Tobacco Products Manufacturer/Importer Return

The California Department of Tax and Fee Administration (CDTFA) administers the California Cigarette and Tobacco Products Tax Law. Per Regulation 4081, Sample Cigarettes and Tobacco Products, the distributions of untaxed tobacco products as samples is taxable and the manufacturer giving away such sample tobacco products must report the distribution and pay the tax due.

Filing Requirements

Every licensed tobacco products manufacturer or importer is required to electronically file a Tobacco Products Manufacturer/Importer Tax Return and supplemental schedule (if applicable) of all distributions of untaxed tobacco products as samples; and all nontaxable sales and deliveries of tobacco products in interstate or foreign commerce, or to a licensed distributor, common carrier engaged in interstate or foreign passenger service, U.S. military exchange or commissary, or the U.S. Veterans Administration. The return is due on or before the 25th day of each calendar month following the reporting period (Regulation 4027).

In California, the giving away of untaxed tobacco products as samples is a taxable distribution, and each package of sample tobacco products distributed needs to be clearly marked as a sample. The return should only include taxable distributions of sample tobacco products.

Details of nontaxable transactions must be reported on supplemental schedule CDTFA-501-MIT, Manufacturer/Importer Report of Tobacco Products Delivered or Shipped into California.  Refer to the Schedule Preparation section for more information.

A return must be filed for each reporting period even if there are no transactions to report or any tax due. Payment for the amount due must be submitted by the due date of the return. A copy of the return and schedules must be retained on the licensed premises for verification by CDTFA auditors.

Penalty and Interest

The penalty for filing a late return and/or late payment is ten percent of the amount due for the period. Interest also applies to late payments for each month or fraction of a month that the payment is late (Revenue and Taxation Code 30281).

Tobacco Products include, but are not limited to, a product containing, made, or derived from tobacco or nicotine that is intended for human consumption, whether smoked, heated, chewed, absorbed, dissolved, inhaled, snorted, sniffed, or ingested by any other means, including, but not limited to, cigars, little cigars, chewing tobacco, pipe tobacco, shisha, or snuff, but does not include cigarettes. Electronic cigarettes are considered a tobacco product. (Revenue and Taxation Code (R&TC) 30121 (b))

Electronic Cigarettes include any device or delivery system sold in combination with nicotine which can be used to deliver to a person, nicotine in aerosolized or vaporized form, including, but not limited to, e-cigarettes, e-cigars, e-pipes, vape pens, or e-hookahs. Electronic cigarettes include any component, part, or accessory of such a device that is used during the operation of the device when sold in combination with any liquid or substance containing nicotine. Electronic cigarettes also include any liquid or substance containing nicotine, whether sold separately or sold in combination with any device that could be used to deliver to a person, nicotine in aerosolized or vaporized form. (R&TC 30121 (c)).

Wholesale Cost means the cost of tobacco products to the distributor prior to any discounts or trade allowances (R&TC 30017).

For example, the wholesale cost of any manufactured tobacco product that is distributed in a taxable manner includes all manufacturing costs, the cost of raw materials, including waste materials not incorporated into the final product, the cost of labor, any direct and indirect overhead costs, and any Federal excise and/or U.S. Customs taxes paid.

In addition to the price paid for the tobacco product, the wholesale cost of any tobacco product that is imported into this state directly from outside the country shall include any Federal excise or U.S. Customs taxes paid.

Refer to Regulation 4076, Wholesale Cost of Tobacco Products, for additional information on wholesale cost.

Importer means any purchaser for resale in the United States of cigarettes or tobacco products manufactured outside of the United States for the purpose of making a first sale or distribution within the United States (R&TC 30019).

Tobacco Product Manufacturer is: (Regulation 4077)

• Any person, including any repacker or relabeler, who manufactures, fabricates, assembles, mixes, blends, combines, processes, or labels a finished tobacco product.
• An owner of a brand or formula for a tobacco product who contracts with another person to complete the fabrication and assembly of the product to the brand or formula owner's standard.
• A retailer who mixes, blends, or combines a tobacco product that is not suitable for human consumption, such as liquid nicotine, with other ingredients or components to make a tobacco product that is suitable for human consumption.

Distributor includes every person who makes a “distribution” of tobacco products, or who sells or accepts orders for tobacco products that are to be transported from outside California to a consumer within California (R&TC 30011).

