Distributor & Wholesaler License - California Cigarette & Tobacco Products Licensing Act of 2003
Who is required to obtain and maintain a Distributor or Wholesaler license?
In accordance with the California Cigarette and Tobacco Products Licensing Act of 2003 (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 license from the Board of Equalization (BOE) in order to engage in the sale 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 license has a fee of one thousand dollars ($1,000) for each location at which cigarettes or tobacco products are located or will be sold. A distributor or wholesaler license is valid for a calendar year and is not assignable or transferable. Each license must be renewed annually, and the fee is $1,000 for each license renewed.
You may register for a permit, 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's or wholesaler's license under this Act?
Distributors and wholesalers of cigarettes or tobacco products must:
- Maintain complete and legible cigarette and tobacco product purchase records for four (4) years and keep records (such as invoices and receipts) on file at the location identified on your license for a least one year after the date of purchase.
- 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 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.
- The date the cigarette or tobacco products are sold.
- 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 excise taxes due to the BOE by the distributor on the sale of cigarettes and tobacco products.
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 product taxes are included in the total amount of this invoice."
- The amount of excise 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's or wholesaler's license. If you are a new distributor or wholesaler you may need to obtain a seller's permit from the BOE's Sales and Use Tax Department. If you are a distributor or wholesaler that sells directly to consumers you will also need to obtain a retailer's license in addition to a distributor's or wholesaler's license. For more information, call the Customer Service Center at 1-800-400-7115.
Enforcement and Penalties
- BOE staff and law enforcement agency employees may inspect your location and seize any undocumented cigarettes or tobacco products, including cigarettes without tax stamps or with counterfeit tax stamps. These inspectors must identify themselves and present identifying credentials.
- 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), or imprisonment not to exceed one year in a county jail, or both fine and imprisonment.
- As a distributor or wholesaler, it is not legal for you to purchase cigarettes from a manufacturer or any other person who is not licensed pursuant to this Act, or whose license has been suspended or revoked. Also, you may not sell cigarettes or tobacco products to a distributor, wholesaler, retailer, or any other person who is not licensed with the BOE, or whose license has been suspended or revoked.
Sales, Importation, and Notification Requirements
This Act also adds section 30165.1 to the Revenue and Taxation Code. It requires 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 that 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 product 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 Attorney General posts the directory on the Internet at http://ag.ca.gov/tobacco.
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 e-mail, cigarette and tobacco product distributors must provide an e-mail address to the Attorney General and update it as needed. You may do this by sending an e-mail to email@example.com. You will receive an e-mail acknowledging that the Attorney General has received and recorded your e-mail 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 Act. 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.
If a criminal citation is issued, it must first be processed through the court system. Depending on the violation(s) cited, the court may impose fines, jail time or both. Once the criminal process is complete, the BOE will receive any citation that is upheld by the court. The BOE may impose additional civil penalties.
A civil appeal process is available to the licensee if additional penalties are imposed. Additional information on the California Cigarette and Tobacco Products Licensing Act - Citation Appeals Process is available at the following link: http://www.boe.ca.gov/invest/citation.htm
For additional information on penalties for noncompliance and enforcement provisions under this Act, visit the Investigations Division http://www.boe.ca.gov/invest/investcont.htm 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, (see Revenue and Taxation Code Section 30165.1) (Form BOE-443).
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 Act of 2003
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 and select the Special Taxes and Fees option.
Staff is available to help you weekdays from 8:00 a.m. to 5:00 p.m., except State holidays, or you may write to:
Board of Equalization
Special Taxes and Fees
P.O. Box 948279
Sacramento, California 94279-0088