California Cigarette & Tobacco Products Licensing Act of 2003 – Retailer License

What is a cigarette and tobacco products retailer?

A cigarette and tobacco products retailer is a person who sells cigarettes or tobacco products directly to the public from a California retail location.

Who is required to obtain and maintain a cigarette and tobacco products retailer's license?

In accordance with the California Cigarette and Tobacco Products Licensing Act of 2003 (Act), every retailer who sells or will sell cigarettes or tobacco products in California is required to obtain a cigarette and tobacco retailer's license from the California Department of Tax and Fee Administration (CDTFA) and renew it annually. This licensing requirement is in addition to other permits and licenses that may be required depending on your business operations. A valid cigarette and tobacco retailer's license is required before you begin making sales of cigarettes and tobacco products in California.

"Retailer" means a person who sells cigarettes or tobacco products directly to the public from a California retail location, including vending machines.

As of June 9, 2016, state law expanded the definition of a tobacco product, for cigarette and tobacco products retail licensing purposes, to include:

Any product containing, made, or derived from tobacco or nicotine that is intended for human consumption.
Any electronic smoking or vaping device that delivers nicotine or other vaporized liquids.
Any component, part, or accessory of a tobacco product, whether or not sold separately.

Examples include, but are not limited to, electronic cigarettes, atomizers, vaping tanks or mods, and eLiquid or eJuice. A tobacco product does not include a product that the U.S. Food and Drug Administration has approved as a cessation product or for other therapeutic purposes (e.g., nicotine patches).

Effective January 1, 2017, any retailer who sells any products included in the expanded definition of a tobacco product is required to obtain and maintain a retailer license from the CDTFA in order to engage in the retail sale of these products.

Will I need to apply for any other permits?

Depending on your business operations, you may be required to obtain more than just a cigarette and tobacco products retailer's license. If you are a new retailer you may need to obtain a seller's permit from the CDTFA to report sales and use tax. Retailers also operating as distributors or wholesalers may need to obtain cigarette and/or tobacco products distributor or wholesaler licenses under the Act. For more information, call the customer service center at 1-800-400-7115 and select "Special Taxes and Fees" from the main menu.

What are the requirements to obtain and maintain a retailer's license?

Every cigarette and tobacco products retailer that sells cigarettes or tobacco products, which include, 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; or any component, part, or accessory of a tobacco product, whether or not sold separately, must apply for and obtain a cigarette and tobacco products retailer's license prior to making retail sales. All new applications must be submitted with a license fee payment for each retail location. Each retail location must have a separate license for that location. A cigarette and tobacco retail license is valid for a 12-month period, is not assignable or transferable, and must be renewed annually. If you add another retail location, your license will be renewed for that location based on a 12-month period. This 12-month period would begin in the month you obtained your license for your first retail location. See our rates page for the current license fee amount.

Beginning January 1, 2017, you will be required to pay an annual renewal fee for each retail location (Business and Professions Code sections 22972 (d), 22973 (e), and 22973.3 (e)). If you fail to renew your license(s) timely, your license(s) will expire. Please remember that you may not sell cigarettes or tobacco products, including, 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; or any component, part, or accessory of a tobacco product, whether or not sold separately, without a valid Cigarette and Tobacco Products Retailer License.

Online Registration

You may register for a cigarette and tobacco products retailers license through our online registration system. Online registration is the convenient way to register and is available 24 hours a day.

What are my responsibilities as a holder of a cigarette and tobacco products retailer's license under this Act?

As a retailer of cigarettes or tobacco products you must:

Conspicuously display the license at each retail location in a manner visible to the public.

The following requirements do not apply to 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; any component, part, or accessory of a tobacco product, whether or not sold separately:

Keep complete and legible purchase invoices for cigarettes and tobacco products for four (4) years. See specific invoice requirements below.
Keep these invoices at the location indicated on your license for the first year after purchase.
Allow CDTFA staff or law enforcement agencies to review your invoices upon request.

