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California to tax e-cigarettes, January 2017

  • Oct 7, 2016 | Gail Cole

 California to treat e-cigarettes like other tobacco products for tax purposes.

Updated 1.22.2017

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.

Rate increase

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.

Simplify tax compliance in all states with an automated solution. Learn more.

photo credit: Exile on Ontario St No Vaping Sign via photopin (license)

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.