New Information – Beginning April 1, 2017, Proposition 56, The California Healthcare, Research and Prevention Tobacco Tax Act of 2016, provides these changes:

  • The cigarette tax rate increases from $0.87 to $2.87 per pack of 20 cigarettes. Please note, the tobacco products tax rate will not change until July 1, 2017. See tax rate page for current rate.
  • Retailers and wholesalers must take an inventory of all stamped cigarette packages, and distributors must take an inventory of all affixed and unaffixed California cigarette tax stamps in their possession/control at 12:01 a.m. on April 1, 2017, for determining the additional cigarette tax. See BOE's March 2017 special notices to retailers/wholesalers and distributors for additional details.
  • The retailer and wholesaler cigarette floor stock tax return and the distributor cigarette stamp adjustment tax return and payment are due July 1, 2017. Tobacco products, including little cigars, are not subject to the cigarette floor stock/stamp adjustment tax and should not be reported on these tax returns.
  • Tobacco products subject to the tobacco products tax include:
    • Any tobacco or nicotine products
    • Vapor products sold with nicotine
    • Little cigars
    See the Tobacco Products heading below for more information.

Helping your business succeed is important to the Board of Equalization. The taxes and fees you collect and pay to the state help fund state and local services and programs that are important to you and your community.

Understanding the tax and fee issues specific to cigarette and tobacco products businesses can be time-consuming and complicated, so it is important that you get the information you need in a timely and understandable way, helping you focus on starting and growing your business.

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.

Cigarettes

Under the California Cigarette and Tobacco Products Tax Law (Revenue and Taxation Code section 30003): , "cigarette" is defined as a rolled product for smoking of any size or shape that:

  • Is made of any tobacco, flavored or not, and
  • Has a wrapper made of paper or another material.

Exception: Flavored cigarettes are banned in the United States (see the Industry Topics section for more information). 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. Instead, these products are considered tobacco products.

Tobacco Products

In November 2016, California voters approved Proposition 56, which amended the definition of "tobacco products," under the California Cigarette and Tobacco Products Tax Law (Revenue and Taxation Code section 30121) to include additional tobacco products (identified as "New!" below). Beginning April 1, 2017, the distribution of these newly classified tobacco products will be subject to the tobacco products tax. Tobacco products1 include, but are not limited to:

  • Smoking or pipe tobacco (including shisha)
  • Chewing tobacco
  • Snuff
  • Cigars
  • Little cigars (little cigars were previously considered cigarettes for taxation purposes and required a cigarette tax stamp prior to the passage of Proposition 56; however, beginning April 1, 2017, little cigars will be taxed as a tobacco product) New!
  • Any product containing, made of, or derived from any amount of tobacco that is intended for human consumption (prior to the passage of Proposition 56, tobacco products, other than cigars, smoking or chewing tobacco, or snuff, had to contain at least 50 percent tobacco) New!
  • Any product containing, made of, or derived from any amount of nicotine2 that is intended for human consumption and sold with (for a single price) or without a delivery device or system. New!
  • Electronic cigarettes3 or any device or delivery system sold in combination with nicotine (for a single price) New!
  • 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). New!

1 Tobacco products do not include cigarettes. Tobacco products do not include any product that has been approved by the United States Food and Drug Administration for sale as a tobacco cessation product or for other therapeutic purposes (for example, nicotine patches) when that product is marketed and sold solely for such approved use.

2 Nicotine does not include any food products as defined in Revenue and Taxation Code section 6359.

3 Electronic cigarettes do not include delivery devices (for example, eCigarettes or vape pens) sold individually or with a liquid or substance containing 0mg nicotine and are not considered tobacco products for taxation purposes; however, they are subject to retail licensing (see "Expanded Definition of Tobacco Products").

Expanded Definition of Tobacco Products for Licensing Purposes

As of June 9, 2016, state law expanded the definition of tobacco products, for cigarette and tobacco products retail licensing purposes, to include:

  • Any product containing, made of, or derived from tobacco or nicotine that is intended for human consumption.
  • Any electronic smoking or vaping device that delivers nicotine or other vaporized liquids.
  • Any component, part, or accessory of a tobacco product, whether or not sold separately.

Examples include, but are not limited to, electronic cigarettes, atomizers, vaping tanks or mods, and eLiquids or eJuices.

Effective January 1, 2017, any retailer that sells any product included in the expanded definition of tobacco products is required to obtain and maintain a Cigarette and Tobacco Products Retailer's License from the Board of Equalization (BOE) in order to engage in the retail sale of these products.

Imposition of Tax

The cigarette and tobacco products tax is paid by a distributor upon the first distribution of cigarettes and tobacco products in California.

A distribution includes the first sale, use, or consumption use of untaxed cigarettes, or untaxed tobacco products in California, and the placing of untaxed cigarettes or untaxed tobacco products into a vending machine or retail stock in California (Revenue and Taxation Code Section 30008).

Proposition 56 expanded the definition of "tobacco products" for tax purposes to include any product containing, made of, or derived from tobacco or nicotine, little cigars, and electronic cigarettes that are sold in combination (for a single price) with nicotine (including any component, part, or accessory of an electronic cigarette sold in combination with nicotine). Beginning April 1, 2017, the distribution of these products is subject to the tobacco products tax.

Difference in How Cigarettes and Tobacco Products Are Taxed

Two types of excise taxes are collected on cigarettes and tobacco products distributed in California: 1) the cigarette tax, and 2) the cigarette and tobacco products surtaxes. Each tax is described below, according to the type of product sold.

Cigarettes

Cigarettes are subject to both the cigarette tax and two cigarette and tobacco products surtaxes, collectively referred to as cigarette taxes. The taxes are assessed on each cigarette distributed in California.

Distributors pay the taxes by purchasing cigarette tax stamps from the BOE. Distributors are required to affix the tax stamp to each package of cigarettes before distribution. In turn, they receive a purchase discount of 0.85% of the total tax value per purchase order to help offset the cost of affixing cigarette tax stamps. Beginning April 1, 2017, Proposition 56 caps the 0.85 percent discount for cigarette tax stamps and meter readings to the first one dollar ($1.00) in denominated value of the stamp or meter reading (Revenue and Taxation Code section 30166). Distributors pass the cigarette taxes on to their customer, and the taxes become part of the retail selling price of the cigarettes. The cost of the cigarette tax stamp includes all of the aforementioned taxes.

Tobacco Products

The tax on other tobacco products, also known as OTP, is subject to two surtaxes. The BOE determines one combined rate annually that is equivalent to the combined OTP tax rate of the taxes applied to cigarettes. The total tobacco products tax is imposed upon the first distribution of tobacco products at a rate determined annually by the BOE and is paid by tobacco products distributors.

A tobacco products distributor is required to calculate the tobacco products tax due based on the wholesale cost of the tobacco products distributed and remit the amounts owed each month on tax return forms provided by the BOE.

How the Revenue is Used

In November 2016, California voters approved Proposition 56, which increases the cigarette tax rate. Effective April 1, 2017, the cigarette tax rate will increase from $0.0435 to $0.1435 per cigarette. Typically, a pack of cigarettes contains 20 sticks of cigarettes. Using this example, the cigarette tax on a pack of 20 cigarettes will increase from $0.87 to $2.87.

Of the total two dollars and eighty-seven cents ($2.87) cigarette tax rate per package of twenty (20) cigarettes (or equivalent amount of tobacco products):

  • Two dollars ($2.00) are deposited into the California Healthcare, Research and Prevention Tobacco Tax Act of 2016 Fund (Prop. 56)
    These funds are to be used for various purposes and programs, including:
    • Increased funding for existing healthcare programs and services,
    • Use prevention programs among all Californians, but particularly the youth, and
    • Medical research for cancer, heart and lung tobacco-related diseases.
  • Fifty cents ($0.50) are deposited into the California Children and Families Trust Fund (Prop. 10)
    These funds are used for programs that encourage proper childhood development, including:
    • The development of professional and parental education and training,
    • Informed selection of childcare,
    • Development and education of childcare providers, and
    • Research into the best practices and standards for all programs and services relating to early childhood development.
  • Twenty-five cents ($0.25) are deposited into the Cigarette and Tobacco Products Surtax Fund (Prop. 99)
    These funds may only be used for the following purposes:
    • 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
    • Programs for fire prevention; environmental conservation; protection, restoration, enhancement, and maintenance of fish, waterfowl, and wildlife habitat areas; and enhancement of state and local parks and recreation.
  • Ten cents ($0.10) are deposited into the Cigarette Tax Fund
    • These funds are transferred to the General Fund.
  • Two cents ($0.02) are deposited into the Breast Cancer Fund
    • These funds support breast cancer-related research and breast cancer screening for uninsured women.

Cigarette and tobacco products license fees are deposited in to the Cigarette and Tobacco Products Compliance Fund solely for the purpose of implementing, enforcing, and administering the California Cigarette and Tobacco Products Licensing Act of 2003.

How to Use This Guide

The Retailer & Wholesaler, Manufacturer & Importer, Distributor, and Consumer sections provide detailed information specific to each person along the cigarette and tobacco products supply chain.

See the Industry Topics and Resources sections for helpful information and references.

If You Need Help

If at any time you need assistance with topics included in this guide – or have other related questions – feel free to contact us by telephone or email for assistance. Contact information and hours of operation are available in the Resources section.

If you have suggestions for improving this guide, please contact us by email.

