are sold at retail. Wholesalers may not sell to any person who is not licensed with the CDTFA or whose license has been suspended or revoked. Distributors receive a purchase discount of 0.85 percent, which is capped at the first one dollar ($1.00) in denominated value to help offset the costs of applying the stamps. Example 3: Distributor D acquires tobacco products free of charge and reports no wholesale cost for the products on its Tobacco Products Distributor Tax Return. An out-of-state person selling at an out-of-state location is not a wholesaler and may not be licensed as a cigarette wholesaler. A wholesaler may not hold a distributor's license. The quantity of each product transferred. A tobacco products wholesaler is a person, other than a licensed tobacco products distributor, who sells tax-paid tobacco products for resale at a specific California location. Example 2: Business B purchases untaxed eLiquids containing nicotine from an out-of-state vendor who is not licensed by the CDTFA as a tobacco products distributor and sells to stores in California. SalesTaxHandbook visitors qualify for a free month by signing up via our partner program here: California has average taxes on cigarettes compared to other states in the United States, 52.75% of sales price but not to exceed $402.60. The non-Indian purchaser must file a return with the CDTFA to report purchases and pay applicable California cigarette and tobacco products excise and use taxes. Follow the links below for more information about the topics covered in this guide, as well as other information you might find helpful: Select one of the following links below for a current list of licensed California cigarette and tobacco products distributors, wholesalers or retailers. It revises provisions governing the collection of taxes and trafficking by requiring Internet and other remote sellers of cigarettes and smokeless tobacco products to comply with the same laws that apply to local cigarette and tobacco products sellers. Examples of secured, segregated and separated from retail stock include, but are not limited to, the following areas: It is presumed that all cigarette and tobacco products no longer in a distributor's possession have been distributed. We strive to provide a website that is easy to use and understand. Take a look at the current tobacco tax rates by state. To help prevent cigarette tax evasion, the CDTFA was given the authority (Assembly Bill 1901) to seize and destroy any "unaffixed" cigarette tax stamps aggregated for reuse (for example, a collection or accumulation of "unaffixed" stamps for reapplying to untaxed packs of cigarettes). 2 packs Black & Mild cigars, wine flavor (5 ea). An importer is any purchaser who purchases for resale in the United States tobacco products manufactured outside the United States for the purpose of making a first sale or distribution within the United States (Revenue and Taxation Code section 30019). For PACT Act filing requirements, see Tax Return, Report, Schedule Filings and Payments, under the Getting Started section. Evidence of delivery of cigarettes or tobacco products to a destination outside of California must be retained by the distributor. Keep complete and legible purchase invoices (and sales invoices if you are a wholesaler) for cigarettes and tobacco products for four (4) years. For more information, see Publication 407, Master Settlement Agreement. However, if a retailer owns more than one store and the retailer's licenses are held by the same legal entity, that retailer may be allowed to transfer cigarettes or tobacco products between stores belonging to the same legal entity so long as transfer logs are maintained. To purchase cigarette tax stamps, you must register as a cigarette distributor. Distributors are required to affix the tax stamp to each package of cigarettes before distribution. Smoking or pipe tobacco (including shisha), Any product containing, made of, or derived from any amount of tobacco that is intended for human consumption (, Any product containing, made of, or derived from any amount of, Any component, part, or accessory of an electronic cigarette that is used during the operation of the device when sold in combination (for a single price) with nicotine (for example, a battery used in the operation of the device sold with nicotine for a single price), Nicotine does not include any food products as defined in, Electronic cigarettes do not include delivery devices (for example, eCigarettes or vape pens) sold individually or. Usage is subject to our Terms and Privacy Policy. Examples of secured, segregated, and separated from retail stock include, but are not limited to, the following areas: Tobacco products placed inside a walk-in humidor displayed for sale to consumers are considered retail stock. Any component, part, or