California Electronic Cigarette Excise Tax Return

The California Department of Tax and Fee Administration (CDTFA) administers the California Electronic Cigarette Excise Tax (CECET) imposed by the Healthy Outcomes and Prevention Education (HOPE) Act (Revenue and Taxation Code section 31000, et seq.), enacted by Senate Bill 395 (Stats.2021, ch. 489).

Beginning July 1, 2022, retailers of electronic cigarettes containing or sold with nicotine (e-Cigarettes) are required to collect from the purchaser at the time of the retail sale a 12.5 percent CECET on the sales price of e-Cigarettes . The collection of the CECET is in addition to the sales and use tax. One percent reimbursement of the CECET will automatically be calculated on the return as reimbursement to the retailer for all costs associated with the collection of the CECET.

Filing Requirements

The California Electronic Cigarette Excise Tax Return (e-Cigarette Tax Return) must be filed electronically on or before the last day of the month following each calendar quarter. You must file a return for each reporting period even if you did not have any reportable activities during the reporting period.

Payment for the CECET amount due must be submitted by the due date of the return. A copy of the return should be retained on the licensed premises for verification by CDTFA auditors.

CDTFA may require the due date of the CECET payment and the filing of the e-Cigarette Tax Return for other than quarterly (RTC section 31002(d)(3)).

Penalty and Interest

The penalty for failure to file a return and/or failure to pay the CECET by the due date is 10 percent of the CECET amount due for the period. Interest on the CECET amount also applies to late payments at the modified adjusted rate per month or fraction of a month that the payment is late.

The following are general definitions for purposes of the CECET under the HOPE Act.

An electronic cigarette means any of the following:

• A device or delivery system sold in combination with any liquid substance containing nicotine that can be used to deliver nicotine in aerosolized or vaporized form to a person. Examples include, but are not limited to, any of the following items sold with any nicotine liquid or nicotine substance that is contained in the device or delivery system or is packaged together as one unit or sold for a single price: an eCigarette, eCigar, ePipe, vape pen, or eHookah.
• A component, part, or accessory of a device described above that is used during the operation of the device if sold in combination with a liquid substance containing nicotine. Examples include, but are not limited to, any of the following items sold with any nicotine liquid or nicotine substance that is packaged together as one unit or sold for a single price: atomizers, vaping tanks or mods, batteries, or chargers.
• A liquid or substance containing nicotine, whether sold separately or sold in combination with any device, that could be used to deliver nicotine in aerosolized or vaporized form to a person. Some examples include, but are not limited to, an eLiquid or eJuice containing nicotine.

An electronic cigarette does not include a product that has been approved by the United States Food and Drug Administration for sale as a tobacco cessation product or for other therapeutic purposes if that product is marketed and sold solely for that approved use.

Enter the total retail sales of electronic cigarettes, subject to CECET, for all locations. Do not include sales tax. Enter the total retail sales of electronic cigarettes containing or sold with nicotine that are subject to the CECET for this reporting period. Include sales from all retail locations. Sales tax should not be included.

Refer to the Definitions section above for general definitions of an electronic cigarette.

CECET rate. The excise tax rate for this reporting period (12.5%). (The system will automatically enter this rate.)

Total amount of CECET. (The system will automatically calculate this amount.)

CECET reimbursement rate. (The system will automatically enter this rate (1%).)

Less retailer reimbursement. The reimbursement amount for all costs of collecting the CECET. (The system will automatically calculate this amount.)

Total amount of CECET after retailer reimbursement. The total amount of excise tax due after deducting the reimbursement amount from the CECET amount. (The system will automatically calculate this amount.)

Total amount of CECET after retailer reimbursement. (The system will automatically calculate this amount.)

Excess CECET Collected. If you have collected more tax than what is due (excess tax) for this reporting period, enter the amount of excess excise tax collected in this field.

Total amount of CECET due. The total amount of CECET due for this reporting period. (The system will automatically calculate this amount.)

• Tax Guide for California Electronic Cigarette Excise Tax
• Online Return Filing Tutorial