You must obtain and maintain a California cigarette and tobacco products license in order to sell cigarettes or tobacco products in California. Distributors, wholesalers, and retailers of cigarettes and/or tobacco products must obtain a separate license for each location where cigarettes or tobacco products will be sold. In addition to a license, a separate cigarette and/or tobacco products BOE account may be required. Depending on your business operations, you may be required to obtain more than just a California cigarette and tobacco products license. Before completing and submitting an application for a Cigarette and Tobacco Products Retailer's License, retailers are advised to check with their local health department for any local tobacco licensing requirements, which may be more restrictive.

You may need a seller's permit as well as multiple cigarette and tobacco products licenses and accounts. For example:

  • If you are a distributor that sells directly to consumers, in addition to a seller's permit, distributor's license, and account, you will also need to obtain a retailer's license.
  • If you are a manufacturer/importer that sells to wholesalers and retailers, in addition to a seller's permit, manufacturer/importer's license, and account, you will need to obtain a distributor's license.
  • If you are a wholesaler that sells directly to consumers, in addition to a seller's permit, wholesaler's license, and account, you will need to obtain a retailer's license.

Please note: you must obtain a distributor's license before you purchase any untaxed cigarettes or tobacco products.

* Not needed for licensed cigarette and tobacco products distributors.
If you… Permit, License, and Account Requirements
Sales & Use Taxes Cigarette Tax/Tobacco Products Tax
Sell cigarettes and/or tobacco products at retail Seller's Permit Cigarette and Tobacco Products Retailer's License
Sell electronic cigarettes, vape pens, vaporizers, nicotine liquid, etc. at retail Seller's Permit Cigarette and Tobacco Products Retailer's License
Sell cigarettes at wholesale Seller's Permit Cigarette and Tobacco Products Wholesaler's License* Cigarette Wholesaler's Account*
Import cigarettes from outside
of the United States
Seller's Permit Cigarette Manufacturer/Importer's License Cigarette Distributor's Account
Manufacture cigarettes Seller's Permit Cigarette Manufacturer/Importer's License Cigarette Manufacturer's Account
Stamp and distribute cigarettes to wholesalers and/or retailers Seller's Permit Cigarette and Tobacco Products Distributor's License Cigarette Distributor's Account
Sell tobacco products at wholesale Seller's Permit Cigarette and Tobacco Products Wholesaler's License* Tobacco Wholesaler's Account*
Import and/or manufacture tobacco products Seller's Permit Tobacco Products Manufacturer/ Importer's License Tobacco Manufacturer/Importer's Account
Distribute tobacco products Seller's Permit Cigarette and Tobacco Products Distributor's License Tobacco Products Distributor's Account

Online Registration

Register for your cigarette and tobacco products license, a seller's permit, and any other permits, licenses, or accounts using the BOE's online registration system. Online registration is the convenient way to register and is available 24 hours a day. Upon registration, you will be required to pay the applicable license fees.

License application fees for retailers, wholesalers, and distributors increased on June 9, 2016. This is a result of Assembly Bill x2-11 which was signed into law on May 4, 2016.

License Renewals

A license is not assignable or transferable and must be renewed annually.

A retailer's license is valid for a 12-month period. 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 the retailer's license for the first retail location was obtained.

A wholesaler or distributor's license is valid for one calendar year (January through December).

Approximately 60 days prior to your license expiring, the BOE will send you an email and paper notice reminding you to renew your license. The BOE will send you another reminder email notice approximately 30 days prior to your license expiring. If you do not renew your license before your license period expires, the BOE will send you a final email notice indicating that your license has expired and the date at which it expired. It is important to renew your license before your license expires, as you must have a valid license in order to purchase or sell cigarettes and/or tobacco products at your business location.

You can renew your license by logging in with your User ID and Password through our online registration system or Log In page. Cigarette and tobacco products distributors, wholesalers, and retailers must pay an annual fee per location to renew their license. License fees may not be prorated.

Beginning January 1, 2017, license renewal fees are imposed on retailers and increased for wholesalers and distributors. This is a result of Assembly Bill x2-11, which was signed into law on May 4, 2016.

Remember, you may not sell cigarettes and/or tobacco products without a valid cigarette and tobacco products license. For more information about online license renewals, please see our frequently asked questions.

Tax Rates and License Fees

Visit the tax rate page to view current and historical cigarette and tobacco products tax rates and license fees for retailers, wholesalers, distributors, manufacturers, and importers.

Filing Returns and Reports

Distributors

All licensed distributors are required to file tax returns, reports, and/or schedules, which are due on or before the 25th of the month following the reporting period. Tax returns, reports, and schedules must be filed even if no transactions were made during the reporting period. Online filing is available to cigarette distributors and manufacturers. Additional information may be found at Cigarette Tax Online Filing Page. All records must be kept and maintained at the taxpayer's licensed premises in California, unless another location has been approved by the BOE.

Cigarettes

Tobacco Products

Wholesalers

Under section 30188 of the Revenue and Taxation Code, every licensed cigarette wholesaler in this state is required to file a report (Cigarette Wholesaler's Report, BOE-501-CW) on or before the 25th day of the month following the monthly reporting period showing the cigarette inventory activity. Reports must be filed even if no transactions were made during the reporting period. Licensed tobacco products wholesalers must maintain records but do not have a reporting requirement. All records must be kept and maintained at the taxpayer's licensed premises in California, unless another location has been approved by the BOE.

Manufacturers & Importers

All licensed manufacturers and importers are required to file tax returns, reports, and/or schedules, which are due on or before the 25th of the month following the reporting period. Tax returns, reports, and schedules must be filed even if no transactions were made during the reporting period. Online filing is available to cigarette distributors and manufacturers. Additional information can be found at our Cigarette Tax Online Filing Program page. All records must be kept and maintained at the taxpayer's licensed premises in California, unless another location has been approved by the BOE.

Cigarettes

Tobacco Products

Retailer

A retailer is a person who sells cigarettes or tobacco products directly to the public from a California retail location. Retailers cannot purchase or be in possession of unstamped (untaxed) cigarettes or untaxed tobacco products unless they also have a distributor's license. You must hold a California Cigarette and Tobacco Products Distributor's License if you purchase out-of-state tobacco products (untaxed) from an unlicensed seller that did not charge you the tax.

Retail Location

A retail location means both of the following:

  • Any building from which cigarettes or tobacco products are sold at retail.
  • A vending machine.

Cigarette Wholesaler

A cigarette wholesaler is a person, other than a licensed distributor, who sells taxed (stamped) cigarettes, obtained from a licensed distributor or another licensed wholesaler, for resale. Cigarette wholesalers cannot purchase or be in possession of unstamped (untaxed) cigarettes.

Tobacco Products Wholesaler

A tobacco products wholesaler is a person, other than a licensed distributor, who sells tax-paid tobacco products for resale. Tobacco products wholesalers cannot purchase or be in possession of untaxed tobacco products.

Responsibilities for Retailers and Wholesalers

As a retailer or wholesaler of cigarettes and tobacco products, you must:

  • Obtain a Seller's Permit.
  • Maintain a valid California Cigarette and Tobacco Products Retailer's or Wholesaler's License.
  • Conspicuously display your license at each retail location in a manner visible to the public (retailers only).
  • Keep complete and legible purchase invoices (and sales invoices if you are a wholesaler) for cigarettes and tobacco products for four (4) years.*
  • Keep purchase invoices (and sales invoices if you are a wholesaler) at each licensed location for at least one year after the date of the purchase or sale.*
  • Allow BOE staff or law enforcement officers to review your purchase invoices (and sales invoices if you are a wholesaler) upon request.*
  • Purchase and sell only those cigarettes and roll-your-own (RYO) tobacco authorized for sale in California as listed on the Office of the Attorney General's California Tobacco Directory.
  • Purchase cigarettes and tobacco products only from California licensed distributors or wholesalers. Retailers may not purchase cigarettes or tobacco products from other retailers. Wholesalers may not purchase their products directly from an importer or manufacturer.*
  • Only purchase cigarettes affixed with valid California tax stamps and California tobacco products tax-paid products.*
  • File a monthly report and/or schedule (wholesalers only).*

* Does not apply to tobacco products that are not subject to the tobacco products tax. 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.

For information on the sales invoice requirements for wholesalers, see the "Sales Invoice Requirements for Distributors and Wholesalers" topic in the Industry Topics section.

Purchase Invoice Requirements for Both Retailers and Wholesalers

The cigarette and tobacco products purchase invoices you receive from distributors and/or wholesalers must be legible and include the following information:

  • 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).
  • Your name, address, and cigarette and tobacco products retailer's or wholesaler's license number.
  • An itemized list of the cigarettes or tobacco products purchased. Cigarettes must be listed by the brand and style names, flavor, filter, and/or packaging when applicable, number of cartons or packs sold, and the sales price. Tobacco products must be listed by brand, type (such as pipe, cigars, or roll-your-own), flavor, packaging (such as pouches, tins, or boxes), quantity sold, and sales price.
  • The date you purchased the cigarettes or tobacco products.
  • The amount of California cigarette and tobacco products taxes due to the BOE by the distributor on the sale of cigarettes and tobacco products listed on the invoice. Note: a licensed distributor who is also a licensed retailer or manufacturer may include this statement instead of providing the amount of cigarette and tobacco products taxes due to the BOE: "All California cigarette and tobacco products taxes are included in the total amount of this invoice."

