Cigarette and Tobacco Products Citations - Appeal Process
The Investigations Division of the California Department of Tax and Fee Administration (CDTFA) is authorized to issue citations for violations of the California Cigarette and Tobacco Products Licensing Act of 2003 (CTPLA) and the Cigarette and Tobacco Products Tax Law. Two types of citations may be issued: civil citations and criminal citations. The civil citation is processed by the CDTFA. The criminal citation is processed through the courts. Both types of citations are subject to civil penalties.
When a civil citation is issued, a copy of the citation is sent to the CDTFA Business Taxes and Fees Division (BTFD) for processing. The CTPLA licensee will receive a Warning Notice or Notice of Violation indicating the violations cited and assessment of civil penalties, if applicable. The licensee, with cause, has the right to appeal to the BTFD for the violations cited.
When a criminal citation is issued, the citation is sent to the court of jurisdiction for processing. The CTPLA licensee is required to appear in court. Depending on the violation(s) cited, the court may impose fines, jail time or both. Once the court proceeding is complete, the CDTFA will obtain the court's ruling. In addition to any criminal penalties levied by the court, the CDTFA may also impose civil penalties. The CTPLA licensee has the right to appeal the additional civil penalties imposed by the CDTFA. For more information about the CDTFA civil penalties, see Publication 161, Criminal Citations Include a Civil Administrative Process.
Civil Appeals Process – Notices, Suspensions, Revocations, and Civil Fines
CDTFA Business Tax & Fee Division: When BTFD receives its copy of a civil citation, BTFD will enter the violation(s) on the licensee's record. Depending on the type of violation(s), a Warning Notice or a Notice of Violation will be sent to the licensee. A Warning Notice informs the CTPLA licensee that the violation(s) listed was entered on the license record, but no penalties were imposed. A Notice of Violation informs the CTPLA licensee of the violation(s) that was entered on the license record and the specific penalty(s) imposed. Both the Warning Notice and the Notice of Violation advise the CTPLA licensee of the right to appeal the violations cited and how to proceed.
The CTPLA licensee may appeal the violation(s) and/or penalties as explained in the Warning Notice or Notice of Violation. The appeal must be filed within 30 days from the date of the notice, and must include the licensee's contentions and any supporting documentation. If no appeal is filed with the BTFD, the violation(s) is added to the licensee's permanent license record and applicable penalties are assessed.
If BTFD receives a timely request for appeal, a Notice of Conference will be sent to the CTPLA licensee. This notice will provide a conference date, time, and telephone number to call (appeal conference is conducted by telephone). To accept the scheduled conference, the licensee must complete and file the Response to Notice of Conference (on the back of the notice) within 10 days from the date of the Notice of Conference.
Designated BTFD staff presides over the appeal conference. A member of the Investigations Division also participates in the conference to represent the department.
BTFD will mail its written decision to the CTPLA licensee within 90 days of the conference setting forth its findings and conclusions and any applicable penalties. A licensee who disagrees, in whole or in part, with this decision may appeal it to the next level with the CDTFA Appeals Bureau, as explained in more detail in the letter sent with the BTFD decision.
CDTFA Appeals Bureau: To appeal the BTFD decision, the CTPLA licensee must complete the Request for Appeals Conference (on the back of the Notice of Decision) and return that notice within 30 days from the date of the BTFD decision. The request for an Appeals Bureau conference must specify the grounds upon which the findings and conclusions of that decision are being contested. If a timely appeal is not filed, the BTFD decision becomes final.
If a timely appeal is filed, the Appeals Bureau will process the Request for Appeals Conference and notify the CTPLA licensee of the date, time and telephone number to call for the scheduled conference (appeal conference is conducted by telephone). The Appeals Conference is conducted by an Appeals Bureau attorney and includes a member of the Investigations Division to represent the department.
The Appeals Bureau will mail its written decision to the CTPLA licensee generally within 90 days from the conference, setting forth its findings and conclusions. A licensee who disagrees with the decision, in whole or in part, may appeal it to the next level with the Office of Tax Appeals (OTA). The OTA is a separate state agency that provides an independent review for appeals of CDTFA decisions.
Office of Tax Appeals: To appeal the decision of the Appeals Bureau, a written request for review must be filed with the OTA within 30 days of the date of the Appeals Bureau written decision. Instructions for submitting a request for review by OTA is explained in the decision letter. If a timely appeal is not filed, the Appeals Bureau decision becomes final.
If a timely appeal is filed, the CTPLA licensee will receive an acknowledgement of receipt from OTA and instructions on how to proceed. OTA's appeal process includes the submission of written briefs and optional oral hearing before a panel of three administrative law judges. Once the OTA appeal process is complete, OTA will mail its written opinion to the CTPLA licensee, explaining its reasons for granting or denying the appeal, in whole or in part. The opinion becomes final, barring a petition for rehearing, 30 days after OTA mails a copy of its opinion to the CTPLA licensee. When the decision becomes final, OTA will return the appeal to the CDTFA to issue the applicable notification document to the CTPLA licensee based on OTA's final decision.
Civil Fines and Penalties
The CDTFA will issue fines and penalties pursuant to its authority under Business and Professions Code Section 22974.71 this section provides:
In addition to any other civil or criminal penalties provided by law, upon a finding that a retailer has violated any provision of this division, the board1 may take the following actions:
- In the case of the first offense, the board2 may revoke or suspend the license or licenses of the retailer pursuant to the procedures applicable to the revocation of a license set forth in Section 30148 of the Revenue and Taxation Code.
- In the case of a second or any subsequent offense, in addition to the action authorized under subdivision (a), the board may impose a civil penalty in an amount not to exceed the greater of either of the following:
- Five times the retail value of the seized cigarettes or tobacco products.
- Five thousand dollars ($5,000).
The CDTFA may reduce civil fines by the amount of any criminal fine imposed by the court for the specific violation. The criminal fine is the statutory penalty imposed for the specific violation, and does not include any other court-imposed fees or costs.