Laws, Regulations and Annotations


Business Taxes Law Guide – Revision 2022

Cigarette and Tobacco Products Tax Annotations

Rate of Tax; Tobacco Products—Section 30123(b)

Wholesale Cost of Manufactured Cigar. When a retailer purchases raw goods at wholesale and manufactures cigars on the retailer's premises, the retailer is selling the cigar as the finished product. As such, a tax base must be determined which reflect not only the cost of the raw goods, but also labor, overhead, and markup. The wholesale cost of the manufactured cigar is computed by determining the wholesale cost of a cigar of similar size and quality that is available for purchase at the wholesale level. This figure is used as the fair market value of the cigars made at the retailer's premises. 2/7/96.