These requirements do not apply to tobacco products that are not subject to the tobacco products tax. 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.

Product Transfers – Retailers with Multiple Locations

Generally, the transfer of cigarettes and tobacco products is not permitted. However, if a retailer owns more than one store and the retail licenses are held by the same legal entity, those retailers may be allowed to transfer cigarettes and tobacco products between stores belonging to the same legal entity. Sales transactions between retailers are prohibited.

Prepare transfer logs at the time of transfer. Transfer logs created or provided after an inspection are not acceptable. Legible transfer logs and copies of purchase invoices must be kept at each location involved in the transfer. The logs must include:

  • The transferring retail address and license number where the original purchase was made.
  • The receiving retail address and license number where the product was transferred.
  • The supplier's name, license number, purchase invoice number, and date of original purchase.
  • A detailed description and quantity of product transferred (for example, quantity, brand, type of package, flavor, style, etc.).

These requirements do not apply to tobacco products that are not subject to the tobacco products tax. For example, vape liquids that do not contain any nicotine are not subject to these requirements; however, they are subject to retail licensing.

Sample Log
Store Transferring Product Store Receiving Product Date of Transfer Items Transferred Original Purchase From
A Street Market
123 A Street
Anywhere, CA
LRQ 91-000000
B Street Market
123 B Street
Anywhere, CA
LRQ 91-111111
March 2, 2010
  • 50 packs Marlboro cigarettes, 100s
  • 5 boxes Romeo y Juliet Cigars (25 ea)
LD Tobacco Distributors
LDQ 90-222222
February 14, 2010
Invoice# 12345
A Street Market
123 A Street
Anywhere, CA
LRQ 91-000000
B Street Market
123 B Street
Anywhere, CA
LRQ 91-111111
January 31, 2011
  • 7 rolls Grizzly Long Cut, Mint (5 ea)
  • 2 packs Black & Mild cigars, wine flavor (5 ea)
S&W Wholesale
LWQ 90-333333
December 27, 2010
Invoice# 54321

Enforcement and Penalties

BOE staff has authority to inspect any location where cigarettes or tobacco products are sold, produced, or stored and any site where there is evidence of tax evasion related to cigarette or tobacco products or non-compliance with the Master Settlement Agreement (MSA) (Revenue and Taxation Code section 30435). Upon entering your business, our inspectors will present their official identification and credentials to you or your employees. Any person who refuses to allow an inspection is guilty of a misdemeanor and is subject to a fine.

BOE staff and law enforcement officers may inspect your location and seize any untaxed cigarettes and/or tobacco products, including cigarettes without tax stamps, with stamps from other states, or with counterfeit tax stamps. Any retailer or wholesaler in possession of untaxed cigarettes and/or tobacco products is subject to fines and penalties, such as suspension of its license.

To help prevent cigarette tax evasion, the BOE 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). 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. For purposes of this law, "unaffixed stamps" means tax-paid cigarette tax stamps purchased by a licensed distributor and previously affixed to cigarette packs. For more information about our inspections and your rights, see Publication 152, Cigarette and Tobacco Products Inspections.

You may be subject to civil and criminal penalties and the seizure and/or forfeiture of any noncompliant product if you:

For additional information on the inspection and citation process, visit the Investigations Division page or contact them by phone at 1-916-324-0105.

Retailers

As a retailer, it is illegal for you to purchase from a distributor, wholesaler, or any other person who is not licensed pursuant to the Cigarette and Tobacco Products Licensing Act of 2003, or whose license has been suspended or revoked. It is also illegal to purchase cigarettes or tobacco products from another retailer. To verify that you are purchasing from a licensed distributor or wholesaler, see our list (updated periodically) of licensed California cigarette and tobacco products distributors Excel document Excel PDF document PDF and wholesalers Excel document Excel PDF document PDF. If a retailer purchases tobacco products from an unlicensed seller located out of state, the retailer then becomes responsible for the California tobacco products tax due on the wholesale cost of the tobacco and must register with the BOE as a distributor (see information above regarding the need to have multiple licenses and accounts). In addition, it is illegal for you to sell or be in possession of cigarettes (including roll-your-own tobacco) which are not in compliance with the MSA pursuant to R&T Code section 30165.1. To see a list of MSA compliant manufacturers and brands check the California Tobacco Directory.

If you make an illegal purchase, your cigarettes and/or tobacco products may be seized, your license may be suspended or revoked, and you may be subject to fines and/or imprisonment. As a retailer, you are responsible for verifying your suppliers have a valid cigarette and tobacco products license with the BOE.

Wholesalers

As a wholesaler, it is illegal for you to purchase cigarettes or tobacco products from a distributor or any other person who is not licensed pursuant to the Cigarette and Tobacco Products Licensing Act of 2003, or whose license has been suspended or revoked. Also, you may not sell cigarettes or tobacco products to a distributor, wholesaler, retailer, or any other person who is not licensed with the BOE, or whose license has been suspended or revoked. In addition, it is illegal for you to sell or be in possession of cigarettes (including roll-your-own tobacco) which is not in compliance with the MSA pursuant to R&T Code section 30165.1. To see a list of MSA compliant manufacturers and brands, check the California Tobacco Directory. To help you determine if a Cigarette and Tobacco Products Retailer's License is currently valid, use our verification page. To see a list of licensed California cigarette and tobacco products distributors or wholesalers, select Distributor: Excel document Excel PDF document PDF or Wholesaler: Excel document Excel PDF document PDF. As a wholesaler, you are responsible for verifying purchasers have a valid cigarette and tobacco products license with the BOE.

Tobacco Classes/Seminars for Retailers

The BOE offers free instructor-led classes at its offices located statewide to help you better understand the state's requirements and your responsibilities as a retailer of cigarettes and tobacco products in California. This information is also available as an online seminar, and allows you to submit questions electronically to the BOE for a timely response.

Online Seminar for Wholesalers

The BOE offers an online Tobacco Seminar to help you better understand the state's requirements and your responsibilities as a wholesaler of cigarettes and tobacco products in California.

The information is presented by chapter so you can view the information at your own pace. We highly recommend you view all the topics provided to help you understand and comply with California's cigarette and tobacco laws. The seminar page also allows you to electronically submit your cigarette or tobacco products questions directly to the BOE for a timely response.

Frequently Asked Questions (FAQs)

The cigarette and tobacco products tax is paid by a distributor upon the first distribution of cigarettes and tobacco products in California. A distribution includes the first sale, use or consumption of untaxed cigarettes or untaxed tobacco products in California, and the placing of untaxed cigarettes or untaxed tobacco products into a vending machine or retail stock in California (Revenue and Taxation Code § 30008).

Cigarette Distributor

A cigarette distributor is a person or company that purchases untaxed (unstamped) cigarettes and makes the first distribution of cigarettes in this state. In general, distributors purchase cigarettes before any California cigarette tax is due, and then sell stamped cigarettes to wholesalers, other distributors and retailers. Distributors pay the taxes by purchasing cigarette tax stamps from the Board of Equalization (BOE). 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. Distributors receive a purchase discount of 0.85% of the total tax value per purchase order, which is capped at the first one dollar ($1.00) in denominated value beginning April 1, 2017, to help offset the cost of affixing cigarette tax stamps. Once the cigarette packs are stamped, distributors can sell the stamped cigarettes to wholesalers, retailers, and other distributors. Anyone who distributes cigarettes in California must register with the BOE as a cigarette distributor and sell only to distributors, wholesalers or retailers with a valid BOE cigarette and tobacco products license.

Tobacco Products Distributor

A tobacco products distributor is a person or company that makes the first distribution of tobacco products in this state. In general, distributors purchase tobacco products before any California tobacco products tax is due and then pay the tax when the tobacco products are sold or distributed. A tobacco products distributor is required to calculate the tobacco products tax due based on the wholesale cost of the tobacco products distributed and remit the amounts owed each month on tax return forms provided by the BOE. Anyone who distributes tobacco products in California must register with the BOE as a tobacco products distributor and sell only to distributors, wholesalers or retailers with a valid BOE cigarette and tobacco products license.

Responsibilities

Distributors of cigarettes or tobacco products must:

  • Obtain a Seller's Permit.
  • Obtain and maintain a valid California Cigarette and Tobacco Products Distributor's License and account.
  • Maintain complete and legible cigarette and tobacco products purchase and sales records for four (4) years.*
  • Keep purchase and sales records at each licensed location for a least one year after the date of purchase or sale.*
  • Allow BOE staff or law enforcement officers to review your sales and purchase records upon request.*
  • Purchase and sell only cigarettes and roll-your-own (RYO) tobacco authorized for sale in California as listed on the Office of the Attorney General's California Tobacco Directory.
  • Make sure that sales invoices meet all legal requirements. Each sales invoice must be legible and include the following information*:
    • Your name, address, telephone number, and your distributor's license number.
    • The name, address, and license number of the business purchasing the cigarettes or tobacco products. You may not legally sell cigarettes or tobacco products to an unlicensed buyer or purchase them from an unlicensed seller.
    • The date you sold the cigarettes or tobacco products.
    • An itemized list of the cigarettes or tobacco products sold. Cigarettes must be listed by the brand and style names, flavor, filter, and/or packaging when applicable, number of cartons or packs sold, and the sales price. Tobacco products must be listed by brand, type (such as pipe, cigars, or roll-your-own), flavor, packaging (such as pouches, tins, or boxes), quantity sold, and sales price.
    • The amount of California cigarette and tobacco products taxes due to the BOE by the distributor on the sale of cigarettes and tobacco products. However, a distributor that is also a retailer or manufacturer must include either one of the following on each invoice for the sale of cigarettes or tobacco products:
      • A statement that reads: "All California cigarette and tobacco products taxes are included in the total amount of this invoice."
      • The amount of cigarette and tobacco products taxes due to the BOE by the distributor on the distribution of cigarettes and tobacco products.
      • A statement that identifies any cigarettes or tobacco products sold without tax under Revenue and Taxation Code section 30105 (only if you are a distributor that is an original importer of the tobacco products you are selling).
  • File tax returns, reports, and/or schedules. See Returns and Reports in the Getting Started section for more information.

