Distributor & Wholesaler License - California Cigarette & Tobacco Products Licensing Act of 2003
Please note: these requirements do not apply to any product containing, made, or derived from nicotine that is intended for human consumption; any electronic smoking or vaping device that delivers nicotine or other vaporized liquids; or any component, part, or accessory of a tobacco product, whether or not sold separately, as there are currently no cigarette and tobacco products licensing requirements for distributors, wholesalers, or importers of these types of products.
What 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 excise 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 excise 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.
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 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 cigarette and tobacco products 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 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. See our tax and fee rates page for the current license fee amount.
You may register for a distributor or wholesaler cigarette and tobacco 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 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 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 cigarettes 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 California excise 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 excise taxes due to the BOE: "All California cigarette and tobacco product 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 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 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's or wholesaler's cigarette and tobacco products license. For more information, call the Customer Service Center at 1-800-400-7115.
Enforcement and Penalties
- BOE staff and law enforcement are authorized to conduct inspections of businesses selling cigarette 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 cigarettes or tobacco products found, including cigarettes without tax stamps, with other state stamps, or with counterfeit or reused tax stamps, are subject to seizure.
- 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 their website.
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 their mailbox. 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 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 our Investigations webapge. You can also review the Frequently Asked Questions regarding the appeals process.
For additional information on penalties for noncompliance and enforcement provisions under this 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, (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
- 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 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
Special Taxes and Fees
P.O. Box 948279
Sacramento, California 94279-0088