The cigarette tax is assessed on each cigarette distributed in the State of California. The cigarette tax is paid by distributors through the use of stamps which are affixed to each package of cigarettes prior to distribution. To purchase cigarette tax stamps, you must be a licensed cigarette distributor. Since the tax is assessed on a per cigarette basis, the tax value of the affixed stamp varies depending on the number of cigarettes in the pack. The tax rate is comprised of a single tax and two surtaxes.
The tobacco products tax is imposed upon the distribution of tobacco products based on the wholesale cost of these products at a rate determined annually by the State Board of Equalization (BOE). Tobacco products include all forms of cigars, smoking tobacco, chewing tobacco, and snuff, as well as any other articles or products made of, or containing, at least 50 percent tobacco.
For information on the current tax rates for cigarette and other tobacco products, click here.
The Cigarette and Tobacco Product Licensing Act (Act) was mandated by Assembly Bill (AB) 71 (Chapter 890, Statutes of 2003) and AB 1749 (Chapter 501, Statutes of 2006). The Act imposes licensing requirements on all retailers, wholesalers, distributors, manufacturers and importers of cigarettes and tobacco products within the State of California.
The BOE has implemented the Cigarette and Tobacco Products Internet Program to collect the state excise taxes and use taxes from California consumers purchasing untaxed cigarettes and/or tobacco products from out-of-state Internet retailers, and/or by way of
mail or telephone, for self-consumption in California.
For more information on cigarette and tobacco product taxes, please review Publication 93, California Cigarette and Tobacco Product Taxes .
Common carriers making deliveries of shipments of cigarettes into California must obtain a permit and report their deliveries to the BOE. See Common Carriers of Cigarettes for more information.
Cigarette and tobacco product tax evasion is a serious crime.
Cigarette and tobacco product tax evasion is a serious and expanding problem in California and other states. Tax evasion cheats programs that provide essential services for the state's residents and hurts honest businesses.
Retailers who purchase cigarettes or tobacco products from other than licensed wholesalers and distributors should be aware that they are in violation of the law and these products are subject to seizure by the BOE.
The BOE's Investigation Division actively investigates and makes seizures of unstamped or counterfeit stamped cigarettes and imports of domestic labeled cigarettes or export type cigarettes stamped in violation of the law.
A retailer's best defense against dealing in products subject to seizure is to purchase cigarettes from a licensed cigarette wholesaler or distributor and to obtain a purchase receipt that contains the proper information. Under regulation 4092, Receipt for Tax Paid to Distributors, every cigarette distributor is required to give the retailer a receipt. A proper sales invoice, together with evidence of payment, constitutes a valid receipt.
The most recent list of Licensed California Cigarette and Tobacco Products Distributors and Wholesalers is now available.