Laws, Regulations and Annotations


Business Taxes Law Guide—Revision 2024

Cigarette and Tobacco Products Tax Regulations

Title 18. Public Revenues
Division 2. California Department of Tax and Fee Administration — Business Taxes (State Board of Equalization — Business Taxes — See Chapters 6 and 9.9)
Chapter 9. Cigarette and Tobacco Products Tax Law Regulations

Article 11. Refunds for Stamps and Meter Impressions

Regulation 4065

Regulation 4065. Unsalable Cigarettes.

Reference: Section 30177, Revenue and Taxation Code.

(a) The Department will refund or credit to a distributor the denominated value, less the purchase discount, of identifiable cigarette tax stamps affixed to packages of cigarettes which have become unfit for use or unsalable before distribution, or after distribution if the cigarettes have been returned for credit or have been replaced and proof is submitted to the Department showing that the cigarettes have not been used for smoking in California. The distributor must file a claim for refund or credit with the Department. If the distributor is claiming refunds or credits for cigarette tax stamps affixed to packages of cigarettes from different manufacturers, the distributor must file separate claims by manufacturer. A claim must be signed by the claimant or the claimant’s representative and contain the following information:

(1) The date of the claim;

(2) The specific grounds upon which the claim is based;

(3) Documentation to support the claim;

(4) The distributor’s name, account number, address, and telephone number;

(5) The number and type of cigarette tax stamps being claimed for refund;

(6) The name of the manufacturer of the packages of cigarettes to which the cigarette tax stamps are affixed; and

(7) The total amount of the claim, less the discount allowed under Revenue and Taxation Code section 30166.

(b) An authorized Department employee, upon verification of the affixed cigarette tax stamps, shall ensure that the distributor has used a permanent marker or another method authorized by the Department to darken each affixed cigarette tax stamp so that it is no longer recognizable. Once this has been verified, the Department employee will provide a certification to the distributor with the number of affixed cigarette tax stamps that have been verified by the Department. A claim shall only be granted with respect to the verified amount of affixed cigarette tax stamps included in the claim.

(c) Before a claim is granted, the distributor shall provide a copy of the credit memorandum or affidavit from the manufacturer certifying that the distributor returned the packages of unfit or unsalable cigarettes and indicating the number of cigarette tax stamps that were affixed to the packages of cigarettes.

(d) If the packages of unfit or unsalable cigarettes affixed with cigarette tax stamps were not returned to the manufacturer, the distributor shall provide proof that the cigarettes in the packages with the tax stamps affixed were destroyed in the presence of a Department employee authorized to witness their destruction.

History—Adopted June 24, 1959.

Formerly Regulation 4062 amended and renumbered 4065 January 12, 1968.

Amended September 26, 2001, effective February 15, 2002. Changed "indicia" to "stamps or meter impressions".

Amended December 27, 2021, effective December 27, 2021. The amendments reformatted the regulation’s text as subdivision (a); revised the first sentence in reformatted subdivision (a) to replace "board" with "Department" in two places, add "cigarette tax" after "identifiable," and delete "or meter impressions" from before "affixed"; revised the second sentence in reformatted subdivision (a) to replace "Claim" with "The distributor must file a" and replace "must be made on a form prescribed by the board and shall be accompanied by a properly executed receipt and a copy of the credit memorandum of the manufacturer for returned stock, or by proof of destruction of the cigarettes with the tax stamps or meter impressions thereon in the presence of an employee of the board authorized to witness the destruction" with "with the Department"; added a new third sentence to subdivision (a) and new subdivisions (b), (c), and (d); and added references to Government Code sections 15570.22 and 15570.24 to the regulation’s authority note.