Article 1. Tax On Distributors of California Revenue And Taxation Code >> Division 2. >> Part 13. >> Chapter 2. >> Article 1.

Every distributor shall pay a tax upon his or her distributions of cigarettes at the rate of one and one-half mills ($0.0015) for the distribution after 4:00 a.m. on July 1, 1959, of each cigarette until 12:01 a.m. on August 1, 1967, at the rate of three and one-half mills ($0.0035) for the distribution of each cigarette on and after August 1, 1967, until 12:01 a.m. on October 1, 1967, at the rate of five mills ($0.005) on and after 12:01 a.m. on October 1, 1967, until 12:01 a.m. on January 1, 1994, and at the rate of six mills ($0.006) on and after 12:01 a.m. on January 1, 1994.

(a) It is the intent of the Legislature in enacting this section to facilitate the collection of all applicable state surtaxes, sales or use taxes, and escrow and other payment obligations on cigarettes sold to residents of the state and to ensure compliance with the Prevent All Cigarette Trafficking Act of 2009 (PACT Act; Public Law 111-154).
  (b) Except as provided in subdivision (d), no person may engage in a retail sale of cigarettes in California unless the sale is a vendor-assisted, face-to-face sale.
  (c) For the purposes of this section, the following definitions shall apply:
  (1) "Consumer" means a person who purchases cigarettes or tobacco products. "Consumer" does not include any person licensed under this part or under Division 8.6 (commencing with Section 22970) of the Business and Professions Code and lawfully operating as a manufacturer, distributor, wholesaler, or retailer of cigarettes or tobacco products.
  (2) "Delivery sale" means sale of cigarettes or tobacco products into and in this state in either of the following cases:
  (A) The consumer submits the order for the sale by means of a telephone or other method of voice transmission, the mail, or the Internet or other online service, or the seller is otherwise not in the physical presence of the consumer when the request for purchase or order is made.
  (B) The cigarettes or tobacco products are delivered to the consumer by common carrier, private delivery service, or other method of remote delivery, or the seller is not in the physical presence of the consumer when the consumer obtains possession of the cigarettes or tobacco products.
  (3) "Delivery seller" means a person who makes a delivery sale.
  (4) "Face-to-face sale" means a sale in which the purchaser is in the physical presence of the seller or the seller's employee or agent at the time of the sale. A face-to-face sale does not include a delivery sale.
  (5) "Indian country" shall have the same meaning as provided in Section 1151 of Title 18 of the United States Code, and includes any other land held by the United States in trust or restricted status for one or more Indian tribes.
  (6) "Interstate commerce" means commerce between a state and any place outside the state, commerce between a state and Indian country in the state, or commerce between points in the same state but through a place outside of the state or through any Indian country.
  (7) "Tobacco products" shall have the same meaning as otherwise defined under this part with the exception of cigars.
  (d) A person may engage in delivery sale of cigarettes or tobacco products to a person in California provided that all of the following conditions are met:
  (1) The delivery seller has fully complied with all of the requirements of Chapter 10A (commencing with Section 375) of Title 15 of the United States Code, otherwise known as the Jenkins Act.
  (2) The delivery seller obtains and maintains any applicable license under this part and under Division 8.6 (commencing with Section 22970) of the Business and Professions Code, as if the delivery sales occurred entirely within this state.
  (3) The delivery seller complies with any applicable state law that imposes escrow or other payment obligations on tobacco product manufacturers, including, but not limited to, Sections 104555 to 104557, inclusive, of the Health and Safety Code.
  (4) The Attorney General may require the delivery seller to report to the Attorney General its delivery sales of cigarettes and tobacco products to California consumers in the form and manner specified by the Attorney General.
  (e) Any violation of this section by any person is a misdemeanor. Each offense shall be punishable by a fine not to exceed five thousand dollars ($5,000), or imprisonment not to exceed one year in a county jail, or both the fine and imprisonment. The amount of any fines assessed shall be deposited in the Cigarette and Tobacco Products Compliance Fund.
  (f) The State Board of Equalization may provide information relative to a seller's failure or attempt to comply with the PACT Act and the Jenkins Act to the Attorney General.
  (g) The Attorney General or a city attorney, county counsel, or district attorney may bring a civil action to enforce this section against a person that violates this section and, in addition to any other remedy provided by law, the court shall assess a civil penalty in accordance with the following schedule:
  (1) A civil penalty of not less than one thousand dollars ($1,000) and not more than two thousand dollars ($2,000) for the first violation.
  (2) A civil penalty of not less than two thousand five hundred dollars ($2,500) and not more than three thousand five hundred dollars ($3,500) for the second violation within a five-year period.
  (3) A civil penalty of not less than four thousand dollars ($4,000) and not more than five thousand dollars ($5,000) for the third violation within a five-year period.
  (4) A civil penalty of not less than five thousand five hundred dollars ($5,500) and not more than six thousand five hundred dollars ($6,500) for a fourth violation within a five-year period.
  (5) A civil penalty of up to ten thousand dollars ($10,000) for a fifth or subsequent violation within a five-year period.
  (h) This section does not prohibit the lawful sale of a tobacco product that occurs by means of a vending machine.
  (i) Nothing in this section shall relieve the seller of cigarettes from any other applicable requirement of state law relating to the sale or distribution of cigarettes or tobacco products in this state.
  (j) The board shall enforce the licensing and tax provisions of this section. Other provisions of this section shall be enforced by the Attorney General.
  (k) The provisions of this section are severable. If any provision of this section or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.

