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California gets serious about smoking prevention

  • Nov 10, 2016 | Gail Cole

 California's cigarette and tobacco taxes to increase significantly.

The state of California is getting serious about smoking prevention. As of June 9, 2016, the smoking age is no longer 18 but 21. Beginning January 1, 2017, e-cigarettes, e-liquid, vaping tanks and related vaping devices are subject to state excise taxes under the Cigarette Tobacco Products Tax Law. And due to voters’ overwhelming approval of Proposition 56 on November 8, those tax rates will soon increase.

California currently has relatively low taxes on cigarettes and tobacco products, at 87 cents per pack. The rate will be well above the state average of $1.65 per pack once the tax is increased by $2.00, to $2.87 per pack (with similar rate increases for other tobacco products). Most of the revenue generated by the additional tax — a projected $1 billion to $1.4 billion in 2017-18 — will fund health care for low income Californians.

In addition to helping cover tobacco-related healthcare costs, proponents say the rate increase will help reduce and prevent youth smoking. According to John Schachter of the Campaign for Tobacco-Free Kids, “Every 10 percent increase in the price of cigarettes brings about a 7 percent decrease in use by youth and a 4 percent decrease overall.”

Yet opponents of the rate increase have called it a “tax hike grab” that devotes too much money to overhead and bureaucracy and not enough to smoking prevention. Concerns that the tax increase could encourage the black market have also been raised.

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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.