The law also adds recordkeeping requirements and other provisions related to your purchase of cigarettes and tobacco products. Your cigarette and tobacco product purchase invoices must meet certain legal requirements.

Each invoice must be legible, readable, and include:

The wholesaler or distributor's name, address, telephone number, and their California Cigarette and Tobacco Products Wholesaler or Distributor's license number. (It is illegal to buy cigarettes or tobacco products from a person who does not have a license.)
Your name, address, and California Cigarette and Tobacco Products Retailer's License number.
An itemized list of the cigarette or tobacco products you purchased. Cigarettes must be listed by the brand and style names, flavor, filter, and/or packaging when applicable, number of cartons or packs sold, and the sales price. Tobacco products must be listed by brand, type (such as pipe, cigars, or roll-your-own), flavor, packaging (such as pouches, tins, or boxes), quantity sold, and sales price.
The date you purchased the cigarette or tobacco products.
The amount of California excise taxes due to the CDTFA by the distributor on the sale of cigarettes and tobacco products listed on the invoice.
However, a licensed cigarette and tobacco products distributor that is also a licensed cigarette and tobacco products retailer or manufacturer may include this statement on each invoice for the sale of cigarettes or tobacco products instead of listing the amount of excise taxes due to the CDTFA: "All California cigarette and tobacco product taxes are included in the total amount of this invoice."

Cigarette and tobacco products retailers should also be aware that it is illegal to sell cigarettes and roll-your-own products that are not listed on the Attorney General's California Tobacco Directory. Please remember to refer to the California Tobacco Directory for a list of manufacturers and brand families that are certified as being in compliance with California law. Please refer to the Attorney General's Directory. This requirement does not apply to products that were recently added to the definition of a tobacco product for licensing purposes such as electronic cigarettes, atomizers, vaping tanks or mods and eLiquid or eJuice.

Violations of the law are subject to civil and criminal penalties, and products not listed on the Tobacco Directory in a retailer's possession can be seized and forfeited to the State.

Penalties

You must maintain accurate and complete records, including purchase invoices. Failure to do so is a misdemeanor punishable by a fine not to exceed five thousand dollars ($5,000), or imprisonment not to exceed one year in a county jail, or both. This requirement does not apply to products such as electronic cigarettes, atomizer, vaping tanks or mods and eLiquid or eJuice.

As a cigarette and tobacco products retailer, it is illegal for you to purchase cigarettes from a manufacturer, importer, distributor, wholesaler, or any other person who is not licensed pursuant to this Act, or whose license has been suspended or revoked. Doing so could result in suspension or revocation of your license, fines, seizure of the products, and/or imprisonment. If a retailer purchases tobacco products from an unlicensed person located out of state, the retailer then becomes responsible for the excise tax and must register with the CDTFA as a distributor (see information above regarding the need to have more than one business license). These requirements do not apply to products such as electronic cigarettes, atomizers, vaping tanks or mods, and eLiquid or eJuice.

The Investigations Division of the CDTFA may issue citations to a licensee that is not in compliance with the provisions of the Act or the Cigarette and Tobacco Products Tax Law. Two types of citations may be issued: civil citations and criminal citations. The criminal citation is a Notice to Appear in court. Both types of citations are subject to civil penalties.

Criminal citations are processed through the court system. Depending on the violation(s) cited, the court may impose fines, jail time or both. Once the criminal proceedings are complete, the CDTFA may impose additional civil penalties.

A civil appeals process is available to the licensee for violations cited, civil penalties imposed, and suspension or revocation of a license. Additional information on the California Cigarette and Tobacco Products Licensing Act of 2003 - Civil Appeals Process is available on our Investigation Division website. You can also review the Frequently Asked Questions regarding the appeals process.

For additional information on penalties for noncompliance and enforcement provisions under this Act, visit the Investigations Division website or contact them by phone at 1-916-324-0105.