A total of six bills were proposed in California, that were all related to regulation on cigarette and tobacco products. The Governor of California, Jerry Brown, signed off on five of the bills and vetoed one.

The most controversial bill was the one that the Governor vetoed, AB-10. Under this bill, counties would have had the authority to tax the distribution of cigarettes and other tobacco products, subject to voter approval. In his veto message, Brown wrote that endorsing new taxes on a blanket basis goes too far, especially with so many tobacco tax bills on the November ballot, which include placing a $2 per pack cigarette tax. He stated, “Although California has one of the lowest cigarette tax rates in the nation, I am reluctant to approve this measure in view of all the taxes being proposed for the 2016 ballot.”

One of the bills the California Governor signed off on, SB-5, lays out the manner in which e-cigarettes will now be regulated within the state. Under this bill, e-cigarettes will now be treated like any other cigarette or tobacco product. This means e-cigarettes will now be taxed the same as other cigarette and tobacco products. Currently, the Cigarette and Tobacco Products Tax Law, imposes a tax on the distribution of cigarettes and tobacco products at specified rates. This bill also establishes an annual licensing fee on e-cigarette retailers of $265 per location.

The other four less controversial bills that were and passed include: AB-11, which will increase California’s tobacco licensing, distributor, and wholesaler fees; SB-7, which will raise California’s legal smoking age and the age to buy tobacco products from 18 to 21, except for active duty military 18 or older; AB-7, which extends California’s workplace smoking ban to owner-operated businesses; and lastly, AB-9, which will serve to make all California schools tobacco-free.

As legislatures currently have a strong focus on tobacco regulation, it will be interesting to monitor the development and success of new regulations on these products. The flurry of activity in California is yet another example of why it is so critical for tobacco and cigarette distributors to stay up to date on the ever-changing legal landscape.

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, Uncategorized