Retailer & Wholesaler

Retailer

A retailer is a person who sells cigarettes or tobacco products directly to the public from a California retail location. A retailer includes a person who operates vending machines from which cigarettes or tobacco products are sold in California (Business and Professions Code (BPC) section 22971(p)).

A retailer cannot purchase or be in possession of unstamped (untaxed) cigarettes or untaxed tobacco products unless the retailer also has the cigarette and tobacco products distributor's licenses and accounts for the location. For example, a retailer must hold a California Cigarette and Tobacco Products Distributor's License and tax account if the retailer purchases untaxed tobacco products from a seller located out-of-state that did not charge the excise tax. See our Distributor section.

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

A retailer of eCigarettes containing or sold with nicotine must:

• Be registered a CECET permit (account),
• Include the CECET amount in any price marketing on any sign or display,
• Collect the CECET 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 electronic cigarette retail sale,
• File a CECET return electronically, and
• Pay the tax to us.

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

Retail Location

A retail location means both of the following:

• Any building from which cigarettes or tobacco products are sold at retail.
• A vending machine.

Notes

1. A separate Cigarette and Tobacco Products Retailer's License is required for each vending machine. If you operate multiple vending machines at a single location, you will need a separate license for each vending machine.

A Tobacco Product Retailer May also be a Tobacco Product Manufacturer

A tobacco product manufacturer (Regulation 4077, Tobacco Product Manufacturer) is:

• 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 tobacco product 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.

A tobacco products retailer is not a tobacco product manufacturer solely because:

• A retailer packages liquid nicotine with other items as one unit.
• A retailer allows its customers to mix, blend, or combine liquid nicotine and other components after a sale has been made.
• A retailer packages finished tobacco products, such as cigars, together as one unit.
• A retailer mixes, blends, or combines finished tobacco products, such as pipe tobacco.

A tobacco products retailer who is a tobacco product manufacturer must also be licensed with us as a tobacco products distributor. A tobacco products retailer who is not licensed as a tobacco products manufacturer, importer, or distributor must purchase their tobacco products from a licensed tobacco products distributor or wholesaler.

For more information about tobacco products manufacturers, see our Manufacturer & Importer section.

Cigarette Wholesaler

A cigarette wholesaler is a person, other than a licensed cigarette distributor, who sells taxed (stamped) cigarettes, obtained from a licensed distributor or another licensed wholesaler, for resale at a specific California location. A cigarette wholesaler may not hold a distributor's license. An out-of-state person selling at an out-of-state location is not a wholesaler and may not be licensed as a cigarette wholesaler. Cigarette wholesalers cannot purchase or be in possession of unstamped (untaxed) cigarettes.

Tobacco Products Wholesaler

A tobacco products wholesaler is a person, other than a licensed tobacco products distributor, who sells tax-paid tobacco products for resale at a specific California location. A tobacco products wholesaler may not hold a distributor's license. An out-of-state person selling at an out-of-state location is not a wholesaler and may not be licensed as a tobacco products wholesaler. Tobacco products wholesalers cannot purchase or be in possession of untaxed tobacco products.

Responsibilities

As a retailer or wholesaler of cigarettes and tobacco products, you must:

• Obtain a Seller's Permit.
• Maintain a valid California Cigarette and Tobacco Products Retailer's or Wholesaler's License. See publication 78, Sales of Cigarettes and Tobacco Products in California – License Requirement for Retailers.
• Maintain a CECET permit (account) (if you are a retailer who sells electronic cigarettes containing or sold with nicotine). For more information, see the Tax Guide for California Electronic Cigarette Excise Tax.
• Conspicuously display your license at each retail location in a manner visible to the public (retailers only).
• Keep complete and legible purchase invoices (and sales invoices if you are a wholesaler) for cigarettes and tobacco products for four years.
• Keep purchase invoices (and sales invoices if you are a wholesaler) at each licensed location for at least one year after the date of the purchase or sale. Certain information must be listed on each purchase invoice. See below for Purchase Invoice Requirements. Wholesalers must include certain information on each sales invoice. See below for Sales Invoice Requirements for Wholesalers.
• Allow CDTFA staff or law enforcement officers to review your purchase invoices (and sales invoices if you are a wholesaler) upon request.
• Purchase and sell only those cigarettes and roll-your-own (RYO) tobacco authorized for sale in California as listed on the Office of the Attorney General's California Tobacco Directory.
• Purchase cigarettes and tobacco products only from California licensed distributors or wholesalers. You may not purchase cigarettes or tobacco products from any person who is not licensed under the Cigarette and Tobacco Products Licensing Act of 2003, or whose license has been suspended or revoked. You are responsible for verifying your suppliers have a valid cigarette and tobacco products license with us. To verify that you are purchasing from a licensed distributor or wholesaler with a valid license, go to our Resources section of this guide, under Verify a License. There is also a link to check if a license is currently suspended. Retailers may not purchase cigarettes or tobacco products from other retailers(Revenue and Taxation Code section 30478). Wholesalers may not purchase their products directly from an importer or manufacturer.
• Wholesalers may only sell cigarettes or tobacco products to wholesalers and retailers licensed under the Cigarette and Tobacco Products Licensing Act of 2003. Wholesalers may not sell to any person who is not licensed with us or whose license has been suspended or revoked. Retailers may only sell to consumers. Wholesalers are responsible for verifying their buyers have a valid cigarette and tobacco products license with us. To verify that you are selling to a licensed person with a valid license, go to the Resources section of this guide, under Verify a License. There is also a link to check if a license is currently suspended.
• Only purchase cigarettes affixed with valid California tax stamps and California tobacco products tax-paid products.
• File a monthly report (cigarette wholesalers only).
• File a quarterly CECET return (retailers who have CECET account only). For more information, see the Tax Guide for California Electronic Cigarette Excise Tax.

