Tobacco products licensing in California

Tobacco products retailer licensing requirements

In California, a tobacco retailer is someone who sells tobacco products directly to the public from a California retail location. A retailer can include a vending machine operator.

CDTFA tobacco products retailer licensing requirements include:

• Seller’s permit
• Cigarette and Tobacco Products Retailer's License
• California Electronic Cigarette Excise Tax (CECET) permit: Required if you are a retailer who sells electronic cigarettes containing or sold with nicotine

At the local level, you may be required to obtain:

• General business license: Some municipalities require a general business license for operating a business within a jurisdiction.
• Local tobacco retail license or permit: Some municipalities – including Los Angeles and Santa Cruz – require tobacco retailers to obtain a separate license specific to tobacco businesses.
• Zoning permission: Tobacco retailers are subject to zoning laws and may require additional permits at the local level.

Furthermore, a separate Cigarette and Tobacco Products Retailer's License is required for each location or vending machine. If you operate multiple vending machines at a single location, you will need a separate license for each vending machine.

Note: If you are a mobile seller — meaning you sell from a catering truck, lunch wagon, or other non-static, mobile retail location — you can’t hold a California Cigarette and Tobacco Products Retailer's License and are not permitted to sell cigarettes or tobacco products from such a facility.

Tobacco products wholesaler licensing requirements

A tobacco products wholesaler is a person, other than a licensed tobacco products distributor, who sells tax-paid tobacco products for resale at a specific California location. The CDTFA enforces the following licensing requirements on such sellers:

• Seller’s permit
• Cigarette and Tobacco Products Retailer's License
• Miscellaneous record keeping and reporting

Depending on the business activity and jurisdiction, tobacco wholesalers may have additional license and permit requirements at the local level.

Note: California does not allow cigarette and tobacco product distributors to hold a wholesaler’s license.

Tobacco products distributor licensing requirements

A tobacco products distributor is an individual or business that engages in the distribution of tobacco products in California. If you are a tobacco products distributor, you may not hold a wholesaler's license. In general, distributors purchase tobacco products before any California tobacco products tax is due and then pay the tax when the tobacco products are sold or distributed.

Anyone who distributes tobacco products in California must register with the CDTFA as a tobacco products distributor.

Some CDTFA requirements include the following:

• Seller’s permit
• Cigarette and Tobacco Products Retailer's License
• Miscellaneous record keeping and reporting

Depending on the business activity and jurisdiction, tobacco distributors may have additional license and permit requirements at the local level.

Tobacco products manufacturer licensing requirements

In California, a tobacco product manufacturer is defined as the following:

• Any person, including a repacker or relabeler, who manufactures, fabricates, assembles, mixes, blends, combines, processes, or labels a finished tobacco product.
• An owner of a brand or formula for a tobacco product who contracts with another person to complete the fabrication and assembly of the product to the brand or formula owner's standard.
• A retailer who mixes, blends, or combines a tobacco product that is not suitable for human consumption, such as liquid nicotine, with other ingredients or components to make a tobacco product that is suitable for human consumption.

Some of the CDTFA requirements for tobacco products manufacturers include the following:

• Seller's Permit
• Tobacco Products Manufacturer/Importer's License
• Miscellaneous record keeping and reporting
• Depending on the business activity and jurisdiction, tobacco distributors may have additional license and permit requirements at the local level.

Tobacco manufacturers may have additional license and permit requirements at the local level.

Penalties for operating without a license

Cigarettes, tobacco, and tobacco products are highly regulated in California and other states within the U.S. Failure to comply with the licensing requirements could result in the following:

• Inspection by CDTFA staff and law enforcement officers and possible seizure of any untaxed cigarettes or tobacco products.
• Your business may be subject to civil and criminal penalties and the seizure and/or forfeiture of any noncompliant product.
• If you intentionally evade the reporting, assessment, or payment of cigarette or tobacco products taxes that would otherwise be due you can be found guilty of cigarette or tobacco products tax evasion. Evasion of tax liabilities over $25,000 in a 12-month period is a felony.
• A failure to maintain accurate and complete records and include the required information on invoices 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 fine and imprisonment.
• As a retailer, distributor, or wholesaler, you have a duty to only purchase cigarettes from a manufacturer or person who is licensed. Also, you may not sell cigarettes or tobacco products to a distributor, wholesaler, retailer, or any other person who is not licensed with the CDTFA, or whose license has been suspended or revoked.

California tobacco products license renewals

If you are a retailer, wholesaler, distributor, manufacturer, and/or importer of cigarettes and tobacco products, you must renew your license for each of their locations annually using California’s online registration system.

Furthermore, retailers, wholesalers, and distributors must pay an annual license renewal fee per location to renew their cigarette and tobacco products license, and the fee may not be prorated.

If you add an additional retail location, you must renew your retailer's license for that retail location based on a 12-month period beginning in the month the license for the first retail location was obtained. There is no charge to renew a cigarette and tobacco products manufacturer and/or importer's license.

CT Corporation can help

Outsourcing business registration and license research, applications, management, and renewals can help you take the pressure off internal resources. By working with a full-service management provider who specializes in the efficient processing of general business licenses you can free up your time to focus on starting and growing your California tobacco products business while ensuring you keep up with changing compliance requirements.

For more information on CT Corporation services and how we can streamline your business licensing, please contact us or call us at (844) 878-1800.