California is very progressive in its regulation of tobacco products. Earlier this year, the state raised the age of tobacco purchases to 21. Additionally, the state passed a law to ensure e-cigarettes are treated the same as traditional cigarettes, which means e-cigarettes are now being taxed the same as cigarettes.

California also has a Senate Bill climbing up the line that if passed, will drastically change the tobacco industry throughout the state. California Senate Bill 1400, will effectively ban the sale of tobacco products in all convenience stores, grocery stores, liquor stores, gas stations and drug stores as of January 1, 2019. According to the bill, only retail stores that generate more than 60% of gross revenue from the sale of tobacco and tobacco accessories would be allowed to sell tobacco products.

In total, there are 11,540 convenience stores in California. Obviously, many business owners are opposed to the bill as they would be at a huge financial disadvantage if the bill were passed. In many instances tobacco purchases lead to purchases of other items. As such, businesses would see a decrease in both tobacco sales as well as other sales that occur simply as a result of the consumer being in the store for the purchase of a tobacco product.

The National Association of Tobacco Outlets is pushing its members to oppose this legislation. Additionally, the group is sending letters to every state senator and assembly member to explain the grave effects this bill would have on many businesses and the state’s economy. The California Assembly Business and Professions Committee will hold a hearing on the bill on June 28, 2016.

Gerald “Jerry” Donnini II is a shareholder of the Law Offices of Moffa, Sutton, & Donnini, P.A. Mr. Donnini concentrates in the area of state and Federal tax matters, with a heavy emphasis on the tobacco, alcohol, motor fuel and related industries. He also handles a myriad of multi-state state and local tax issues. Mr. Donnini is a co-author for CCH’s Expert Treatise Library: State Sales and Use Tax and writes extensively on multi-state tax issues for SalesTaxSupport.com.  For more information please call us at 888-966-8216.

Posted in Califronia Tobacco Tax, Regulated Substances, Tobacco