*These requirements do not apply to tobacco products that are not subject to the tobacco products tax. For example, vape liquids that do not contain any nicotine are not subject to these requirements; however, they are subject to retail licensing.

Prevent All Cigarettes Trafficking (PACT) Act Requirements

The Prevent All Cigarettes Trafficking (PACT) Act is a federal law that amends the Federal Jenkins Act. 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.

If you sell, transfer, ship, advertise, or offer for sale cigarettes or smokeless tobacco products through interstate commerce into California or commerce transferred into or through Indian country of an Indian tribe, located within the external borders of California, you must register with the BOE and file monthly reports.

For more detailed information on the PACT Act see the Industry Topics section of this guide.

PACT Act Registration Requirements

  • Download the Federal PACT Act form, ATF Form 5070.1, Prevent All Cigarettes Trafficking (PACT) Act Registration Form.
  • Mail the completed form to:
    California State Board of Equalization
    Business Tax and Fee Department, MIC: 88
    P.O. Box 942879
    Sacramento, CA 94279-0088

PACT Act Filing Requirements

You must file a monthly report with the accompanying schedules with the BOE and the California Attorney General. The monthly PACT Act report should contain detailed information on each shipment of cigarettes or smokeless tobacco products made during the previous calendar month into California or Indian country. The report is due on or before the 10th day of each calendar month. To download a copy of the required report forms, please visit the Federation of Tax Administrators website.

Separate monthly reports are required to be filed for cigarettes and smokeless tobacco products.

  • To report cigarettes, use form PA-1 State Cigarette P.A.C.T Act Report, (see page 2).
  • To report smokeless tobacco products, use form PA-2 State Tobacco P.A.C.T Act Report, (see page 4).

You may submit the required reports either:

  • Electronically to our PACT Act report mailbox, or
  • Mail to
    State Board of Equalization
    Business Tax and Fee Department, MIC: 88
    P.O. Box 942879
    Sacramento, California 94279-0088

Cigarette Tax Stamps

Cigarettes are subject to the cigarette tax and the cigarette and tobacco products surtaxes. Cigarette distributors pay the tax and surtaxes (taxes) to the State of California by purchasing cigarette tax stamps. Distributors must affix a stamp to each package of cigarettes prior to distribution to indicate that taxes have been paid. Distributors receive a purchase discount of 0.85 percent, which is capped at the first one dollar ($1.00) in denominated value beginning April 1, 2017, to help offset the costs of applying the stamps. Distributors may include the cost of the stamps in the amounts they charge their customers.

To purchase cigarette tax stamps, you must have a cigarette distributor account. For information on how to become a licensed cigarette distributor, please refer to Publication 63, Cigarette Distributor Licensing and Tax Stamp Guide.

Information About

Tax Stamp Forms and Publications

Questions on Tax Stamps? Contact Us

  • By Email
  • By Phone
    1-800-400-7115 toll-free
    1-916-341-6923 Stamp Desk
    1-916-327-6235 Stamp Desk Fax
  • By Mail
    State Board of Equalization
    Alternative Cigarette Tax Stamp Program, MIC:41
    P.O. Box 942879
    Sacramento, CA 94279-7077

Enforcement and Penalties

BOE staff has authority to inspect any location where cigarettes or tobacco products are sold, produced, or stored, or any site where there is evidence of tax evasion related to cigarette or tobacco products or non-compliance with the Master Settlement Agreement (MSA) (Revenue and Taxation Code section 30435). The MSA is a legal contract between 46 states, including California, and five U.S. Territories, with participating tobacco manufacturers. It was entered into in 1998. The MSA restricts cigarette advertising and marketing by participating tobacco manufacturers in various ways, including a ban on cartoons in tobacco advertisements, youth exposure to sampling, certain sponsorships, and most outdoor advertisements.

Upon entering your business, our inspectors will present their official identification and credentials to you and/or your employees. Any person who refuses to allow an inspection is guilty of a misdemeanor and is subject to a fine. Consequently, BOE staff and law enforcement officers may inspect your location and seize untaxed cigarettes with counterfeit tax stamps, non-MSA compliant stamped cigarettes (including roll-your-own tobacco) when the allowed 40-day sell-off period (period to sell off products which are no longer compliant with the MSA) has expired, and/or tobacco products upon which tax is due but has not yet been paid to the BOE.

To help prevent cigarette tax evasion, BOE has the authority (Assembly Bill (AB) 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). 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. For purposes of this law, "unaffixed stamps" means cigarette tax stamps for which the taxes has previously been paid by a licensed cigarette and tobacco products distributor and were previously affixed to cigarette packs. "Unaffixed stamps" do not include any unused and unapplied rolls of stamps or loose stamps acquired from the BOE or its authorized agent and in the possession of a licensed distributor. For more information about our inspections and your rights, see Publication 152, Cigarette and Tobacco Products Inspections.

As a distributor, it is illegal for you to sell or be in possession of cigarettes (including roll-your-own tobacco) which are not in compliance with the MSA pursuant to Revenue & Taxation Code section 30165.1, unless the product is solely for out-of-state sales. To see a list of compliant manufacturers and brands, select California Tobacco Directory. You may not sell cigarettes or tobacco products to a California distributor, wholesaler, retailer, or any other person in California who is not licensed with the BOE pursuant to the Cigarette and Tobacco Products Licensing Act of 2003, or whose license has been suspended or revoked. To help you determine if a cigarette and tobacco products retailer's license is currently valid, use our verification page. To see a list of licensed California cigarette and tobacco products distributors or wholesalers, select Distributor: Excel document Excel PDF document PDF or Wholesaler: Excel document Excel or PDF document PDF. As a distributor, you are responsible for verifying purchasers have a valid Cigarette and Tobacco Products license with the BOE.

You may be subject to civil and criminal penalties and the seizure or forfeiture of any noncompliant product if you:

For additional information on the inspection and citation process, visit the Investigations Division webpage or contact them by phone at 1-916-324-0105.

Online Seminar for Distributors

The BOE offers an online Tobacco Seminar to help you better understand the state's requirements and your responsibilities as a distributor of cigarettes and tobacco products in California.

The information is presented by chapter so you can view the information at your own pace. We highly recommend you view all the topics provided to help you understand and comply with California's cigarette and tobacco laws. The seminar page also allows you to electronically submit your cigarette or tobacco products questions directly to the BOE for a timely response.

Frequently Asked Questions (FAQs)

Manufacturer

A manufacturer is a person who manufactures cigarettes and/or tobacco products sold in this state. 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.

Importer

An importer is any purchaser who purchases for resale in the United States cigarettes and/or tobacco products manufactured outside the United States for the purpose of making a first sale or distribution within the United States (Section 30019 of the Revenue and Taxation Code).

Responsibilities

As a manufacturer or importer of cigarettes and tobacco products, you must:

  • Obtain a Seller's Permit.
  • Maintain a valid Cigarette and/or Tobacco Products Manufacturer/Importer's License and account.
  • Submit to the BOE a list of all brand families that you manufacture or import.
  • Update the list of brand families that you manufacture or import whenever you manufacture or import a new brand or additional brand, or stop manufacturing or importing a listed brand.
  • Consent to the jurisdiction of the California courts for the purpose of enforcing the Cigarette and Tobacco Products Licensing Act of 2003, appoint a registered agent for service of process in this state, and identify that agent to the Board of Equalization.
  • Certify when the license is granted and each year upon license renewal that all packages of cigarettes the licensee manufactures or imports and distributes in this state fully comply with subdivision (b) of Section 30163 of the Revenue and Taxation Code, and that the cigarettes contained in those packages are the subject of filed reports that fully comply with all requirements of the federal Cigarette Labeling and Advertising Act (15 U.S.C. Sec. 1331 et seq.) for the reporting of ingredients added to cigarettes.
  • A cigarette manufacturer or importer must waive any sovereign immunity defense or post a surety bond as provided in section 22979(a)(4) of the Business and Professions Code.
  • A manufacturer or importer that is a "tobacco product manufacturer" as defined in Health and Safety Code section 104556, subdivision (i) must certify to the BOE that it is a "participating manufacturer" as defined in subsection II(jj) of the "Master Settlement Agreement" (MSA), or is in full compliance with paragraph (2) of subdivision (a) of Section 104557 of the Health and Safety Code.
  • In accordance with section 22979.2(c) of the Business and Professions Code, all California cigarette manufacturers and importers are required to comply with a one-time license administration fee. The fee amount charged shall equal your respective market share of cigarettes manufactured or imported and sold in this state during the next calendar year as estimated by the Board of Equalization.

