Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2011
 

Cigarette and Tobacco Products Licensing Act Law

CHAPTER 5. INSPECTIONS, PROHIBITIONS, AND PENALTIES

Section 22980.1

deletion22980.1. Prohibitions. (a) No manufacturer or importer shall sell cigarettes or tobacco products to a distributor, wholesaler, retailer, or any other person who is not licensed pursuant to this division or whose license has been suspended or revoked.

(b) (1) Except as provided in paragraph (2), no distributor or wholesaler shall sell cigarettes or tobacco products to a retailer, wholesaler, distributor, or any other person who is not licensed pursuant to this division or whose license has been suspended or revoked.

(2) This subdivision does not apply to any sale of cigarettes or tobacco products by a distributor, wholesaler, or any other person to a retailer, wholesaler, distributor, or any other person that the state, pursuant to the United States Constitution, the laws of the United States, or the California Constitution, is prohibited from regulating.

(c) No retailer, distributor, or wholesaler shall purchase packages of cigarettes or tobacco products from a manufacturer or importer who is not licensed pursuant to this division or whose license has been suspended or revoked.

(d) (1) No retailer or wholesaler shall purchase cigarettes or tobacco products from any person who is not licensed pursuant to this division or whose license has been suspended or revoked.

(2) Notwithstanding subdivision (c), no distributor shall purchase cigarettes or tobacco products from any person who is required to be licensed pursuant to this division but who is not licensed or whose license has been suspended or revoked.

(e) Each separate sale to, or by, a retailer, wholesaler, distributor, importer, manufacturer, or any other person who is not licensed pursuant to this division shall constitute a separate violation.

(f) No manufacturer, distributor, wholesaler, or importer may sell cigarette or tobacco products to any retailer or wholesaler whose license has been suspended or revoked unless all outstanding debts of that retailer or wholesaler that are owed to a wholesaler or distributor for cigarette or tobacco products are paid and the license of that retailer or wholesaler has been reinstated by the board. Any payment received from a retailer or wholesaler shall be credited first to the outstanding debt for cigarettes or tobacco products and must be immediately reported to the board. The board shall determine the debt status of a suspended retailer or wholesaler licensee 25 days prior to the reinstatement of the license.

(g) No importer, distributor, or wholesaler, or distributor functioning as a wholesaler, or retailer, shall purchase, obtain, or otherwise acquire any package of cigarettes to which a stamp or meter impression may not be affixed in accordance with subdivision (b) of Section 30163 or subdivision (e) of Section 30165.1 of the Revenue and Taxation Code, or any cigarettes obtained from a manufacturer or importer that cannot demonstrate full compliance with all requirements of the federal Cigarette Labeling and Advertising Act (15 U.S.C. Sec. 13335a et seq.) for the reporting of ingredients added to cigarettes.

(h) (1) Failure to comply with the provisions of this section shall be a misdemeanor subject to penalties pursuant to Section 22981.

(2) Notwithstanding paragraph (1), a manufacturer or importer who uses the most up-to-date licensing information provided by the board on the board's Web site to determine a person's licensing status is presumed to be in compliance with this section.

(i) The amendments that are made to this section by the act adding this subdivision shall become operative May 1, 2007.

History.—Stats. 2004, Ch. 822 (AB 3092), in effect September 27, 2004, renumbered former subdivision (b) as paragraph (1), added paragraph (2), and substituted "Except as provided in paragraph (2), no" for "No" before "distributor, wholesaler, or importer" in subdivision (b). Stats. 2006, Ch. 501 (AB 1749), in effect January 1, 2007, but operative May 1, 2007, added "or importer" after "No manufacturer", added "or tobacco products" after "shall sell cigarettes", and deleted "importer," after "distributor, wholesaler," in subdivision (a); substituted "or wholesaler" for ", wholesaler, or importer" after "in paragraph (2), no distributor" in paragraph (1), and deleted "importer," after "to a retailer, wholesaler," in paragraph (2), subdivision (b); substituted "or wholesaler" for "wholesaler, or importer" after "No retailer, distributor,", added "or tobacco products" after "packages of cigarettes", and added "or importer" after "from a manufacturer" in subdivision (c); added paragraph designation (1) before the former sole paragraph, substituted "or wholesaler" for "distributor, wholesaler, or importer" after "No retailer,", substituted "not" for "required to be" after "from any person who is", deleted "but who is not licensed" after "pursuant to this division", and added paragraph (2) to subdivision (d); added paragraph designation (1) before former sole paragraph and added paragraph (2) to subdivision (h); and added subdivision (i). Stats. 2010, Ch. 265 (AB 2496), in effect January 1, 2011, added "or subdivision (e) of Section 30165.1" after "of Section 30163" in subdivision (g).