California Cigarette & Tobacco Products Licensing Act of 2003 – Distributor's and Wholesaler's License FAQs
Please note: the following requirements do not apply to tobacco products that are not subject to the tobacco products tax (for example, vape liquids that do not contain any nicotine), as there are currently no cigarette and tobacco products licensing requirements for distributors, wholesalers, or importers of these types of products.
Who is a distributor or wholesaler of cigarette and tobacco products?
A cigarette distributor is a person or company that purchases untaxed (unstamped) cigarettes and makes the first distribution of cigarettes in this state. In general, distributors purchase cigarettes before any California cigarette tax is due, and then sell stamped cigarettes to wholesalers, other distributors, and retailers.
A tobacco products distributor is a person or company that makes the first distribution of tobacco products in this state. In general, distributors purchase tobacco products before any California tobacco products tax is due and then pay the tax when they sell or distribute the tobacco products.
A distribution includes the first sale,use, or consumption of untaxed cigarettes or untaxed tobacco products in California, and the placing of untaxed cigarettes or untaxed tobacco products into a vending machine or retail stock in California (Revenue and Taxation Code section 30008).
A cigarette wholesaler is a person or company, other than a licensed distributor, that sells taxed (stamped) cigarettes obtained from a licensed distributor or another licensed wholesaler for resale. Cigarette wholesalers cannot purchase or be in possession of untaxed (unstamped) cigarettes.
A tobacco products wholesaler is a person, other than a licensed distributor, who sells tax-paid tobacco products for resale. Tobacco products wholesalers cannot purchase or be in possession of untaxed tobacco products.
Who is required to obtain and maintain a distributor or wholesaler's license?
In accordance with the California Cigarette and Tobacco Products Licensing Act of 2003 (Licensing Act), every distributor and every wholesaler (defined in sections 30011 and 30016 of the Revenue and Taxation Code) is required to annually obtain and maintain a cigarette and tobacco products license from the Board of Equalization (BOE) in order to engage in the sale or distribution of cigarette and tobacco products in California. This licensing requirement is in addition to other BOE permit and licensing programs that may be required depending on your business operations.
Every distributor and every wholesaler must obtain a cigarette and tobacco products license. Each distributor or wholesaler's license has a fee for each location at which cigarettes or tobacco products are sold or distributed. A distributor or wholesaler's license is valid for a calendar year (January through December), with no proration of the fee, and is not assignable or transferable. Each license must be renewed annually. For example, if you pay the license application fee and obtain a distributor's license in the month of October 2017, you will be required to pay the license renewal fee before the end of December 2017 to renew the license for each location. See our tax and fee rates page for the license fees. If you have a distributor's license, you do not need a separate wholesaler's license.
Register for a distributor's or wholesaler's cigarette and tobacco products license or account using online registration. Online registration is the convenient way to register and is available 24 hours a day.
What are my responsibilities as a holder of a distributor or wholesaler's license under the Licensing Act?
Distributors and wholesalers of cigarettes or tobacco products must:
- Obtain a Seller's Permit.
- Maintain a valid cigarette and tobacco products license for each location where cigarettes or tobacco products are sold.
- Maintain complete and legible cigarettes and tobacco products purchase and sales records for four (4) years and keep records (such as invoices and receipts) on file at the location identified on your license for at least one year after the date of purchase or sale.
- Allow BOE or law enforcement agency personnel to review your sales and purchase records upon request.
- Make sure that sales invoices meet all legal requirements. Each sales invoice must be legible, readable, and include the following:
- Your name, address, telephone number, and your distributor or wholesaler's license number.
- The name, address, and license number of the business purchasing the cigarettes or tobacco products. You may not legally sell cigarettes or tobacco products to an unlicensed buyer or purchase them from an unlicensed seller. However, as a licensed distributor is the entity that is responsible for paying the cigarette and tobacco products taxes to the BOE, it may purchase product from an unlicensed seller that is located outside of California.
- The date you sold the cigarettes or tobacco products.
- An itemized list of the cigarettes or tobacco products sold. Cigarettes must be listed by the brand and style names, flavor, filter, and/or packaging when applicable, number of cartons or packs sold, and the sales price. Tobacco products must be listed by brand, type (such as pipe, cigars, or roll-your-own), flavor, packaging (such as pouches, tins, or boxes), quantity sold, and sales price.
- The amount of California cigarette and tobacco products taxes due to the BOE by the distributor on the sale of cigarettes and tobacco products listed on the invoice. However, a distributor that is also a licensed retailer or manufacturer may include this statement instead of providing the amount of cigarette and tobacco products taxes due to the BOE: "All California cigarette and tobacco products taxes are included in the total amount of this invoice."
However, a distributor that is also a retailer or manufacturer must include either one of the following on each invoice for the sale of cigarettes or tobacco products:
- A statement that reads: "All California cigarette and tobacco products taxes are included in the total amount of this invoice."
- The amount of cigarette and tobacco products taxes due to the BOE by the distributor on the distribution of cigarettes and tobacco products.
- A statement that identifies any cigarettes or tobacco products sold without tax under Revenue and Taxation Code section 30105 (only if you are a distributor that is an original importer of the tobacco products you are selling).
Will I need to apply for any other permits?