accessory of a tobacco product, whether or not sold separately. Please visit our Cigarette and Tobacco Products Online Filing webpage for resources to help you prepare for this transition. A retailer includes a person who operates vending machines from which cigarettes or tobacco products are sold in California (Business and Professions Code (BPC) section 22971(p)). This licensing requirement does not apply to cannabis or cannabis products such as vape devices, pens, or accessories that are intended and designed for consuming cannabis or cannabis products. All licensees registered under the California Cigarette and Tobacco Products Licensing Act of 2003 must renew their license(s) annually. The date the cigarettes or tobacco products are sold. Business K may not purchase nicotine products from an unlicensed manufacturer who is required to have a license. For additional information on the wholesale cost, please read Regulation 4076, Wholesale Cost of Tobacco Products. CDTFA staff contacted the distributor and provided instructions on how to return the stamps. Distributors were required to pay a cigarette tax stamp adjustment tax on their inventory of affixed and unaffixed cigarette tax stamps. The Attorney General posts the California Tobacco Directory online on their California Tobacco Directory page. In addition, it is illegal for any person to affix or cause to be affixed any tax stamp or meter impression to a pack of cigarettes or pay the tax on RYO tobacco unless the tobacco products manufacturer and brand family are listed in the directory. A wholesaler's license is required if you purchase tax-paid cigarettes or tobacco products for resale to in-state licensed retailers and other wholesalers. With proper documentation, sales of tobacco products which are shipped to a buyer outside of California may be claimed as an exempt sale. Example 2: Distributor C purchases tobacco products from a subsidiary corporation in which it owns or controls more than 50 percent of the voting stock. When multiple cans of chewing tobacco, for example, are sold by a manufacturer to a licensed distributor in a one-pack unit commonly referred to as “Buy 1, Get 1 Free,” or “Three for the Price of Two,” what is the measure of tax? A retailer's license is valid for a 12-month period. Once the cigarette packs are stamped, distributors can sell the stamped cigarettes to wholesalers, retailers, and other distributors. However, if Distributor A sells untaxed eLiquid or eJuice products that do contain nicotine or tobacco, Distributor A is required to register with the CDTFA for a tobacco products distributor's license and Cigarette and Tobacco Products Distributor's License. For example, vape liquids that do not contain any nicotine are not subject to the tobacco products tax; however, they are subject to retail licensing. Submit to the CDTFA a list of all brand families that you manufacture or import. Cigarette and tobacco products distributors, wholesalers, and retailers must pay an annual fee per location to renew their license. Thus, the sale of ENDS that do not contain nicotine or are not sold with nicotine are not subject to the California excise tax on tobacco products. With a tax of just 87 cents per pack of cigarettes, California, the country’s most populous state, ranks 37th among the states in its tobacco tax. eCigarettes and vape liquids containing nicotine were taxed as tobacco products as of April 1, 2017. As a manufacturer or importer of cigarettes and tobacco products, you must: If you purchase cigarettes and/or tobacco products for your own use from outside California or over the Internet without paying both the California cigarette and tobacco products excise taxes and California use tax at the time of your purchase, you are required to file a return online to report your purchases and pay those taxes to the CDTFA. A cigarette distributor is a person who purchases untaxed (unstamped) cigarettes and makes the distribution of cigarettes in this state. Sales invoices from licensed distributors must include a statement that indicates the California tobacco products taxes have been paid on the tobacco products sold. For example, vape liquids that do not contain any nicotine are not subject to these requirements; however, they are subject to retail licensing. Licensed distributors may distribute little cigars that are affixed with a cigarette tax stamp as “tax paid” tobacco products until their inventories of these stamped products are exhausted. Example 7: Business J manufactures nicotine vape liquids outside of California and sells them to Business K located in California for resale. California Wine Tax - $0.20 / gallon California's general sales tax of 6% … EFFECTIVE IMMEDIATELY WITHDRAWAL OF SPECIAL NOTICE L-698 Clarifying the Wholesale Cost Basis for Out-of-State