California to tax e-cigarettes, January 2017
- Sales Tax News
- October 7, 2016 | Gail Cole
The definition of “tobacco products” is expanded beginning January 1, 2017. As a result, a number of new products will be subject to California excise taxes under the Cigarette and Tobacco Products Tax Law.
As of January 1, retailers that sell electronic cigarettes, vaping devices, and related products that don't already have a valid Cigarette and Tobacco Retailer’s License are required to obtain a California Cigarette and Tobacco Products Retailer’s License before making retail sales of these products. The new licensing policies applies to the following:
- Any product containing, made, or derived from nicotine that is intended for human consumption
- Any electronic smoking or vaping device that delivers nicotine or other vaporized liquids to the person inhaling from the device
- Any component, part, or accessory of a tobacco product, whether or not sold separately
Examples include e-cigarettes, e-liquid, and vaping tanks or mods. It can take up to 10 days to obtain a new license.
Beginning April 1, 2017, the state excise tax on cigarettes will increase by $2 per pack, and electronic cigarettes sold in combination with nicotine will be taxed as a tobacco product. Additional information is available on the California State Board of Equalization webpage, Cigarette and Tobacco Products and in this BOE news release.
A good time to quit
Smokers interested in quitting may find new motivation in the fact that U.S. FDA-approved “cessation products” are not taxable tobacco products.
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