Publication 216, The First 100 Years


The Cigarette Tax

The decade following enactment of the Bradley-Burns Uniform Local Sales and Use Tax Law, 1955-1965, witnessed the addition of two new taxes—the Cigarette Tax and the Subscription Television Tax. The recession of 1958 had left California with its greatest fiscal crisis since the Great Depression. The Legislature was faced with a budget deficit of $68,000,000 for the fiscal year 1958-59 and a prospective deficit of $200,000,000 for fiscal 1959-60.97 In response, Governor Edmund G. Brown recommended increases in several of the existing taxes as well as the addition of a cigarette tax and an oil and gas severance tax. All but the oil and gas severance tax were made law, though in a somewhat modified form.

A three-cents-per-package Cigarette Tax became effective July 1, 1959; administration was assigned to the Board of Equalization.

Also in 1959, the taxing of liquified petroleum gas (LPG) was transferred from the Motor Vehicle Fuel License Tax Law to the Use Fuel Tax Law. The vendors of LPG, like those of diesel fuel, were also required to collect the tax from the purchase of fuel delivered into the tanks of motor vehicles.98

97 California Legislature, Report of the Legislative Analyst to the Joint Legislative Budget Committee. Analysis of the Budget Bill, Sacramento State Printing Office, February 1, 1959, p. vii

98 This requirement was originally imposed on vendors of diesel fuel on October 1, 1957 by the provision of Chapter 1830, Statutes of 1957, amending Section 8732 of the Revenue and Taxation Code.