Frequently Asked Questions

If you purchase cigarettes or tobacco products for your own use from outside the state without paying California cigarette and tobacco products taxes and use tax, you are required to report and pay the cigarette and tobacco products taxes and use taxes directly to the BOE. This includes products purchased through the mail, by telephone, or via the Internet that are shipped into California.

You will not owe the cigarette taxes if you personally bring less than 400 cigarettes (two cartons) into California, but you will still owe the use tax.

For information regarding California use tax, please visit our guide for Use Tax.

The BOE administers the Cigarette and Tobacco Products Internet Program to collect the California state cigarette and tobacco products taxes and use tax from California consumers or users purchasing untaxed cigarettes and/or tobacco products from out-of-state Internet retailers and/or by mail or telephone for self-consumption in California. Consumers or users will be liable for the payment of tax to the BOE unless invoices are obtained showing payment of the California cigarette and tobacco products taxes and use tax.

Tax Rates

Visit the tax rate: page to view current and historical cigarette and tobacco products tax rates. You can view California city and county sales and use tax rates on our website.

Online Registration

Register online to pay taxes on purchases of cigarettes and/or tobacco products. Online registration is the convenient way to register and is available 24 hours a day.

Returns and Reports

Wholesale Cost of Tobacco Products

"Wholesale cost" means the cost of tobacco products to the distributor prior to any discounts or trade allowances. The BOE adopted Regulation 4076, Wholesale Cost of Tobacco Products, to provide additional guidance. This new regulation:

  • Defines
    • Arm's-length transactions
    • Discounts or trade allowances
    • Finished tobacco products
  • Clarifies the wholesale cost of tobacco products
  • Provides alternative methods of estimating or calculating the wholesale cost
  • Offers examples of estimating or calculating the wholesale cost

This regulation also establishes a rebuttable presumption that sales between related parties are not arm's-length transactions. Distributors can rebut this presumption by showing that the price, terms, and conditions of the transaction were substantially equivalent to those that would have been negotiated between unrelated parties.

Subdivision (c) of Regulation 4076 provides alternative methods of estimating or calculating the wholesale cost of tobacco products. To estimate or calculate a wholesale cost, the following resources or methods may be used.

  • A publicly or commercially available price list that the distributor used to determine the prices of tobacco products sold to customers in arm's-length transactions during the time period at issue, less an estimate based on the best available information of the distributor's or a similarly situated distributor's profit.
  • If a publicly or commercially available price list is not available, industry data from the time period to be estimated or calculated that provides reasonable evidence of typical tobacco products costs during such time period.

Examples of determining the wholesale cost of tobacco:

Example 1: Distributor B produces handmade cigars. B's tobacco products costs include: all manufacturing costs, the cost of raw materials (including waste materials not incorporated into the final product), the cost of labor, any direct and indirect overhead costs, and any federal excise and/or U.S. Customs taxes paid. The cost does not include freight or transportation charges for shipment from the supplier to the distributor.

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. Due to this corporate relationship between seller and buyer, the BOE presumes that the sale and purchase were not at arm's-length, and the presumption is not rebutted by C. 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.

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. However, D acquired such tobacco products at a 100 percent discount or trade allowance. 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.

Example 4: Distributor E, with a tobacco products importer's license, acquires tobacco products or finished tobacco products from a supplier outside the United States. E's tobacco products costs include, in addition to all other production or acquisition costs, the costs of all U.S. Customs fees and federal excise taxes paid or incurred by E with respect to such tobacco products.

Example 5: Distributor F receives three tobacco products packaged as one unit, as a "three for the price of two" promotional package, labeled with a single UPC barcode. As the products are packaged together as one inseparable unit, tax is based on the total package price.

Example 6: Distributor G receives 2 units, to sell as a "buy one, get one free" promotion. Each unit is separately packaged and each unit is labeled with a UPC barcode. Because one unit is being provided for free, tax would apply to the wholesale cost of each separate unit as calculated by a method discussed in subdivision (c) of Regulation 4076.

Example 7: Distributor H receives a three percent discount for paying their supplier within 10 days of receipt of their items. To calculate the wholesale cost, Distributor H must add the three percent discount to the price paid for the products.

Master Settlement Agreement Compliance

Publication 407, Master Settlement Agreement

Section 30165.1 of the Revenue and Taxation Code requires the Attorney General to compile and publish a directory of cigarette and tobacco manufacturers and brand families. Distributors may not sell, offer, possess for sale, or import for personal consumption any cigarettes or "roll-your-own" 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). In addition, it is illegal for a distributor to affix or cause to be affixed any tax stamp or meter impression to a pack of cigarettes or pay the tax on roll-your-own tobacco unless the tobacco products manufacturer and brand family are listed in the directory. Cigarettes or roll-you-own tobacco not listed on that directory are subject to seizure by the BOE and law enforcement agencies. The Attorney General posts the California Tobacco Directory online at on their California Tobacco Directory page. You can also subscribe to receive Tobacco Directory Notices by providing your email address on the Attorney General's California Tobacco Directory webpage or by sending an email to their directory subscription mailbox. You will receive an email acknowledging that the Attorney General has received and recorded your email address.

The Attorney General must provide distributors and wholesalers with written notice of any changes to the directory after it is first published. To receive written notifications, cigarette and tobacco products distributors and wholesalers must provide an email address to the Attorney General and update it as needed.

Distributors and wholesalers that violate these provisions may be subject to civil and criminal penalties and the seizure or forfeiture of any noncompliant product. In addition, we may revoke or suspend your license. For additional information on the citation process under this Act, visit the Investigations Division webpage or contact them by phone at 1-916-324-0105.

Prevent All Cigarettes Trafficking (PACT) Act Requirements for California Licensed Cigarette and Tobacco Products Distributors

The federal Prevent All Cigarette Trafficking (PACT) Act became effective on June 30, 2010. The PACT Act amends the Federal Jenkins Act (15 U.S.C. §§ 375-378). These amendments require all persons who sell, transfer, or ship for-profit cigarettes or smokeless tobacco products in interstate commerce to register and file monthly reports with the tobacco tax administrator of the state into which shipment is made no later than the 10th day of each month.

Interstate commerce is defined as commerce between:

  • A state and any place outside the state, or
  • A state and any Indian Country in that state, or
  • Points in the same state but through any place outside the state or through any Indian Country.

These provisions apply to California's tribal reservations, as well as to both in-state and out-of-state distributors shipping cigarettes and smokeless tobacco into California.

You are required to file PACT Act reports with the BOE if you are a licensed California cigarette and tobacco products distributor physically located outside of California and you ship taxed or untaxed cigarettes or smokeless tobacco products (for example, chew or snuff) into California, or you are physically located and licensed in California and make distributions to any Indian Country in California.

For additional information, see Special Notice L-298, PACT Act Requirements for California Licensed Cigarette and Tobacco Products Distributors.

Prevent All Cigarettes Trafficking (PACT) Act Requirements for Delivery Sellers (direct sales to consumers)

A "delivery sale" is defined, in part, to include sales of cigarettes or smokeless tobacco (for example, chew or snuff, dissolvable tobacco or snus) products sold by an out-of-state vendor to an in-state consumer. If you are a delivery seller and plan to make delivery sales of cigarettes or smokeless tobacco products in California, you must apply for both a California Cigarette and Tobacco Products Retailer's license and a California Cigarette and Tobacco Products Distributor's license. A delivery seller must comply with all California laws regarding the sale of cigarettes and smokeless tobacco products into the state as if that seller were located in California.

Note: You must obtain a distributor's license before you purchase untaxed cigarettes or tobacco products from an out-of-state seller who does not have a license issued under the Cigarette and Tobacco Products Licensing Act of 2003. A wholesaler's license is also required if you purchase tax-paid cigarettes or tobacco products for resale to retailers and other wholesalers. See the Distributors and Wholesalers sections for license fees and requirements.

Inspections

Why are we inspecting your business?

We are conducting a routine inspection of your business to see if you are following the state laws that control the sale of cigarettes and tobacco products in California. These inspections are authorized by state laws known as the California Cigarette and Tobacco Products Licensing Act of 2003 (Division 8.6 of the California Business and Professions Code), Cigarette and Tobacco Products Tax Law (Part 13, Division 2 of the Revenue and Taxation Code), and the California Cigarette Fire Safety and Firefighter Protection Act (Division 12 of the California Health and Safety Code). For more information on the inspection process, please see Publication 152, Cigarette and Tobacco Products Inspections.

What are we looking for?

We will check to see if:

  • You have a valid Cigarette and Tobacco Products license and any other business permits or licenses that may be required.
  • You conspicuously display your licenses at each location in a manner visible to the public (retailers only).
  • You keep purchase and/or sales invoices at each licensed location for at least one year after the date of purchase.
  • You bought your cigarettes and tobacco products from a BOE-licensed cigarette and/or tobacco products distributor, wholesaler, manufacturer, or importer (sales between retailers are prohibited) and have supporting purchase invoices for your inventory.
  • The cigarettes in your inventory:
    • Have valid California tax stamps attached,
    • Do not include flavored cigarettes (excluding menthols),
    • Are listed on the California Tobacco Directory as legal to sell in California (roll-your-own tobacco must also be listed on the directory), and
    • Comply with the "low ignition propensity" fire safety requirements of California.
  • The California tobacco products tax was paid on your other tobacco products.

