Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2015
 

Cigarette and Tobacco Products Licensing Act Regulations

Title 18 of the California Code of Regulations

Article 4. Penalties and Fines

Regulation 4604

Regulation 4604. Penalties for Licensed or Unlicensed Wholesalers and Distributors.

Reference: Sections 22974.7, 22977(a)(5), 22978.1, 22978.2, 22978.4 (a) and (b) 22978.5deletion(a), 22978.7, 22979.7, 22980(b), 22980.1(b), (c), (d), (e), (f), and (g), 22980.2(a), and 22980.3(a)(2) and (d), Business and Professions Code.

The following penalties shall be assessed in addition to any other civil or criminal penalty provided by law upon a finding that a wholesaler or distributor has violated any provision of the Act:

(a) A first offense of a violation of any of the following provisions will result in the issuance of a Warning Notice to the licensee or unlicensed person:

(1) Business and Professions Code section 22978.1 (distributor's or wholesaler's failure to retain purchase invoices).

(2) Business and Professions Code section 22978.4, subdivisions deletion(a) or (b) (distributor's or wholesaler's failure to comply with invoice requirements).

(3) Business and Professions Code section 22978.5, subdivision deletion(a) (distributor's or wholesaler's failure to retain sales records).

(4) Business and Professions Code section 22980.1, subdivision (b), (c), (d), (e) (sales to or purchases from unlicensed person or person with suspended or revoked license) or (f) (sales of cigarettes or tobacco products to retailer or wholesaler revoked or suspended until debts are clear).

(5) Business and Professions Code section 22980.2, subdivision (a) (sales of cigarettes or tobacco products by unlicensed person or person with suspended or revoked license).

(b) A first offense of a violation of any of the following provisions will result in the issuance of a 20-day suspension:

(1) Business and Professions Code section 22977, subdivision (a)(5) (distributor's or wholesaler's false statement on application).

(2) Business and Professions Code section 22980, subdivision (b) (any person's refusal to allow inspection).

(3) Business and Professions Code section 22980.1, subdivision (g) (purchase of cigarettes to which a stamp may not be affixed in accordance with Rev. & Tax. Code section 30163, subd. (b)).

(c) A second or subsequent offense for a violation of the provisions listed in subdivision (a) or (b) above shall result in both a 30-day suspension or revocation, and a fine. The fine shall be determined in accordance with Regulation 4607.

(d) A violation of Business and Profession Code section 22978.2 (possession of counterfeit stamped cigarettes by distributors, unstamped cigarettes by wholesalers or untaxed tobacco products) shall result in the following:

(1) Notwithstanding paragraphs (2) and (3) below, a Warning Notice for a first offense when the licensee or unlicensed person has been in business for less than one month and there has been no purchase of new cigarette or tobacco product inventory during the month.

(2) A 10-day suspension for a first offense for a seizure of less than 20 packages of cigarettes, or the equivalent amount of tobacco products based on wholesale cost.

(3) A 20-day suspension for a first offense for a seizure of 20 packages of cigarettes or more, or the equivalent amount of tobacco products based on wholesale cost.

(4) Both a 30-day suspension or revocation and a fine for a second or subsequent offense. The fine will be determined in accordance with deletionRegulation 4607.

(e) In cases involving multiple violations, the violation punishable by the most severe penalty will be used for purposes of determining the penalty assessed.

(f) Notwithstanding subdivisions (b) through (e) above, a reduction in the length of a suspension period may be warranted if mitigating circumstances are present, as set forth in Regulation 4606. If any suspension period is reduced, the redetermined period of suspension shall be 0 days, 5 days, 10 days, or 20 days. The existence of mitigating circumstances may also warrant reducing a revocation penalty to a 30-day suspension, unless revocation is mandated pursuant to Business and Professions Code section 22978.2, subdivision (a)(2) or subdivision (a)(4), 22978.6, or 22980.3, subdivision (a)(2) or subdivision (d).

History: Adopted December 12, 2006, effective April 21, 2007.

Amended June 11, 2013, effective October 1, 2013. Inserted "5 days," into the second sentence in subdivision (f); inserted the reference to Business and Professions Code section 22978.2, subdivision (a)(2) or subdivision (a)(4) into, deleted the reference to Business and Professions Code section 22974.4 from, and added "or subdivision (d)" to the last sentence in subdivision (f); and moved the reference to Business and Professions Code section 22978.7 in and added a reference to Business and Professions Code sections 22980.3, subdivisions (a)(2) and (d) to the regulation’s reference note.

Amended September 23, 2014, effective December 1, 2014. Changes without regulatory effect to replace the reference to Business and Professions Code (BPC) section 22978.4, "subdivision (c)" with a reference to BPC section 22978.4, "subdivisions (a) or (b)," in subdivision (a)(2), and add a reference to BPC section 22978.4, subdivisions (a) and (b) to the regulationís reference note; replace the references to BPC section 22978.5, subdivision "(b)" with references to BPC section 22978.5, subdivision "(a)" in subdivision (a)(3) and the regulationís reference note; and replace the reference to "section" 4607 with a reference to "Regulation" 4607 in subdivision (d)(4).