Tax Guide for Grocery Stores
Getting Started

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If you own a business in California and you expect to make taxable sales, you must register with us for a seller's permit and file sales and use tax returns. You may be required to register for other licenses or accounts and file other returns and reports using our Online Services. Listed below are other tax and fee programs that may be applicable to grocery stores.

Cigarettes and Tobacco Products

As of December 21, 2022, cigarette and tobacco product retailers, including their employees or agents, are prohibited from selling, offering for sale, or possessing with the intent to sell menthol cigarettes, most flavored tobacco products, and tobacco product flavor enhancers. For more information regarding Assembly Bill (AB) 3218, Senate Bill (SB) 1230, AB 935, and SB 793, pertaining to the banning of flavored tobacco products, see Tax Guide for Cigarettes and Tobacco Products.

Cigarette and Tobacco Products Licensing

You must register with us for a Cigarette and Tobacco Products Retailer's License before you can purchase and sell cigarettes or tobacco products at retail. For retail licensing purposes, a tobacco product includes any product containing, made of, or derived from tobacco or nicotine that is intended for human consumption; any electronic devices that delivers nicotine or other vaporized liquids; or any component, part, or accessory of a tobacco product, whether or not sold separately. You must obtain this retailer's license in addition to your seller's permit. You must have a separate retailer's license for each location or vending machine from which retail sales of cigarettes or tobacco products are made. A retailer's license is valid for a 12-month period from the date of issuance, is not assignable or transferable, and must be renewed annually. You must pay a license fee at initial registration and annually at renewal for each retail location. The license fee will not be prorated. You can view cigarette and tobacco products license fees on our Tax Rates – Special Taxes and Fees webpage.

Prospective licensees should consult with their local health department before applying for a California Cigarette and Tobacco Products Retailer's License to determine if there is a local licensing requirement in their community and to learn how to comply with its requirements. In some cases, local licensing requirements may be more restrictive than state licensing requirements.

A retailer can only purchase and possess cigarettes with a valid California cigarette tax stamp affixed to each package and excise tax-paid tobacco products.

For more information on the cigarette and tobacco products tax and licensing program, refer to publication 78, Sales of Cigarettes and Tobacco Products in California, and our Tax Guide for Cigarette and Tobacco Products.

California Electronic Cigarette Excise Tax

Retailers of electronic cigarettes (eCigarettes) are required to collect the California Electronic Cigarette Excise Tax (CECET) at the rate of 12.5 percent (12.50%) of the retail selling price of the eCigarette containing or sold with nicotine from the purchaser at the time of the sale. The retailer must collect CECET in addition to the sales and use tax.

A retailer of eCigarettes containing or sold with nicotine must:

  • Have a CECET permit (account) with us,
  • Include the CECET amount in any price marketing on any sign or display,
  • Collect the CECET at the time of the sale from the purchaser at the rate of 12.5 percent (12.50%) of the retail selling price of eCigarettes containing or sold with nicotine at the time of sale,
  • Provide the purchaser with a receipt or other document that separately states the CECET and the amount they paid on each eCigarette retail sale,
  • File a CECET return electronically, and
  • Pay the CECET to us.

For more information, see our Tax Guide for California Electronic Cigarette Excise Tax.

Prepaid Mobile Telephony Services (MTS)

If you intend to sell prepaid wireless products and services to California consumers, you must register with us as a prepaid MTS seller. The prepaid MTS account is a separate account from your seller's permit.

For more information about your collection requirements as a seller of prepaid MTS, see our Tax Guide for Sellers of Prepaid Mobile Telephony Services (MTS) and Telecommunication Service Suppliers.

Registration

Online Registration—Register with us for your seller's permit and apply for any of the licenses, permits, or accounts that we administer, or add a business location to an existing account.

If you have already registered with us, you'll find these tools helpful in maintaining your account.

Filing and Payments

Notice of Business Change

Go to www.cdtfa.ca.gov and log in with your username and password to update your account information when you sell your business, close your business, or change your mailing address, email address, or telephone number. If you prefer, you may use the links below to obtain the forms to notify us of changes. It is important to notify us so we can ensure you receive timely information, email reminders to electronically file, and other important updates.