Depending on your business operations, you may be required to obtain more than just a distributor or wholesaler's cigarette and tobacco products license. If you are a new distributor or wholesaler, you may need to obtain a seller's permit from the BOE for reporting sales and use tax. If you are a distributor or wholesaler that sells directly to consumers, you will also need to obtain a Cigarette and Tobacco Products Retailer's License in addition to a distributor or wholesaler's cigarette and tobacco products license. For more information, call the Customer Service Center at 1-800-400-7115 (TTY:711) and select "Special Taxes and Fees" from the main menu. Customer service representatives are available weekdays from 8:00 a.m. to 5:00 p.m. (Pacific time), except state holidays.
Enforcement and Penalties
BOE staff and law enforcement are authorized to conduct inspections of businesses selling cigarettes and/or tobacco products in California. They will identify themselves and present their credentials upon entering your business location.
They will examine the cigarettes and tobacco products at your business location and any other area where you may keep additional inventory. Any untaxed (unstamped) cigarettes or tobacco products, including cigarettes affixed with other state stamps and "unaffixed" cigarette tax stamps found at a wholesaler's location are subject to seizure. Possession of cigarettes affixed with counterfeit or reused tax stamps or unaffixed counterfeit or reused tax stamps are subject to seizure. "Unaffixed stamps" means cigarette tax stamps for which the tax has previously been paid by a licensed cigarette and tobacco products distributor and that were previously affixed to cigarette packs. "Unaffixed stamps" do not include any unused and unapplied rolls of stamps or loose stamps acquired from the BOE or its authorized agent and in the possession of a licensed distributor.
Failure to maintain accurate and complete records and include the required information on invoices is a misdemeanor punishable by a fine not to exceed five thousand dollars ($5,000) per offense and/or imprisonment not to exceed one year in a county jail.
As a distributor or wholesaler, it is illegal for you to purchase cigarettes or tobacco products from an unlicensed manufacturer/importer or any other person who is not licensed pursuant to the Licensing Act, or whose license has been suspended or revoked. Please note, it is illegal for a distributor to purchase cigarettes or tobacco products from any unlicensed person who is required to be licensed under the Licensing Act. Also, you may not sell cigarettes or tobacco products to an unlicensed distributor, wholesaler, retailer, any other unlicensed person, or any person whose license has been suspended or revoked.
Sales, Importation, and Notification Requirements
Section 30165.1 of the Revenue and Taxation Code requires the California Office of the Attorney General to compile and publish a directory of cigarette and tobacco manufacturers and brand families. Distributors may not sell, offer, possess for sale, or import for personal consumption any cigarettes or "roll-your-own" tobacco in California unless the manufacturer and brand family are listed in the California Tobacco Directory. In addition, it is illegal for a distributor to affix or cause to be affixed any tax stamp or meter impression to a pack of cigarettes or pay the tax on roll-your-own tobacco unless the tobacco products manufacturer and brand family are listed in the directory. Cigarettes or roll-you-own tobacco not listed in that directory are subject to seizure by the BOE and law enforcement agencies. The California Office of the Attorney General posts the directory on their California Tobacco Directory website.
The California Office of the Attorney General must provide distributors with written notice of any changes to the directory after it is first published. Since that notice will be sent by email, cigarette and tobacco products distributors must provide an email address to the California Office of the Attorney General and update it as needed. You may do this by sending an email to their California Tobacco Directory mailbox. You will receive an email acknowledging that the California Office of the Attorney General has received and recorded your email address.
Distributors that violate these provisions may be subject to civil and criminal penalties and the seizure or forfeiture of any noncompliant product. In addition, we may revoke or suspended your license.
The Investigations Division of the BOE may issue citations to a licensee that is not in compliance with the provisions of the Licensing Act or the Cigarette and Tobacco Products Tax Law. Two types of citations may be issued: civil citations and criminal citations. The criminal citation is a Notice to Appear in court. Both types of citations are subject to civil penalties.
Criminal citations are processed through the court system. Depending on the violation(s) cited, the court may impose fines, jail time, or both. Once the criminal proceedings are complete, the BOE may impose additional civil penalties.
A civil appeals process is available to the licensee for violations cited, civil penalties imposed, and suspension or revocation of a license. Additional information on the California Cigarette and Tobacco Products Licensing Act of 2003 – Civil Appeals Process is available on the Investigations webpage.You can also review the Frequently Asked Questions regarding the appeals process.
For additional information on penalties for noncompliance and enforcement provisions under the Licensing Act, visit the Investigations Division website or contact them by phone at 1-916-324-0105.
No person shall be issued a distributor's license, pursuant to section 30140 of the Revenue and Taxation Code, unless that person has certified in writing that they will fully comply with Revenue and Taxation Code section 30165.1. Your application for a distributor's license under section 30140 of the Revenue and Taxation Code will not be processed or approved if it is incomplete or submitted without a Compliance Certification (Form BOE-443) (Revenue and Taxation Code Section 30165.1).
For more information
- Important Notice – Is it listed in the Tobacco Directory? If not, you cannot legally sell...
- Assembly Bill 71
- Cigarette and Tobacco Products Licensing Act of 2003
- Attorney General's California Tobacco Directory
- Tobacco 21
If you have additional questions about how the California Cigarette and Tobacco Products Licensing Act of 2003 applies to your business, you may call our Customer Service Center at 1-800-400-7115 (TTY:711) and select the "Special Taxes and Fees" option.
Customer service representatives are available to assist you weekdays from 8:00 a.m. to 5:00 p.m. (Pacific time), except state holidays, or you may write to:
Board of Equalization
Business Tax and Fee Department
P.O. Box 948279
Sacramento, California 94279-0088