Sales Invoice Requirements for Distributors and Wholesalers

Every invoice for the sale of cigarettes or tobacco products must be legible and include the following information:

  • The name, address, telephone number, and license number of the distributor or wholesaler.
  • The amount of California cigarette and tobacco products taxes due to the BOE by the distributor on the sale of cigarettes or tobacco products listed on the invoice.
    • Note: A licensed distributor who is also a licensed retailer or manufacturer may include this statement instead of providing the amount of cigarette and tobacco products taxes due to the BOE: "All California cigarette and tobacco products taxes are included in the total amount of this invoice."
  • An itemized listing of the cigarettes or tobacco products sold. Cigarettes must be listed by the brand and style names, flavor, filter, and/or packaging when applicable, number of cartons or packs sold, and the sales price. Tobacco products must be listed by brand, type (such as pipe, cigars, or roll-your-own), flavor, packaging (such as pouches, tins, or boxes), quantity sold, and sales price.
  • The name, address, and cigarette and tobacco products license number of the retailer, distributor, or wholesaler to whom cigarettes or tobacco products are sold.
  • The date the cigarettes or tobacco products are sold.

Distributors and wholesalers are responsible for keeping sale and purchase invoices, and retailers must keep purchase invoices, at each location for at least one year after the date of sale or purchase and for the past four years on or offsite.

Tax Evasion and Licensing Act Violations

What Is Cigarette and Tobacco Products Tax Evasion?

Any person who evades the reporting, assessment, or payment of cigarette or tobacco products taxes that would otherwise be due is guilty of cigarette or tobacco products tax evasion. Evasion of tax liabilities over $25,000 in a 12-month period is a felony.

Examples of Cigarette or Tobacco Products Tax Evasion:

  • Sale of untaxed cigarettes, including cigarettes without tax stamps, with stamps from other states, or with counterfeit tax stamps.
  • Possession, sale or offer to sell, buy or offer to buy, any false, fraudulent, or unaffixed (reused) cigarette tax stamps.
  • Sale of untaxed tobacco products.
  • Intentionally importing tobacco products from outside the state without remitting the appropriate California tobacco products taxes.
  • Possessing, owning, storing, or selling untaxed cigarettes or tobacco products (unless licensed as a distributor, manufacturer, or importer).

Why Is Cigarette or Tobacco Products Tax Evasion Harmful?

  • Tax evasion hurts all of us by reducing the amount of revenue available for essential state and local services. Nearly 90% of the taxes collected on cigarettes and tobacco products are earmarked to fund important programs such as breast cancer research, health education, hospital and physician services, research, public resources, and county-run projects for child health and development.
  • Cigarette and tobacco products tax evasion hurts the honest business owner. Unscrupulous sellers of untaxed cigarettes and tobacco products get an unfair market advantage when they undercut tax-included prices charged by the legitimate businessperson.
  • Cigarette and tobacco products tax evasion is accompanied by an increase in thefts, hijackings, cross-border smuggling, and other organized crimes.

Report Cigarette and Tobacco Tax Evasion

Public awareness and involvement are essential in eliminating cigarette and tobacco tax evasion. To report suspected tax evasion, contact the Investigations Division at 1-916-324-0105 or the Tax Evasion Hotline at 1-888-334-3300. You may also submit a complaint online, by FAX at 1-916-324-1578, or mail to State Board of Equalization, Investigations Division, PO Box 942879 MIC: 42, Sacramento, CA 94279-0042.

Violations of the Cigarette and Tobacco Products Licensing Act of 2003

Any retailer, wholesaler, or distributor of cigarettes and tobacco products and any manufacturer or importer of cigarettes that does not comply with the licensing requirements of the Cigarette and Tobacco Products Licensing Act of 2003 may receive fines up to $5,000 for each offense, imprisonment up to one year in county jail, or both fines and imprisonment.

Examples of violations of the Cigarette and Tobacco Products Licensing Act of 2003:

  • Sale or distribution of cigarettes or tobacco products without a license.
  • Not obtaining and maintaining a valid license for each location selling cigarettes or tobacco products.
  • Refusal to allow inspection.
  • Not displaying your license in public view.
  • Not maintaining the required purchase and/or sales records.
  • Refusing access to purchase and/or sales records to authorized inspectors or enforcement staff.
  • Selling cigarettes or tobacco products to individuals under 21 years of age (STAKE Act).
  • Selling cigarettes or roll-your-own tobacco products in California that are not listed on the Office of the Attorney General's California Tobacco Directory.

"Buy One, Get One Free"

When multiple cans of chewing tobacco 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? See examples below:

Example 1: Distributor A receives three tobacco products packaged as one unit, as a "three for the price of two" promotional package, labeled with a single UPC barcode. As the products are packaged together as one inseparable unit, tax is based on the total package price.

Example 2: Distributor B receives 2 units, to sell as a "buy one, get one free" promotion. Each unit is separately packaged and each unit is labeled with a UPC barcode. Because one unit is being provided for free, tax would apply to the wholesale cost of each separate unit.

However, the measure of tax is different for a "Buy 1 Get 1 Free" unit of cigarettes. With cigarettes, the two packages cannot be viewed as one unit for tax purposes because the cigarette tax is based on each cigarette (stick) distributed, not wholesale cost, and both packages require a tax stamp. In short, cigarettes are taxed per cigarette distributed (per stick) and tobacco products are taxed based on the wholesale cost to the distributor.

Nontaxable Transactions

The following sales and distributions of cigarettes and tobacco products are generally not subject to the taxes although these transactions may be subject to reporting requirements. This list is not intended to be all-inclusive.

  • Sales of cigarettes or tobacco products by the original importer to a licensed distributor if the cigarettes or tobacco products are manufactured outside the United States (Revenue and Taxation Code (R&TC) Section 30105);
  • Sale or gift of federally tax-free cigarettes or tobacco products when the cigarettes or tobacco products are delivered directly from the manufacturer under Internal Revenue bond to a veteran's home of the State of California or a hospital or domiciliary facility of the United States Veterans' Administration for gratuitous issue to veterans receiving hospitalization or domiciliary care. 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 (R&TC Section 30105.5);
  • Sales of cigarettes or tobacco products by the manufacturer to a licensed distributor (R&TC Section 30103);
  • Sales by a distributor to a common carrier engaged in interstate or foreign passenger service. (R&TC Section 30104);
  • Sales to United States military exchanges, commissaries, ships' stores, or the U.S. Department of Veterans Affairs (R&TC Section 30102);
  • Distributions of federally untaxed cigarettes or tobacco products that are under Internal Revenue bond or U.S. Customs control (R&TC Section 30102.5);
  • An individual shipment of not more than 400 cigarettes (typically 20 packs or 2 cartons) personally transported into California (R&TC Section 30106);
  • Sales and distributions of cigarettes and tobacco products that cannot be taxed by the state under the U.S. Constitution or federal law, or under the California Constitution or state law, such as shipments to purchasers in other states, territories, or foreign countries when the cigarette and tobacco products are not to be returned to California before use.

Common Carriers

California Cigarette and Tobacco Products Tax Regulation 4041, Common Carrier Delivery Reports, requires that every common carrier making deliveries of shipments of cigarettes originating outside California to a consignee in California must report to the BOE, by no later than the 25th day of the calendar month, following the calendar month in which the delivery of the cigarettes was made. The report must be made on the BOE's form BOE-1071, Common Carrier's Report of Cigarette Deliveries, and must include but is not limited to:

  • The name of the shipper and the point of origin;
  • The name of the consignee and the address to which the products were delivered;
  • The date and number of the waybill covering the shipment;
  • The number of cases, bales or other containers of cigarettes delivered and the quantity of cigarettes contained therein as shown by the shipping documents;
  • In the case of rail shipments, the car initials and number; and
  • In the case of water, the name of the vessel and the number of the steamship bill of lading.

Mobile Sellers

A "mobile location" does not meet the definition of a retail location. If you operate from a catering truck, lunch wagon, or other mobile facility, you do not qualify for 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. For more information on this topic, please see our Mobile Sellers of Cigarettes and Tobacco Products notice.

Sales Involving American Indians

Distributors

There are no special exemptions from the state's cigarette and tobacco products taxes for sales of cigarettes and tobacco products to Indians. A non-Indian cigarette or tobacco products distributor who sells cigarettes or tobacco products to an Indian must pay cigarette and tobacco products taxes and apply California cigarette tax stamps to the cigarette packages.

Indian retailers

An Indian retailer in California who buys untaxed tobacco products or cigarettes without a California tax stamp and sells them to non-Indians in Indian Country is required to collect the cigarette and tobacco products taxes from those purchasers and pay the tax to the BOE. If the Indian retailer does not collect and pay the taxes due, the non-Indian purchaser is ultimately liable for the taxes. Non-Indians who purchase cigarettes without California tax stamps or untaxed tobacco products from an Indian retailer, owe the cigarette and tobacco products taxes. The non-Indian purchaser must register with the BOE and pay applicable California cigarette and tobacco products taxes and use tax.

Cigarette-Making Machines

If a retailer operates a retail store that makes available a commercial cigarette-making machine for use by customers, federal law requires the retailer to obtain a permit as a "manufacturer of tobacco products" from the Alcohol and Tobacco Tax and Trade Bureau (TTB). Under the Cigarette and Tobacco Products Licensing Act of 2003, the retailer does not manufacture cigarettes if the retailer does not own the tobacco when it is manufactured into cigarettes. In this scenario, the retailer is not required to register with the BOE as a cigarette manufacturer.

