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 making the treatment of e-cigarettes 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 dynamics throughout the state.
California Senate Bill
1400, will ban the sale of tobacco products in all convenience stores, grocery
stores, liquor stores, gas stations and drug stores as of January 1, 2019.
The bill would only allow tobacco products sales in retail stores that
generate more than 60% of gross revenue from the sale of tobacco and tobacco
In total, there are 11,540 convenience stores in California. Obviously,
many business owners are opposed to the bill as they would take a huge
financial hit if the bill were passed. As often tobacco purchases lead
to purchases of other items the 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.
About the Author: In his law practice Mr. Donnini's primary practice
is multi-state sales and use tax as well as state corporate income tax
controversy. Mr. Donnini also practices in the areas of federal tax controversy,
federal estate planning, Florida probate, and all other state taxes including
communication service tax, cigarette & tobacco tax, motor fuel tax,
and Native American taxation. Mr. Donnini obtained his LL.M. in Taxation
at NYU. Mr. Donnini is licensed to practice law in Florida. If you have
any questions please do not hesitate to contact him via email JerryDonnini@TobaccoTaxRefund.com
or phone at 954-639-4496.