Cigarette and Tobacco Products Retailer
California Electronic Cigarette Excise Tax

Introduction

Since July 1, 2022, retailers of electronic cigarettes (in-state or out-of-state) have been required to collect the California Electronic Cigarette Excise Tax (CECET) from the purchaser at the time of sale. The CECET is calculated at the rate of 12.5 percent (12.50%) of the retail selling price of electronic cigarettes containing or sold with nicotine and is collected in addition to the sales and use tax.

A retailer of electronic cigarettes containing or sold with nicotine must:

• Obtain a CECET permit (account),
• Include the CECET amount in the price marked on any sign or display,
• Collect the CECET from the purchaser,
• Provide the purchaser with a receipt or other document that separately states the CECET and the amount they paid on each electronic cigarette retail sale,
• File a CECET return electronically, and
• Pay the excise tax to us.

Senate Bill (SB) 395 (Stats. 2021, ch. 489) enacted the Healthy Outcomes and Prevention Education (HOPE) Act, which imposes the CECET.

In addition to the HOPE Act, we administer other cigarette and tobacco products laws affecting retailers of electronic cigarettes containing or sold with nicotine. Retailers of electronic cigarettes containing or sold with nicotine also have responsibilities under the Cigarette and Tobacco Products Licensing Act of 2003.

The following are general definitions for purposes of the HOPE Act:

An electronic cigarette is:

• A device or delivery system sold in combination with any liquid substance containing nicotine that can be used to deliver aerosolized or vaporized nicotine to a person. Examples include, but are not limited to, any of the following items sold with any nicotine liquid or nicotine substance that are packaged together as one unit or sold for a single price: eCigarettes, eCigars, ePipes, vape pens, or eHookahs.
• 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 are packaged together as one unit or sold for a single price: atomizers, vaping tanks, 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 aerosolized or vaporized nicotine to a person. Some examples include, but are not limited to, eLiquids or eJuices containing nicotine.

An electronic cigarette does not include:

• A device or delivery system sold individually or with a liquid or substance containing 0mg nicotine.
• 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.

How the revenue is used

Revenues collected, including interest and penalties, from the CECET are deposited into the California Electronic Cigarette Excise Tax Fund. The proceeds from the CECET, minus refunds, administration expenses, and collection expenses, are used to fund essential safety net services and provide grants to students from disadvantaged backgrounds pursuing an education in the health field to combat the long-term negative impact of tobacco products.

For detailed information on how the funds are used, visit Revenue and Taxation Code (RTC) section 31005.

Required permits, licenses, and accounts

Regardless of where a cigarette and tobacco products retailer is located, a CECET account is required for a retailer selling electronic cigarettes containing or sold with nicotine. In addition:

• A retailer physically located in California selling to consumers in California must have a seller’s permit, CECET account, and a cigarette and tobacco products retailer license (CRL) with us.
• A retailer located outside California selling to consumers in California is considered a delivery seller (RTC section 30101.7). Regardless if the out-of-state delivery seller is engaged in business in California (RTC section 30108), the delivery seller must have a CECET account, a cigarette and tobacco products distributor license (CDL), a tobacco products distributor tax account, and a Prevent All Cigarette Trafficking (PACT) Act account with us, but is not required to have a CRL. The delivery seller may also be required to have a seller’s permit or certificate of registration to report the use tax to us.

Delivery sellers should read the information contained in the PACT Act, Delivery Seller, Common Carrier, and Consumer guide.

Online registration

To register with us online for a CECET account, cigarette and tobacco products license, PACT Act account (if applicable), seller’s permit, any other permits, licenses, or accounts, please visit Online Services, which has a list of information you will need to complete your registration.

Multiple locations

If you have multiple CRL locations that sell electronic cigarettes containing or sold with nicotine, only one CECET account is issued for reporting the CECET sold from all your CRL locations. The total sales of the electronic cigarettes containing or sold with nicotine from all CRL locations must be reported on one CECET return. For example, if you have five CRL locations selling electronic cigarettes containing or sold with nicotine, you will report all five locations on your one CECET account.

Filings and payments

Taxpayer online service portal

You must file all applicable cigarette and tobacco products tax returns, reports, and schedules even if you made no transactions or deliveries during the reporting period.

You are required to file your tax forms online with us through our Online Services. Log in using your username and password and select your account, then select the File and/or View a Return/Report link under I Want To for the filing period you wish to file.

If you do not have a username and password, select the Sign Up Now link under the Create a Username heading from Online Services.

Filing a late return or late payment may result in a late penalty and interest assessment.

For guidance on filing your return, please visit How to File a California Electronic Cigarette Excise Tax (CECET) Return.

Filing deadlines

Due Date: Unless otherwise specified, all tax returns and reports must be filed, and payments must be made on or before the last day of the calendar month following the reporting period.

• For example: a return or report for the quarterly reporting period ending March 2026 would be due on or before April 30, 2026, along with the total payment amount due (RTC section 31002).

Online filing resources

Listed below are useful online filing resources:

• Cigarette and Tobacco Products Online Filing
• Online Filing Templates
• Online Filing Instructions for Cigarette and Tobacco Products Tax
• Video Tutorials

Payments

Taxpayers with an estimated average monthly tax liability of $20,000 or more are required to pay amounts due by EFT. We will notify you in writing if you are required to pay your taxes electronically.

You can make Electronic Funds Transfer (EFT) or card payments through Online Services. Log in using your username and password and select your account. Select the More link under the I Want To section. Then select the Make a Payment link and follow the prompts.

• Online Services Make a Payment
• Trouble Paying Taxes?

Retailer reimbursement

A one percent (1%) reimbursement of the CECET collected, for any costs associated with collecting the tax, is automatically calculated and issued when you file your CECET return.

The CECET is not subject to sales and use tax

The CECET is not subject to sales and use tax. Sales and use tax only applies to the total selling price of the electronic cigarette product, excluding the CECET. Below are two examples.

Notes

1. Device and eLiquid containing nicotine packaged as one unit or sold for a single price.
2. Eight percent (8%) sales tax rate is used for demonstration only.

CECET applies to handling charges

The CECET applies to handling charges. Handling charges are considered part of the sales price of electronic cigarettes for the purposes of the CECET and must be included in the measure of the CECET. If a transaction includes a sale of electronic cigarettes that is subject to the CECET and a delivery device that is not subject to the CECET and the handling charge relates to both items sold, the handling charge should be prorated. Below are two examples.

Notes

1. Eight percent (8%) sales tax rate is used for demonstration only.

Revocation or suspension of CECET permit

If we suspend or revoke your seller’s permit, CRL, or CDL, we may also suspend or revoke your CECET permit. We will notify you in writing that action against your CECET permit is being considered. You will have 10 days to explain why your CECET permit should not be revoked.

We will provide you with a 10-day written notice requesting you to appear for a hearing at a specified CDTFA office location, date, and time to address any citation of the permit. If you clear the cause of the citation prior to the hearing date, the hearing will no longer be necessary, and your permit will not be revoked. If you do not clear the cause of the citation on or before the date and time specified and do not appear for the hearing, your CECET permit will be revoked.

Reasons for revocations

• Your seller’s permit has been suspended or revoked.
• Your CRL or CDL has been suspended or revoked.
• You did not follow a provision of the applicable law or regulation for the CECET program.

Reinstatement fee for a revoked CECET permit

To reinstate a revoked CECET permit, you must:

• Clear the cause of the revocation.
• Comply with the HOPE Act and its regulations.
• Have an active seller’s permit and CRL or CDL.
• Pay the reinstatement fee of $100.