California Cigarette & Tobacco Products Licensing Act of 2003 - Retailer License
Who is required to obtain and maintain a Retailer's License?
In accordance with the California Cigarette and Tobacco Products Licensing Act of 2003 (Act), every retailer who sells or will sell cigarettes or tobacco products in California is required to obtain a retailer's license from the Board of Equalization (BOE) and renew it annually. This licensing requirement is in addition to other permits and licenses that may be required depending on your business operations. A retailer's license is required before you begin making sales of cigarettes and tobacco products in California.
"Retailer" means a person who sells cigarettes or tobacco products directly to the public from a California retail location, including vending machines.
Will I need to apply for any other permits?
Depending on your business operations, you may be required to obtain more than just a retailer's license. If you are a new retailer you may need to obtain a seller's permit from the BOE's Sales and Use Tax Department. Retailers operating as distributors or wholesalers may also need to obtain cigarette/tobacco products distributor or wholesaler licenses under the Act from the Special Taxes and Fees. For more information, call Special Taxes and Fees at 1-800-400-7115.
What are the requirements to obtain and maintain a retailer's license?
Every retailer currently selling cigarettes or tobacco products must apply for and obtain a cigarette and tobacco products retailer's license. All new applications must be submitted with a one-time license fee of one hundred dollars ($100) for each retail location selling cigarettes or tobacco products. Each retail location selling cigarettes or tobacco products must have a separate license. A license is valid for a 12-month period, is not assignable or transferable, and must be renewed annually. There is no additional cost for this renewal. However, if you fail to renew your license timely and allow your license to expire, you will be required to pay a reinstatement fee of $100.00 as a precondition for reinstatement. Please remember that you may not sell cigarette and/or tobacco products without a valid Cigarette and Tobacco Products Retail License.
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 retailer's license under this Act?
As a retailer of cigarettes or tobacco products you must:
- Conspicuously display the license at each retail location in a manner visible to the public.
- Keep complete and legible purchase invoices for cigarettes and tobacco products for four (4) years. See specific invoice requirements below.
- Keep these invoices at the location indicated on your license for the first year after purchase.
- Allow BOE staff or law enforcement agencies to review your invoices upon request.
The law also adds recordkeeping requirements and other provisions related to your purchase of cigarettes and tobacco products. Your cigarette and tobacco product purchase invoices must meet certain legal requirements.
Each invoice must be legible, readable, and include:
- The wholesaler or distributor's name, address, telephone number, and their California Cigarette and Tobacco Products Wholesaler or Distributor's license number. (It is not legal to buy cigarettes or tobacco products from a person who does not have a license.)
- Your name, address, and your California Cigarette and Tobacco Products Retailer's License number.
- An itemized list of the cigarette or tobacco products you purchased. 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 date cigarette or tobacco products are sold.
- 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
Retailers should also be aware that it is illegal to sell cigarettes and roll-your-own products that are not listed on the Attorney General's California Tobacco Directory. Please remember to refer to the California Tobacco Directory for a list of manufacturers and brand families that are certified as being in compliance with California law. The Attorney General posts the directory on the Internet at http://ag.ca.gov/tobacco/directory.php.
Violations of the law are subject to civil and criminal penalties, and products not listed on the directory in a retailer's possession can be seized and forfeited to the State.
You must maintain accurate and complete records, including purchase invoices. Failure to do so 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.
As a retailer, it is not legal for you to purchase cigarettes from a manufacturer, importer, distributor, wholesaler, or any other person who is not licensed pursuant to this Act, or whose license has been suspended or revoked. Doing so could result in suspension or revocation of your license, fines, and/or imprisonment. If a retailer purchases tobacco products from an unlicensed person located out of state, the retailer then becomes responsible for the excise tax and must register with the BOE as a distributor (see information above regarding the need to have more than one business 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 of 2003 - Citation Appeals Process is available at the following link: http://www.boe.ca.gov/invest/citation.htm. Click here for Frequently Asked Questions regarding the appeal 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.
Other informative links
- Publication 78, Sales of Cigarettes and Tobacco Products in California - License Requirement for Retailers
- Frequently Asked Questions - Retailers
- Cigarette and Tobacco Product Retailers: Important New License and Recordkeeping Requirements
- Assembly Bill 71
- Cigarette and Tobacco Products Licensing Act of 2003
- Attorney General's California Tobacco Directory
If you have additional questions about how the California Cigarette and Tobacco Products Licensing Act of 2003 applies to your business, you may also 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. (Pacific time), except State holidays, or you may write to the Board of Equalization, Special Taxes and Fees, P.O. Box 948279, Sacramento, California, 94279-0088.