Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2017
 

Cigarette and Tobacco Products Tax Law

CHAPTER 2. IMPOSITION OF TAX.

Article 2. Cigarette and Tobacco Products Surtax1

Section 30121

30121. Definitions. For purposes of this article:

(a) "Cigarettes" has the same meaning as in Section 30003, as it read on January 1, 1988.

(b) "Tobacco products" includes, but is not limited to,deletiona product containing, made, or derived from tobacco or nicotine that is intended for human consumption, whether smoked, heated, chewed, absorbed, dissolved, inhaled, snorted, sniffed, or ingested by any other means, including, but not limited to, cigars, little cigars, chewing tobacco, pipe tobacco, or snuff, but does not include cigarettes. Tobacco products shall also include electronic cigarettes. Tobacco products shall 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 where that product is marketed and sold solely for such approved use. Tobacco products does not include any food products as that term is defined pursuant to Section 6359.

(c) "Electronic cigarettes" means any device or delivery system sold in combination with nicotine which can be used to deliver to a person nicotine in aerosolized or vaporized form, including, but not limited to, an e-cigarette, e-cigar, e-pipe, vape pen, or e-hookah. Electronic cigarettes include any component, part, or accessory of such a device that is used during the operation of the device when sold in combination with any liquid or substance containing nicotine. Electronic cigarettes also include any liquid or substance containing nicotine, whether sold separately or sold in combination with any device that could be used to deliver to a person nicotine in aerosolized or vaporized form. Electronic cigarettes do not include any device not sold in combination with any liquid or substance containing nicotine, or any battery, battery charger, carrying case, or other accessory not used in the operation of the device if sold separately. Electronic cigarettes shall 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 where that product is marketed and sold solely for such approved use. As used in this subdivision, nicotine does not include any food products as that term is defined pursuant to Section 6359.

(deletiond) "Fund" means the Cigarette and Tobacco Products Surtax Fund created by Section 30122.

History.—Proposition 56, Section 3.1, approved by voters at the November 8, 2016 election, operative April 1, 2017, substituted "a product containing, made, or derived from tobacco or nicotine . . . pipe tobacco, or snuff" for "all forms of cigars, smoking tobacco, chewing tobacco, snuff, and any other articles or products made of, or containing at least 50 percent, tobacco" after ""Tobacco Products" includes, but is not limited to" and added the second, third, and fourth sentences, to subdivision (b); added subdivision (c); and relettered former subdivision (c) as (d).

Note.—Proposition 56, Section 10, approved by voters at the November 8, 2016 election, in effect November 9, 2016, states "This act shall become effective as provided in subdivision (a) of Section 10 of Article II of the California Constitution; provided, however, the amendment to Section 30121 of the Revenue and Taxation Code shall become effective April 1, 2017."

Tobacco Tax and Health Protection Act of 1988 (Proposition 99) is Constitutional.—A statutory initiative, approved by a majority of the electorate, that increases taxes on cigarettes and other tobacco related products and allocates the revenue raised to address tobacco related problems does not violate the provisions of the California State Constitution related to changes in State taxes for the purpose of increasing revenue (ART. XIIIA §§3 & 4) or the single subject rule. (ART. II §8(d)) Kennedy Wholesale, Inc. v. State Board of Equalization, (1991) 53 Cal.3d 245.

1Article 2 adopted by voters, Prop 99 Sec. 4, in effect January 1, 1989.