Note: Tobacco products sales by an Out-of-State Licensed Distributor to an In-State Licensed Distributor is not a distribution. The sale of tobacco products by an out-of-state California-licensed tobacco products distributor to an in-state California-licensed tobacco products distributor is not considered a distribution of tobacco products in California by the out-of-state seller. Instead, the licensed distributor in California who purchases the tobacco products from out-of-state and who makes the distribution of tobacco products in California owes the applicable excise tax.

Initial Question

Did you have any sales of nontaxable tobacco products during this reporting period?

If you had any sales of nontaxable tobacco products during this reporting period, select Yes and refer to the File Attachment section below for more information.

If you did not have sales of nontaxable tobacco products for this reporting period, select No and click Next.

File Attachment

If you had any sales of nontaxable tobacco products during this reporting period, you are required to complete and upload schedule CDTFA-501-MIT, Manufacturer/Importer Report of Tobacco Products Delivered or Shipped into California.

List the nontaxable tobacco products sales on CDTFA-501-MIT schedule using the following exempt codes:

100 – Interstate and Foreign Commerce (Export out of California or country)

200 – Common Carrier engaged in Interstate and foreign passenger service

300 – U.S. Army, Air Force, Navy, Marine Corps, or Coast Guard exchanges and commissaries and Navy or Coast Guard Ships’ stores and/or sales to U.S. Department of Veterans Affairs

400 – Sales or transfer to law enforcement (requires prior authorization from CDTFA)

Note: If you are both, a Tobacco Manufacturer/Importer and a Tobacco Products Distributor, you are required to also list the nontaxable tobacco products sales on the CDTFA-501-MIT schedule to your Tobacco Products Distributor Tax Return.

To upload the file attachment, click the Add button.

On the Select a file to attach pop-up window:

1. Enter a description of the file in the Description field (for example: Account 123-456789, Period Jan. 2023).
2. Click the Choose File button and follow the prompts to select and upload the file.
3. Once you have completed all required information, click the Save button.

Click the Next button to proceed to the next screen.

For instructions on file preparation, including file type and formatting requirements, template Excel workbooks for creating Flat (FLT) files, sample files, and other useful information related to tobacco products online filing, please visit our website.

Total wholesale cost of nontaxable transactions reported on CDTFA-501-MIT. The total wholesale cost of nontaxable tobacco products sales as reported on schedule CDTFA-501-MIT, Manufacturer/Importer Report of Tobacco Products Delivered or Shipped into California. The system will automatically calculate this field.

Samples of snuff (including moist) and chewing tobacco. Enter the total wholesale costs, as defined, of snuff (including moist) and chewing tobacco samples that were distributed during this reporting period, that are subject to excise tax.

Samples of pipe tobacco. Enter the total wholesale costs, as defined, of pipe tobacco samples that were distributed during this reporting period, that are subject to excise tax.

Samples of cigars. Enter the total wholesale costs, as defined, of cigars samples that were distributed during this reporting period, that are subject to excise tax.

Samples of roll-your-own. Enter the total wholesale costs, as defined, of roll-your-own samples that were distributed during this reporting period, that are subject to excise tax.

Samples of nicotine and electronic cigarettes sold with nicotine. Enter the total wholesale costs, as defined, of nicotine and electronic cigarettes sold with nicotine samples that were distributed during this reporting period, that are subject to excise tax.

Other samples. Enter the total wholesale costs, as defined, of other tobacco product samples that were distributed during this reporting period, that are subject to excise tax.

Other tobacco product samples description. Enter a description of the other tobacco product samples reported on the Other samples line above.

Total distributions subject to tax. The system will automatically calculate this field.

Note:

1. This return should include taxable distributions of sample tobacco products. Sales of tobacco products by manufacturers and original importers to a licensed distributor must be reported on schedule CDTFA-501-MIT, Manufacturer/Importer Report of Tobacco Products Delivered or Shipped into California (R&TC 30103 and R&TC 30105).
2. All other taxable distributions of tobacco products should be reported by the licensed distributor, on their Tobacco Products Distributor Tax Return (R&TC 30008 and R&TC 30011).

• Tax Guide for Cigarettes and Tobacco Products
• Online Return Filing Tutorial
• Cigarette and Tobacco Products Online Filing