Cigarette and Tobacco Products Licensing Act of 2003
The Board of Equalization (BOE) estimates that California loses approximately $175 million each year in unpaid excise taxes on cigarette and tobacco products. In 2004, the Cigarette and Tobacco Products Licensing Act (CTPLA) of 2003, established a statewide licensure program to help stem the tide of untaxed purchases and illegal sales of cigarettes and tobacco products in the State of California. A license is required in addition to the BOE's seller's permit, or other licenses, and applies to retailers, distributors, wholesalers, manufacturers and importers of cigarettes or tobacco products.
If you sell or distribute cigarettes or tobacco products in the State of California, you must obtain a CTPLA license. For information about which cigarette and tobacco product license you must obtain, how to apply for it, and other requirements you must follow in order to comply with the law, see the BOE's guide on Cigarettes and Tobacco Products.
What if I don't get a license?
If you do not obtain a license and continue to sell cigarettes or tobacco products, you will be subject to fines up to $5,000, imprisonment up to one year in the county jail, or both the fines and imprisonment. A separate license is required for each location where cigarettes or tobacco products are sold. The State Board of Equalization, Department of Public Health, and local authorities monitor licensing.
Do I have to post the license?
Yes. Retailers must conspicuously display their license at each retail location in a manner visible to the public. If retailers fail to display the license, they may be fined $500 and their license may ultimately be subject to suspension or revocation.
Who will be enforcing this Act?
The State Board of Equalization, Office of the Attorney General and any law enforcement officer in this state has enforcement authority.
What other enforcement provisions does this Act provide?
- You must allow BOE staff or law enforcement agencies to review your invoices upon request. Note: Legible and complete cigarette and tobacco product purchase records must be kept for four years and available at the location identified on your license for at least one year after the date of purchase. Wholesalers and distributors are required to maintain sales records as well.
- Upon presentation of authorized credentials, staff from the BOE and law enforcement agencies may inspect retail or wholesale locations and seize any untaxed cigarettes and tobacco products. This includes cigarettes without tax stamps, with reused or counterfeit stamps, or cigarettes to which cigarette tax stamps or meter impressions are affixed in violation of the specified prohibitions of the Master Settlement Agreement (Revenue & Taxation Code section 30165.1). "Unstamped" cigarette packages may also include a package of cigarettes that bears a tax stamp of another state, or cigarette package, stamped or unstamped, that is marked "Not for sale in the United States." The BOE is also authorized to seize aggregates of used "unaffixed" stamps.
Other informative links
- More information about this law (Assembly Bill 71, Chapter 890, Statutes 2003)
- Cigarette and Tobacco Products Guide
- Publication 78, Sales of Cigarettes and Tobacco Products in California – License Requirement for Retailers
- Publication 152, Cigarette and Tobacco Product Inspections
- Publication 403, California's Counterfeit-Resistant Cigarette Tax Stamp
- Publication 473, Things to Know Before You Buy Cigarette and Tobacco Products!
- BOE Classes for Cigarette and Tobacco Retailers
- Guide for Cigarette and Tobacco Products Wholesalers and Distributors
- Cigarette and Tobacco Products Tax Evasion
To get more information about noncompliance penalties and enforcement provisions of this law, contact the BOE's Investigations Division at 1-916-324-0105.