(a) The taxes imposed by this part shall not apply to the sale of cigarettes or tobacco products to either of the following:
  (1) United States Army, Air Force, Navy, Marine Corps or Coast Guard exchanges and commissaries and Navy or Coast Guard ships' stores.
  (2) The United States Veterans' Administration.
  (b) This section shall remain in effect only until the first day of the first calendar month commencing more than 60 days after existing federal law is amended by Congress to permit state taxation of sales of cigarettes by or through federal military installations.

The taxes imposed by this part shall not apply to the distribution of cigarettes or tobacco products that are non-tax-paid under Chapter 52 of the Internal Revenue Act of 1954 as amended, and the cigarettes or tobacco products are under internal revenue bond or customs control.

The taxes imposed by this part shall not apply to the sale of cigarettes or tobacco products by the manufacturer to a licensed distributor.

(a) The tax and surcharge imposed by this part shall not apply to the sale or transfer of untaxed cigarettes or tobacco products to a law enforcement agency for use in a criminal investigation when that sale or transfer is authorized by the board.
  (b) A law enforcement agency authorized by the board to receive or purchase cigarettes or tobacco products as provided in subdivision (a) shall not be required to apply for, or obtain, a license as a distributor pursuant to Section 30140.
  (c) A law enforcement agency making distributions of cigarettes and tobacco products received or purchased under subdivision (a) is not required to collect or remit the tax or surcharge imposed by this part with respect to those authorized distributions.

The taxes imposed by this part shall not apply to the sale of cigarettes or tobacco products by a distributor to a common carrier engaged in interstate or foreign passenger service or to a person authorized to sell cigarettes or tobacco products on the facilities of the carrier. Whenever cigarettes or tobacco products are sold by distributors to common carriers engaged in interstate or foreign passenger service for use or sale on facilities of the carriers, or to persons authorized to sell cigarettes or tobacco products on those facilities, the tax imposed by Sections 30101, 30123, and 30131.2 shall not be levied with respect to the sales of the cigarettes or tobacco products by the distributors, but a tax is hereby levied upon the carriers or upon the persons authorized to sell cigarettes or tobacco products on the facilities of the carriers, as the case may be, for the privilege of making sales in California at the same rate as set forth in Sections 30101, 30123, and 30131.2. Those common carriers and authorized persons shall pay the tax imposed by this section and file reports with the board, as provided in Section 30186.

The taxes imposed by this part shall not apply to the sale of cigarettes or tobacco products by the original importer to a licensed distributor if the cigarettes or tobacco products are manufactured outside the United States.

The taxes imposed by this part shall not apply to the sale or gift of federally tax-free cigarettes or tobacco products when the cigarettes or tobacco products are delivered directly from the manufacturer under Internal Revenue bond to a veterans' home of the State of California or a hospital or domiciliary facility of the United States Veterans' Administration for gratuitous issue to veterans receiving hospitalization or domiciliary care. The tax shall not be imposed with respect to the use or consumption of such cigarettes or tobacco products by the institution or by the veteran patients or domiciliaries.

The taxes imposed by this part shall not apply to the use or consumption of untaxed cigarettes transported or brought into this state in a single lot or shipment of not more than 400 cigarettes by an individual for his own use or consumption, or of not more than 400 untaxed cigarettes obtained at one time from any of the instrumentalities listed in Section 30102.

The taxes resulting from a distribution of cigarettes or tobacco products within the meaning of subdivision (b) of Section 30008 shall be paid by the user or consumer.

(a) Every distributor engaged in business in this state and selling or accepting orders for cigarettes or tobacco products with respect to the sale of which the tax imposed by Sections 30101, 30123, and 30131.2 is inapplicable shall, at the time of making the sale or accepting the order or, if the purchaser is not then obligated to pay the tax with respect to his or her distribution of the cigarettes or tobacco products, at the time the purchaser becomes so obligated, collect the tax from the purchaser, if the purchaser is other than a licensed distributor, and shall give to the purchaser a receipt therefor in the manner and form prescribed by the board.
  (b) Every person engaged in business in this state and making gifts of untaxed cigarettes or tobacco products as samples with respect to which the tax imposed by Sections 30101, 30123, and 30131.2 is inapplicable shall, at the time of making the gift or, if the donee is not then obligated to pay the tax with respect to his or her distribution of the cigarettes or tobacco products, at the time the donee becomes so obligated, collect the tax from the donee, if the donee is other than a licensed distributor, and shall give the donee a receipt therefor in the manner and form prescribed by the board. This section shall not apply to those distributions of cigarettes or tobacco products which are exempt from tax under Section 30105.5.
  (c) "Engaged in business in the state" means and includes any of the following:
  (1) Maintaining, occupying, or using, permanently or temporarily, directly or indirectly, or through a subsidiary, or agent, by whatever name called, an office, place of distribution, sales or sample room or place, warehouse or storage place, or other place of business.
  (2) Having any representative, agent, salesperson, canvasser or solicitor operating in this state under the authority of the distributor or its subsidiary for the purpose of selling, delivering, or the taking of orders for cigarettes or tobacco products.
  (d) The taxes required to be collected by this section constitute debts owed by the distributor, or other person required to collect the taxes, to the state.

Unless the contrary is established, it shall be presumed that all cigarettes or tobacco products acquired by a distributor are untaxed cigarettes or tobacco products, and that all cigarettes or tobacco products manufactured in this state or transported to this state, and no longer in the possession of the distributor, have been distributed.

Any claim for exemption from tax under this part shall be made to the board in such manner as the board shall prescribe.

The taxes imposed by this part are in lieu of all other state, county, municipal, or district taxes on the privilege of distributing cigarettes or tobacco products. This section does not prohibit the application of Part 1 (commencing with Section 6001), Part 1.5 (commencing with Section 7200), Part 1.6 (commencing with Section 7251), or Article 2 (commencing with Section 37021) of Part 17 to the sale, storage, use or other consumption of cigarettes or tobacco products.