Tax Guide for Cigarettes and Tobacco Products
Distributor

The cigarette and tobacco products tax is paid by a distributor upon the distribution of cigarettes and tobacco products in California. A distributor may not be a wholesaler. A wholesaler may not be a distributor. A distribution includes the sale, use or consumption of untaxed cigarettes or untaxed tobacco products in California, and the placing of untaxed cigarettes or untaxed tobacco products into a vending machine or retail stock in California (Revenue and Taxation Code section 30008).

Cigarette Distributor

A cigarette distributor is a person who purchases untaxed (unstamped) cigarettes and makes the distribution of cigarettes in California. A cigarette distributor may not hold a wholesaler's license. In general, distributors purchase cigarettes before any California cigarette tax is due, and then sell stamped cigarettes to wholesalers, other distributors, and retailers. Distributors pay the taxes by purchasing cigarette tax stamps from CDTFA. A cigarette distributor is required to affix the California cigarette tax stamp to each package of cigarettes prior to distribution to indicate that taxes have been paid. Once the cigarette packs are stamped, distributors can sell the stamped cigarettes to wholesalers, retailers, and other distributors. Anyone who distributes cigarettes in California must register with us as a cigarette distributor.

Tobacco Products Distributor

A tobacco products distributor is a person who engages in the distribution of tobacco products in California. A tobacco products distributor may not hold a wholesaler's license. In general, distributors purchase tobacco products before any California tobacco products tax is due and then pay the tax when the tobacco products are sold or distributed. A tobacco products distributor is required to calculate the tobacco products tax due based on the wholesale cost (Regulation 4076) of the tobacco products distributed and remit the total amount owed each month with their tax return. Anyone who distributes tobacco products in California must register with us as a tobacco products distributor and sell only to distributors, wholesalers, or retailers with a valid CDTFA cigarette and tobacco products license.

Out-of-State Tobacco Products Distributor

For detailed information about tobacco products sales by an out-of-state licensed distributor to an in-state licensed distributor, see the Industry Topics section, under the Distributors heading.

Responsibilities

Distributors of cigarettes or tobacco products must:

• Obtain a Seller's Permit.
• Obtain and maintain a valid California Cigarette and Tobacco Products Distributor's License.
• Maintain complete and legible cigarette and tobacco products purchase and sales records for four years.
• Keep purchase and sales records at each licensed location for a least one year after the date of purchase or sale.
• Allow our staff or law enforcement officers to review your sales and purchase records upon request.
• Purchase and sell only cigarettes and RYO tobacco authorized for sale in California as listed in the Office of the Attorney General's California Tobacco Directory.
  Please note: As a distributor, it is illegal for you to sell or be in possession of cigarettes (including RYO tobacco) that are not in compliance with the MSA according to R&TC, section 30165.1, unless the product is solely for out-of-state sales.
• Sell to distributors, wholesalers, or retailers with a valid CDTFA cigarette and tobacco products license. See Verify a License in the Resources section for information on how to verify a license or check if a license is currently suspended.
  Please note: Distributors may sell to out-of-state customers who are not licensed with us.
• Make sure that sales invoices meet all legal requirements. Each sales invoice must be legible and include the following information:
  • Your name, address, telephone number, and your distributor's license number.
  • The name, address, and license number of the business purchasing the cigarettes or tobacco products. You may not legally sell cigarettes or tobacco products to an unlicensed buyer.
  • The date you sold the cigarettes or tobacco products.
  • An itemized list of the cigarettes or tobacco products sold. 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 RYO), flavor, packaging (such as pouches, tins, or boxes), quantity sold, and sales price.
  • The amount of California cigarette and tobacco products taxes due to us 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:
    • A statement that reads: “All California cigarette and tobacco products taxes are included in the total amount of this invoice.”
    • The amount of cigarette and tobacco products taxes due to us by the distributor on the distribution of cigarettes and tobacco products.
• File tax returns and reports. See Filings, Payments, and Account Maintenance in the Getting Started section for more information.

Notes

1. These requirements do not apply to tobacco products that are not subject to the tobacco products tax. For example, vape liquids that do not contain any nicotine are not subject to these requirements; however, they are subject to retail licensing.

Cigarette Tax Stamps

Cigarettes are subject to excise taxes. Cigarette distributors pay the excise taxes to the State of California by purchasing cigarette tax stamps from us. Distributors must affix a stamp to each package of cigarettes prior to distribution to identify the package as excise tax paid.

Distributors receive a purchase discount of 0.85 percent, which is capped at the first $1.00 in denominated value (the denomination number refers to the number of cigarettes in the package) to help offset the costs of applying the stamps. For example, distributors are allowed a maximum discount of $255 on each roll of 30,000 stamps they affix to packs of cigarettes (0.0085 x [30,000 packages x $1.00 (maximum cap rate)] = $255.00). Distributors may include the cost of the stamps in the amounts they charge their customers.

To purchase cigarette tax stamps, you must register as a cigarette distributor with us. For information on how to become a cigarette distributor, please refer to publication 63, Cigarette Distributor Licensing and Tax Stamp Guide.

Additional Information

• Cigarette Tax Stamp Contract Information
• Order Cigarette Tax Stamps Online
• Cigarette Tax Stamp Desk 2024 Holiday Schedule

Tax Stamp Forms and Publications

• Publication 403, California's Counterfeit-Resistant Cigarette Tax Stamp
• Publication 63, Cigarette Distributor Licensing and Tax Stamp Guide
• CDTFA-413-ACTS, Cigarette Distributor's Report of Returned Stamps

Questions about Cigarette Tax Stamps? Contact Us

If you have questions regarding cigarette tax stamps, please contact our Stamp Desk by using the contact methods listed below. Stamp Desk representatives are available to assist Monday through Friday from 8:00 a.m. to 5:00 p.m. (Pacific time), except state holidays.

• Email
• Phone
  1-916-309-8200
• Fax
  1-916-327-6235
• Mail
  California Department of Tax and Fee Administration
  Cigarette Tax Stamp Program, MIC: 41
  P.O. Box 942879
  Sacramento, CA 94279-0041

Online Seminar

We offer an online seminar for cigarette and tobacco products distributors to help you better understand the state's requirements and your responsibilities as a distributor of cigarettes and tobacco products in California.

The information is presented in sections by topic so you can view the information at your own pace. We highly recommend you view all the topics provided to help you understand and comply with California's cigarette and tobacco products licensing and tax laws. The online seminar webpage also allows you to electronically submit your cigarette or tobacco products questions directly to us for a timely response.