Licensed Tobacco Products Distributors Effective October 1, 2019, Reminder: New Reporting Requirements for Cigarette Tax Reporting Effective May 2020 Reporting Period, New Tax Rate on Other Tobacco Products Effective July 1, 2020 through June 30, 2021, Enhanced California Cigarette Tax Stamp Available March 2020, New Reporting Requirements for Tobacco Products Distributors Effective January 1, 2020, Cigarette Tax Filing Resources Are Available Now For New Reporting Requirements Effective May 2020 Filing Period, Cigarette Wholesaler's Return Federation of Tax Administrators' Uniformity Standards Effective May 2020 Filing Period, Cigarette Distributor’s Tax Report Federation of Tax Administrators' Uniformity Standards Effective May 2020 Filing Period, Cigarette Manufacturer’s Tax Return Federation of Tax Administrators' Uniformity Standards Effective May 2020 Filing Period, Clarifying the Wholesale Cost Basis for Out-of-State Licensed Tobacco Products Distributors Effective October 1, 2019, Revisions to the California Cigarette Tax Stamp Ordering Process and Launch of New Online Services Effective August 12, 2019, Important Information for California Cigarette Stamp Purchasers – Stamp Order System Down August 6, 2019 10:00 A.M. to August 12, 2019 12:00 Noon, New Tax Rate on Other Tobacco Products Effective July 1, 2019 through June 30, 2020, Cigarette Manufacturer's Tax Return and License Renewal Will Move to the New Online Services System Effective August 12, 2019, Cigarette Distributor's Tax Report and License Renewal Will Move to the New Online Services System Effective August 12, 2019, Cigarette Wholesalers Return and License Renewal Will Move to the New Online Services System Effective August 12, 2019, Revisions to the Common Carrier's Report of Cigarette Deliveries and Launch of New Online Filing Effective August 12, 2019, Tobacco Products Manufacturer/Importer Tax Return and License Will Move to the New Online Services System Effective August 12, 2019, Revisions to the Tobacco Products Distributor Tax Return and Launch of new Online Filing Effective August 12, 2019, Your Tobacco Products Wholesaler License Will Move to the New Online Services System Effective August 12, 2019, Prevent All Cigarette Trafficking Act (PACT Act) Reports Will Move to the New Online Services System Effective August 12, 2019, Cigarette and Tobacco Products Distributors May Not Hold a Wholesaler License, New Tax on Tobacco Products Effective July 1, 2018 through June 30, 2019, Changes to Online Services: Cigarette and Tobacco Products Retailer License Fee Accounts, Important Information for California Cigarette Tax Stamp Purchasers, Online Filing Begins for the Cigarette and Tobacco Products Internet Purchaser Program, Tobacco Product Sales by Out-of-State Distributors to In-State Distributors, Clarifying Retail Stock for Cigarette and Tobacco Products Tax Purposes, New Tax Rate on Other Tobacco Products Effective July 1, 2017 through June 30, 2018, New Licensing Requirements for Manufacturers/Importers, Distributors, and Wholesalers of Nicotine Products Beginning April 1, 2017, Cigarette and Tobacco Products Tax Rate Increase and New Products Subject to Tax, New Law Helps Prevent Cigarette Tax Evasion, New License Requirement Beginning January 1, 2017, for Retailers of Electronic Smoking of Vaping Devices and Related Products, Clarifying the Wholesale Cost of Tobacco Products, Online Seminars and Instructor-led Classes, Free Instructor-led Cigarette and Tobacco Classes, Online Seminars for Retailers, Wholesalers and Distributors, Cigarette & Tobacco Products License Suspensions, Proposition 56 – Summary of Revenues and Expenditures, Supplemental Report – Cost of Programs Related to Cigarette and Tobacco Products, Cigarette and Tobacco Products License Data Requests, See a map of California Cigarette and Tobacco Products Licensees, Bureau of State Audits Report Number 2005-034, June 2006, Cigarette and Tobacco Products Inspections, Notice of Cigarette and Tobacco Products Seizures, U.S. Food and Drug Administration – Tobacco Products, STAKE (Stop Tobacco Access to Kids Enforcement), Tobacco Control Laws that Affect Retail Businesses 2017, Cigarette and Tobacco Products Retailer's License, Cigarette and Tobacco Products Wholesaler's License, Cigarette Manufacturer's/Importer's License, Cigarette and Tobacco Products Distributor's License, Tobacco Products Manufacturer's/Importer's License, Cigarette and Tobacco Transporter's Permit, Cigarette and Tobacco Products Internet Excise/Use Tax Account, Nicotine and non-nicotine eJuice or eLiquid (vape liquids), Electronic device, component, part, or accessory sold, Tobacco Paraphernalia (cigarette paper, pipes, cigarette rolling machines), Cannabis products such as vape devices, pens, or 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