Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2013
 

Cigarette and Tobacco Products Tax Law

CHAPTER 2. IMPOSITION OF TAX.

Article 1. Tax on Distributors

Section 30101.7

30101.7. Face-to-face sale. (a) It is the intent of the Legislature in enacting this section to facilitate the collection of all applicable state surtaxes, sales or use taxes, and escrow and other payment obligationson on cigarettes sold to residents of the state and to ensure compliance with the Prevent All Cigarette Trafficking Act of 2009 (PACT Act; Public Law 111-154).

(b) Except as provided in subdivision (d), no person may engage in a retail sale of cigarettes in California unless the sale is a vendor-assisted, face-to-face sale.

(c) For the purposes of this section, the following definitions shall apply:

(1) "Consumer" means a person who purchases cigarettes or tobacco products. "Consumer" does not include any person licensed under this part or under Division 8.6 (commencing with Section 22970) of the Business and Professions Code and lawfully operating as a manufacturer, distributor, wholesaler, or retailer of cigarettes or tobacco products.

(2) "Delivery sale" means sale of cigarettes or tobacco products into and in this state in either of the following cases:

(A) The consumer submits the order for the sale by means of a telephone or other method of voice transmission, the mail, or the Internet or other online service, or the seller is otherwise not in the physical presence of the consumer when the request for purchase or order is made.

(B) The cigarettes or tobacco products are delivered to the consumer by common carrier, private delivery service, or other method of remote delivery, or the seller is not in the physical presence of the consumer when the consumer obtains possession of the cigarettes or tobacco products.

(3) "Delivery seller" means a person who makes a delivery sale.

(4) "Face-to-face sale" means a sale in which the purchaser is in the physical presence of the seller or the seller's employee or agent at the time of the sale. A face-to-face sale does not include a delivery sale.

(5) "Indian country" shall have the same meaning as provided in Section 1151 of Title 18 of the United States Code, and includes any other land held by the United States in trust or restricted status for one or more Indian tribes.

(6) "Interstate commerce" means commerce between a state and any place outside the state, commerce between a state and Indian country in the state, or commerce between points in the same state but through a place outside of the state or through any Indian country.

(7) "Tobacco products" shall have the same meaning as otherwise defined under this part with the exception of cigars.

(d) A person may engage in delivery sale of cigarettes or tobacco products to a person in California provided that all of the following conditions are met:

(1) The delivery seller has fully complied with all of the requirements of Chapter 10A (commencing with Section 375) of Title 15 of the United States Code, otherwise known as the Jenkins Act.

(2) The delivery seller obtains and maintains any applicable license under this part and under Division 8.6 (commencing with Section 22970) of the Business and Professions Code, as if the delivery sales occurred entirely within this state.

(3) The delivery seller complies with any applicable state law that imposes escrow or other payment obligations on tobacco product manufacturers, including, but not limited to, Sections 104555 to 104557, inclusive, of the Health and Safety Code.

(4) The Attorney General may require the delivery seller to report to the Attorney General its delivery sales of cigarettes and tobacco products to California consumers in the form and manner specified by the Attorney General.

(e) Any violation of this section by any person is a misdemeanor. Each offense shall be punishable by a fine not to exceed five thousand dollars ($5,000), or imprisonment not to exceed one year in a county jail, or both the fine and imprisonment. The amount of any fines assessed shall be deposited in the Cigarette and Tobacco Products Compliance Fund.

(f) The State Board of Equalization may provide information relative to a seller's failure or attempt to comply with the PACT Act and the Jenkins Act to the Attorney General.

(g) The Attorney General or a city attorney, county counsel, or district attorney may bring a civil action to enforce this section against a person that violates this section and, in addition to any other remedy provided by law, the court shall assess a civil penalty in accordance with the following schedule:

(1) A civil penalty of not less than one thousand dollars ($1,000) and not more than two thousand dollars ($2,000) for the first violation.

(2) A civil penalty of not less than two thousand five hundred dollars ($2,500) and not more than three thousand five hundred dollars ($3,500) for the second violation within a five-year period.

(3) A civil penalty of not less than four thousand dollars ($4,000) and not more than five thousand dollars ($5,000) for the third violation within a five-year period.

(4) A civil penalty of not less than five thousand five hundred dollars ($5,500) and not more than six thousand five hundred dollars ($6,500) for a fourth violation within a five-year period.

(5) A civil penalty of up to ten thousand dollars ($10,000) for a fifth or subsequent violation within a five-year period.

(h) This section does not prohibit the lawful sale of a tobacco product that occurs by means of a vending machine.

(i) Nothing in this section shall relieve the seller of cigarettes from any other applicable requirement of state law relating to the sale or distribution of cigarettes or tobacco products in this state.

(j) The board shall enforce the licensing and tax provisions of this section. Other provisions of this section shall be enforced by the Attorney General.

(k) The provisions of this section are severable. If any provision of this section or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.

History.—Added by Stats. 2001, Ch. 686 (SB 1766), in effect January 1, 2003. Stats. 2003, Ch. 603 (SB 1016), in effect January 1, 2004, substituted "both" for "either" after "provided that" and substituted "are" for "is" after "following conditions", added paragraphs (1) and (2), letter former paragraph (1) and (2) as subparagraphs (A) and (B), respectively, in subdivision (d); added subdivisions (e) and (g); and relettered former subdivisions (e), (f), (g), and (h) as subdivisions (f), (h), (i), and (j), respectively. Stats. 2010, Ch. 265 (AB 2496), in effect January 1, 2011, substituted "," for "and" after "applicable state surtaxes", added ", and escrow and other payment obligations" after "sales or use taxes", added "and to ensure compliance with the Prevent All Cigarette Trafficking Act of 2009 (PACT Act; Public Law 111-154)" after "residents of the state" in subdivision (a); substituted "the following definitions shall apply:" after "For the purposes of this section" in, and added paragraphs (1) – (7) to, subdivision (c); substituted "delivery" for "a non-face-to-face" after "may engage in", added "or tobacco products" after "of cigarettes", and substituted "all" for "both" after "provided that" in, added "delivery" after "The" in paragraph (1) of, deleted former paragraph (2) of, and added paragraphs (3) – (4) to, subdivision (d); added subdivision (e) and redesignated former subdivision (e) and (f) as subdivisions (f) and (g), respectively; substituted "may" for "shall" after "Equalization" and added "PACT Act and the" after "comply with the" in redesignated subdivision (f); substituted "a" for "any" after section against" and substituted "remedy" for "remedies" after "any other" in, substituted "five-year" for "five year" after violation within a" in paragraph (3) of, added "up to" after "civil penalty of" in paragraph (5) of, redesignated subdivision (g); deleted former subdivision (g); substituted "the" for "any" after "does not prohibit" in subdivision (h); added "or distribution" after "to the sale" and added "or tobacco products in this state" after "or distribution of cigarettes" in subdivision (i); added subdivision (j); and redesignated former subdivision (j) as subdivision (k).

Note.—SEC. 9. of Stats. 2010. Ch. 265 (AB 2496), in effect January 1, 2011, states, Nothing in this act preempts or supersedes any local tobacco control law or ordinance other than those laws or ordinances that are related to the collection of state taxes. Local licensing laws or ordinances may provide for the suspension or revocation of licenses issued by a local government or agency for a violation of the laws imposed under the Cigarette and Tobacco Products Tax Law (Part 13 (commencing with Section 30001) of Division 2 of the Revenue and Taxation Code).