Notes

1. Does 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 the tobacco products tax; however, they are subject to retail licensing.

Purchase Invoice Requirements

The cigarette and tobacco products purchase invoices you receive from distributors and/or wholesalers must be legible and include the following information:

• The name, address, telephone number, and license number of the distributor or wholesaler from whom you purchased the cigarettes or tobacco products (it is illegal to buy cigarettes or tobacco products from a an unlicensed distributor or wholesaler);
• Your name, licensed location address, and cigarette and tobacco products retailer's or wholesaler's license number.
• An itemized list of the cigarettes or tobacco products purchased. 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 date you purchased the cigarettes or tobacco products; and
• The amount of California cigarette and tobacco products taxes due to us by the distributor on the sale of cigarettes and tobacco products listed on the invoice.
  • Please note: A licensed distributor who is also a licensed retailer or manufacturer may include this statement instead of providing the amount of cigarette and tobacco products taxes due to us: “All California cigarette and tobacco products taxes are included in the total amount of this invoice.”

These purchase invoice 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 the tobacco products tax; however, they are subject to retail licensing.

Sales Invoice Requirements for Wholesalers

Each sales invoice must be legible. Wholesalers must include the following information on each sales invoice:

• The name, address, telephone number, and license number of the wholesaler.
• The name, licensed location 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 retailer or purchase them from an unlicensed distributor or wholesaler.
• The date the cigarettes or tobacco products are sold.
• 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.

Please note: The above sales invoice 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 the tobacco products tax; however, they are subject to retail licensing.

Product Transfers — Retailers with Multiple Locations

Generally, the sale or transfer of cigarettes and tobacco products between retailers is not permitted. However, if a retailer owns more than one store and the retailer's licenses for the transferring and receiving retail locations are held by the same legal entity, that retailer may be allowed to transfer portions of their tax-paid (stamped) cigarettes or tobacco products from one retail location to another retail location belonging to the same legal entity so long as the retailer:

• Is the licensee that holds a license issued by us for each of the retail locations;
• Prepares, at the time each transfer occurs, a transfer log or similar document that contains all the information a transfer log must contain;
• Keeps the original transfer log or similar document for a period of four years from the date the retailer purchased the transferred inventory;
• Keeps copies of the transfer log or similar document and purchase invoices for the transferred inventory at both the transferring and receiving retail locations for at least one year from the date of transfer; and
• Provides copies of the transfer log or similar document and purchase invoices for the transferred inventory upon request at the time the inspection begins.

A transfer log created or provided after an inspection is not acceptable. Legible transfer logs and copies of purchase invoices must be kept at each of the retailer's locations involved in the transfer. A transfer log or similar document must include the following:

• The date of the transfer;
• The name, address, and retailer license number of the transferring retail location where the original purchase was made;
• The name, address, and retailer license number of the receiving retail location where the product was transferred;
• The name and license number of each supplier (distributor and/or wholesaler) that sold the transferred product to the retailer;
• A legible itemized list, separated by supplier, date of purchase, and purchase invoice number, of the transferred cigarettes or tobacco products that uses the same descriptions used on the original purchase invoices for the cigarettes or tobacco products; including packaging (e.g., 20 5-packs; 60-ct boxes; 30 ml bottle), tobacco flavor and/or style, nicotine strength, and quantity transferred.

These retailer's product transfer 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 a cigarette and tobacco retail license.

Regulation 4801, Records, provides more clarification on transfers.

Inspection Video

What to Know About a Cigarette and Tobacco Products Inspection – Do you sell cigarette and tobacco products? Do you know what to expect during a routine inspection? To help you get prepared and know what to expect, watch the What To Know About Your Cigarette and Tobacco Products Inspection video to learn the process.

In-Person Classes/Online Seminars

Retailers

We offer free instructor-led classes at our offices located throughout the state to help you better understand the state's requirements and your responsibilities as a retailer of cigarettes and tobacco products in California.

This information is also available as an online seminar, and allows you to submit questions electronically to us for a timely response.

Wholesalers

We offer an online seminar for cigarette and tobacco products wholesalers to help you better understand the state's requirements and your responsibilities as a wholesaler 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 the CDTFA for a timely response.