It is against federal law to operate as a manufacturer of tobacco products without a TTB permit, and doing so without proper permits risks civil and/or criminal liability. TTB has instructed that retailers operating without a permit "must immediately cease operations until a TTB permit is obtained." TTB's enforcement efforts have included investigations of retail locations where the machines are made available to members of a "social club" or "non-profit." TTB has indicated that the non-profit status of the "person" making the machine available is not relevant in evaluating "commercial purposes" under Internal Revenue Code section 5702 and has found members of a "social club" or "non-profit" to be in violation of the law and has assessed taxes.

Flavored Cigarettes

Cigarettes and roll-your-own tobacco that contain certain characterizing flavors (excluding menthol) are considered adulterated and are banned from manufacture, import, or sale in the United States. See Flavored Cigarettes Banned in the United States, Publication 429, and Special Notice: Information Regarding Federal Ban on Flavored Cigarettes.

Nicotine Products, Vape Liquids, Electronic Cigarettes (eCigarettes), and Other Related Products

Retailer's License

As of June 9, 2016, state law expanded the definition of tobacco products for cigarette and tobacco products retail licensing purposes to include:

  • Any product containing, made of, or derived from nicotine that is intended for human consumption.
  • Any electronic smoking or vaping device that delivers nicotine or other vaporized liquids.
  • Any component, part, or accessory of a tobacco product, whether or not sold separately.

Effective January 1, 2017, any retailer that sells any of the products listed above, is required to obtain and maintain a Cigarette and Tobacco Products Retailer's License from the BOE in order to engage in the retail sale of these products. If you already have a valid Cigarette and Tobacco Products Retailer's License issued by the BOE, you may sell the products listed above under your existing Cigarette and Tobacco Products Retailer's License.

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 Cigarette and Tobacco Products Retailer's License. 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.

In addition to the Cigarette and Tobacco Products Retailer's License and seller's permit, you may also need one or more of the following licenses and accounts:

  • Cigarette and Tobacco Products Distributor's License
  • Cigarette and Tobacco Products Wholesaler's License (not needed for licensed distributors)
  • Tobacco Products Manufacturer/Importer's License
  • Tobacco Products Distributor's Account (for tax reporting purposes)
  • Tobacco Products Manufacturer/Importer's Account (for tax reporting purposes)

*Tobacco paraphernalia includes, but is not limited to, items that do not contain tobacco or nicotine such as cigarette papers or wrappers, pipes, and cigarette rolling machines.

Below is a chart to help determine if a retailer's license is required for retail sales of certain types of products.

Product Sold Is a Cigarette and Tobacco Products Retailer's License Required?
Nicotine and non-nicotine eJuice or eLiquid (vape liquids) Yes
Electronic device, component, part, or accessory sold without nicotine Yes
Electronic device, component, part, or accessory sold with nicotine Yes
Tobacco Paraphernalia (cigarette paper, pipes, cigarette rolling machines) No

Retailer, Wholesaler, Distributor, and Manufacturer/Importer's License/Account

Any retailer, wholesaler, distributor, manufacturer, or importer that sells any tobacco or nicotine products intended for human consumption, including, but not limited to, electronic cigarettes sold with nicotine (for a single price), or any component, part, or accessory of an electronic cigarette that is used during the operation of the device when sold in combination with nicotine (for a single price), is required to obtain and maintain a cigarette and tobacco products license/account from the BOE in order to engage in the sale of these products. Please note, sales transactions of cigarettes, tobacco or nicotine products, including electronic cigarettes sold with nicotine, between retailers are prohibited. This restriction does not apply to non-nicotine products such as eLiquids or eJuice that contain no nicotine.

See our chart below for a quick reference of the account(s)/license(s) required for sellers of nicotine products.

Examples of what type of account(s)/license(s) are required (in addition to a Seller's Permit):

Retailers

Example 1: Retailer A only sells eLiquid or eJuice products that do not contain nicotine or tobacco. Regardless if the eLiquid or eJuice products contain nicotine or tobacco or not, Retailer A is required to register with the BOE for a Cigarette and Tobacco Products Retailer's License.

If Retailer A purchases eLiquid or eJuice products that contain nicotine or tobacco, Retailer A is required to purchase these products tax-paid from a licensed wholesaler or distributor.

Example 2: Retailer B sells tax-paid vape liquids that contain nicotine and no other tobacco products such as cigars, chew, or snuff. Retailer B is required to register with the BOE for a Cigarette and Tobacco Products Retailer's License.

Example 3: Retailer C purchases vape liquids that contain nicotine from an unlicensed distributor located outside California. Retailer C is required to register with the BOE for a tobacco products distributor's account and a Cigarette and Tobacco Products Distributor's License.

Wholesalers

Example 4: Wholesaler A purchases untaxed vape liquids that contain nicotine from an unlicensed distributor. Wholesaler A is required to register with the BOE for a tobacco products distributor's account and a Cigarette and Tobacco Products Distributor's License (a wholesaler account/license is not required if you have a distributor's account/license).

In addition to these licenses, if Wholesaler A sells vape liquids that contain nicotine directly to consumers, Wholesaler A is also required to register with the BOE for a Cigarette and Tobacco Products Retailer's License.

Example 5: Wholesaler B purchases tax-paid nicotine products for resale. Wholesaler B is required to hold a Cigarette and Tobacco Products Wholesaler's License in order to purchase these products for resale. In addition to the license, if Wholesaler B sells these products directly to consumers, Wholesaler B is required to register with the BOE for a Cigarette and Tobacco Products Retailer's License.

Distributors

Example 6: Distributor A sells eLiquid or eJuice products that do not contain nicotine or tobacco. Distributor A is not required to register with the BOE for a tobacco products account or license since the eLiquid or eJuice products do not contain nicotine or tobacco. If Distributor A sells untaxed eLiquid or eJuice products that do contain nicotine or tobacco, Distributor A is required to register with the BOE for a tobacco products distributor's account and Cigarette and Tobacco Products Distributor's License. In addition to these licenses, if Distributor A sells these products directly to consumers, Distributor A is also required to register with the BOE for a Cigarette and Tobacco Products Retailer's License.

Manufacturers

Example 7: Company A manufactures vape liquids in California and sells them to stores located in California and online directly to customers located in California. Company A is required to register with the BOE for a tobacco products distributor's account, Cigarette and Tobacco Products Distributor's License, tobacco products manufacturer/importer's account, and a Tobacco Products Manufacturer/Importer's License. In addition to these licenses, Company A is required to obtain a Cigarette and Tobacco Products Retailer's License for selling vape liquids directly to consumers from a California retail location.

Example 8: Company B manufactures nicotine vape liquids outside of California and sells them to a store located in California. Company B can only sell to a licensed person in CA. Company B is required to hold a manufacturer's license from the BOE to engage in the sale of nicotine vape liquids (tobacco products). A California licensed distributor may not purchase tobacco products from an unlicensed manufacturer. The distributor located in California who purchases the nicotine vape liquids from Company B is required to report and pay the tobacco products tax due to the BOE upon distribution in California and hold a tobacco products distributor's account and license because the distributor is making distributions in California. A California licensed wholesaler may not purchase tobacco products directly from a California licensed manufacturer. (Business and Professions Code section 22980.1).

Purchases by Consumers

If a consumer purchases any nicotine products, vape liquids, or electronic cigarettes for their own use from outside of California without paying California tobacco products tax and sales or use tax, the consumer is required to register to pay California tobacco products taxes on the tobacco products purchased and file a Cigarette and Tobacco Products Excise Tax Return, BOE-501-CI and to pay use tax on the tobacco products purchased, and file a Cigarette and Tobacco Products Use Tax Return, BOE-501-UI.

1Out-of-state manufacturers, distributors, and wholesalers that are not engaged in business in California (Revenue and Taxation Code Section 30108(c)) may voluntarily register with the BOE for a Distributor's Account/License.
2 For California retail locations (Business and Professions Code Section 22971(q)).
Account(s)/License(s) Required by a: Sales to Untaxed 0mg nicotine/tobacco product Tax-paid nicotine/tobacco product Untaxed nicotine/tobacco product
Manufacturer1 Account(s)/License(s) Required
Distributor None N/A
  • Tobacco Manufacturer/ Importer's Account/License
Wholesaler None N/A
  • Tobacco Manufacturer/ Importer's
  • Distributor's Account/License
Retailer None N/A
  • Tobacco Manufacturer/ Importer's Account/License
  • Distributor's Account/License
Consumer None N/A
  • Tobacco Manufacturer/ Importer's Account/License
  • Distributor's Account/License
  • Retailer's License2
Distributor1 Account(s)/License(s) Required
Other Distributors None N/A
  • Distributor's Account/License
Wholesaler None N/A
  • Distributor's Account/License
Retailer None N/A
  • Distributor's Account/License
Consumer None N/A
  • Distributor's Account/License
  • Retailer's License2
Wholesaler1 Account(s)/License(s) Required
Other Wholesalers None
  • Wholesaler's License
  • Distributor's Account/License
Retailer None
  • Wholesaler's License
  • Distributor's Account/License
  • Wholesaler's License
Consumer None
  • Wholesaler's License
  • Retailer's License
  • Distributor's Account/License
  • Retailer's License2
Retailer Account(s)/License(s) Required
Other Retailers None Prohibited
  • Distributor's Account/License
Consumers
  • Retailer's License
  • Retailer's License
  • Distributor's Account/License
  • Retailer's License2
Purchases by Consumers Account(s)/License(s) Required
N/A N/A N/A
  • CI Account

Tobacco Products Tax

In November 2016, California voters approved Proposition 56, which amended the definition of "tobacco products*" under the California Cigarette and Tobacco Products Tax Law (Revenue and Taxation Code section 30121) for tax purposes. In addition to the traditional tobacco products (such as cigars, smoking, chewing, or pipe tobacco, or snuff) that are subject to the tobacco products tax, the distribution of the following tobacco products are subject to the tobacco products tax beginning April 1, 2017:

  • Little cigars (a cigarette tax stamp will no longer be required to be affixed to the package).
  • Any product containing, made of, or derived from tobacco that is intended for human consumption (previously tobacco products, other than cigars, smoking or chewing tobacco, or snuff, had to contain at least 50 percent tobacco to be subject to the tobacco products tax).
  • Any product containing, made of, or derived from nicotine that is intended for human consumption and sold with (for a single price) or without a nicotine delivery device.
  • Electronic cigarettes or any device or delivery system sold in combination with nicotine for a single price (examples of a device or delivery system include, but are not limited to, eCigars, ePipes, vape pens and eHookahs).
  • Any component, part, or accessory of an electronic cigarette that is used during the operation of the device when sold in combination with nicotine for a single price (for example, a battery used in the operation of the device sold in combination with nicotine).

The following products are not subject to the tobacco products tax; however, they are still subject to cigarette and tobacco products retail licensing requirements:

  • Vape liquids such as eLiquid or eJuice that do not contain nicotine or tobacco.
  • Any delivery device or system not sold in combination with any liquid or substance containing nicotine for a single price.
  • Any battery, battery charger, carrying case, or any other accessory not sold in combination with nicotine for a single price.

* Tobacco products do not include products approved by the U. S. Food and Drug Administration as tobacco cessation products or for other therapeutic purposes when those products are marketed and sold for such approved use; for example, nicotine patches.

Point of taxation

In California, a tobacco products distributor is the entity responsible for paying the tobacco products tax to the BOE. The tobacco products tax is paid by a distributor upon the first distribution of tobacco products in California. A distribution includes the first sale, use, or consumption of untaxed tobacco products in California (Revenue and Taxation Code section 30008). In general, distributors purchase tobacco products before any California tobacco products taxes are due and then pay the tobacco products taxes when it distributes the tobacco products. A tobacco products distributor is required to calculate and report the tobacco products tax due based on the wholesale cost (including federal excise tax) of the tobacco products distributed multiplied by the tobacco products tax rate, file tax returns provided by the BOE, and remit the amounts owed to the BOE. Anyone who distributes tobacco products in California must register with the BOE as a tobacco products distributor.

Tobacco products tax basis – wholesale cost

Effective April 1, 2017, products containing nicotine are subject to the tobacco products tax based on the wholesale cost, the same as all other conventional tobacco products.

The "wholesale cost" of nicotine products is calculated on the cost of the finished nicotine product which includes, exclusive of any discounts or trade allowances:

  • All manufacturing costs;
  • The cost of raw materials (including any adjuncts added to pure nicotine and any waste material not incorporated into the product);
  • The cost of labor;
  • Any direct or indirect overhead costs (including Freight-in); and
  • Any transportation costs associated with the shipment or transport of unfinished tobacco products (for example, pure nicotine).

For additional information, please refer to Regulation 4076, Wholesale Cost of Tobacco Products.

Calculation of wholesale cost on combination packages

The wholesale cost of nicotine products is calculated upon the cost of the finished nicotine products as described above. Effective April 1, 2017, distributions of a finished nicotine product sold in combination with items such as atomizers, mods, vaping tanks, or part of any other nicotine delivery device for a single price are subject to the tobacco products tax. The tax is calculated on the combined finished product's wholesale cost.

Tobacco products tax rate

Tobacco products are taxed based on their wholesale cost prior to any discounts or trade allowances. Effective April 1, 2017, distributions of eCigarette products containing nicotine are subject to the tobacco products tax. The BOE sets the tax rate for the tobacco products tax on July 1 on an annual basis based at an equivalent rate to that of cigarettes. Proposition 56 increased the cigarette tax rate from $0.0435 to $0.1435 per cigarette (tax on a package of 20 cigarettes will increase from $0.87 to $2.87) effective April 1, 2017. It is expected that the tax on distributions of tobacco products, including electronic cigarette products containing nicotine, will increase at a rate equivalent to the Proposition 56 increase on cigarettes, effective July 1, 2017. Current and past tobacco products tax rates can be found on the BOE public website.

Examples of who owes the tobacco products tax:

Example 1: Business A purchases untaxed eLiquids from a manufacturer (either in-state or out-of-state). Business A is considered a tobacco products distributor and owes the tobacco products tax to the BOE upon distribution in California. Sales invoices from licensed distributors must include a statement that indicates the California tobacco products taxes have been paid on the tobacco products sold.

Example 2: Business B purchases untaxed eLiquids from an out-of-state wholesaler (vendor) who is not licensed by the BOE as a tobacco products distributor and sells to stores in California. Business B is considered a tobacco products distributor and owes the tobacco products tax to the BOE upon distribution in California. Unlike a licensed distributor, an in-state wholesaler is not allowed to sell or be in possession of untaxed tobacco products. Licensed wholesalers must include a statement on their sales invoices that indicates the California tobacco products taxes have been paid on the tobacco products sold, even though the tobacco products taxes are owed and paid by distributors.

Example 3: Business C is located in California and sells online to stores outside of California. Sales of tobacco products delivered to customers at an out-of-state location are exempt from the California tobacco products tax. Interstate commerce sales of tobacco products are not considered California distributions of untaxed tobacco products subject to the tobacco products tax.

Example 4: Business D manufactures eLiquids in California and sells them directly and online across the U.S., including to California distributors, retailers, and consumers. Business D is considered a tobacco products manufacturer, distributor and retailer. Business D, as a tobacco products manufacturer can make untaxed sales to licensed distributors in California. Business D, as a tobacco products distributor, owes the tobacco products tax to the BOE upon distribution to California licensed retailers and consumers. Since Business D sells directly to consumers, Business D is also considered a tobacco products retailer.

Example 5: Business E is a licensed distributor and sells tobacco products, that were purchased ex-tax from a manufacturer, to Business F, another licensed distributor. Business E owes the tobacco products tax to the BOE upon this distribution.

Example 6: Business G is an original importer that holds a tobacco products importer's license and sells untaxed tobacco products to Business H, a licensed distributor. 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). Business H (the licensed distributor) owes the tobacco products tax to the BOE upon distribution in California.

Example 7: Business J manufactures nicotine vape liquids outside of California and sells them to Business K located in California for resale. Business J and K are both engaged in the sale of tobacco products and are required to be licensed with the BOE. Business K may not purchase nicotine products from an unlicensed manufacturer. Business K is considered a distributor, is required to hold a Tobacco Products Distributor's Account and License, and owes the tobacco products excise tax to the BOE upon distribution in California.

Minimum Age of Sale

Effective June 9, 2016, the minimum age to purchase cigarettes and tobacco products in California was raised from 18 to 21, except for active duty military personnel in the U.S. Armed Forces. See the California Department of Public Health's Tobacco 21 website for more information.

Need to know more? Follow the links below for more information about the topics covered in this guide, as well as other information you might find helpful:

Laws

Regulations

Publications

Tax Rates and License Fees

Special Notices

Archives:

Online Seminars and Instructor-led Classes

Verify a License

Select one of the following links below for a list of current licensed California cigarette and tobacco products distributors or wholesalers. As a distributor, wholesaler, or retailer, you are responsible for verifying the entity you are purchasing from or selling to has a valid cigarette and tobacco products license.

Public Data

Enforcement/Tax Evasion

Related Websites

Additional Sources

Other Helpful Resources

  • Contact Us – A listing of BOE contacts for your questions and concerns.
  • Sign Up for BOE Updates – Subscribe to our email lists and receive the latest news, newsletters, tax and fee updates, public meeting agendas, and other announcements.
  • Videos and How-To Guides – These resources will help you avoid common mistakes, file your tax returns online, and more.
  • City and County Tax Rates – A listing of current and historical tax rates.
  • Find a Sales and Use Tax Rate – Enter an address and find the sales and use tax rate for that location.
  • BOE Online Services – Learn about the online services BOE offers.
  • Verify a Permit or License – You can use this application to verify a seller's permit, Cigarette and Tobacco products license, eWaste account, or Underground Storage Tank Maintenance Fee Account.
  • BOE Field Offices – A comprehensive listing of all BOE field offices and contact information.
  • Find Your Board Member – You can use this application to quickly identify your elected BOE representative.
  • Get It In Writing! – Tax and Fee Laws can be complex, and you are encouraged to put your tax questions in writing. You may also send your request in a letter to: Special Taxes and Fees, MIC:31, State Board of Equalization, P.O. Box 942879, Sacramento, CA 94279-0031.
  • Taxpayers' Rights Advocate (TRA) – The TRA Office helps taxpayers when they are unable to resolve a matter through normal channels, such as speaking to a supervisor, or when there are apparent rights violations.