California: Tobacco Excise Taxes
California Cigarette and Tobacco Excise Taxes
|Total California Cigarette Taxes||Average Cost Per Pack||Ranking (Highest to Lowest)|
|$0.87 / pack||$5.53 / pack||30th / 51|
In addition to (or instead of) traditional sales taxes, cigarettes and other tobacco products are subject to excise taxes on both the California and Federal levels. Excise taxes on tobacco are implemented by every state, as are excises on alcohol and motor fuels like gasoline.
Current California Tobacco Excise Tax Rates
The primary excise taxes on tobacco in California are on cigarettes, though many states also have taxes on other tobacco products like cigars, snuff, or e-cigarettes. The tax on cigarettes is $0.87 per pack containing 20 cigarettes and a tax on all other tobacco products of 28.95% of manufacturer's selling price.
California Cigarette Tax - $0.87 / pack
In California, cigarettes are subject to a state excise tax of $0.87 per pack of 20. Cigarettes are also subject to California sales tax of approximately $0.43 per pack, which adds up to a total tax per pack of $1.30. California's cigarette excise tax rate has not been changed in over a decade.
The average cost of a pack of cigarettes in California is $5.53, which is the 30th highest in the United States.
California Other Tobacco Products Tax - 28.13% / Wholesale Price
In California, other tobacco products are subject to a state excise tax of 28.13% / wholesale price as well as federal excise taxes (listed below).
Tobacco tax rates are changed yearly in California, effective July 1st.
California Medical Marijuana Tax - 15.00%
Medical marijuana is legal in California, and is subject to state taxes. There are no federal excise taxes collected on marijuana, since it is still seen as illegal under Federal laws.
Currently, the California sales tax does not apply to medical marijuana
Medical marijuana is subject to a state cannabis excise tax of 15%.
In addition to the gross receipts tax on sales, the following levies apply to marijuana cultivators: $9.25/ounce of flowers and $2.75/ounce of leaves.
The cultivation tax rates for 2021 are unchanged from 2020 due to recent legislation. The CDTFA will adjust the cultivation tax rates annually starting in 2022.
California Recreational Marijuana Tax - 22.50%
Recreational marijuana is legal in California, and is subject to state taxes. There are no federal excise taxes collected on marijuana, since it is still seen as illegal under Federal laws.
Currently, recreational marijuana is subject to a California cannabis sales tax of 7.50%.
Recreational marijuana is subject to a state excise tax of 15%.
The cannabis excise tax applies to the average market price of the cannabis or cannabis product that is sold. The type of transaction - 'arm's length' or 'non-arm's length' will dictate the average market price. An arm’s length transaction reflects the fair market value within the open market where each person knows the price and willingly participates in the transaction. The average market price must also include a markup which is currently 80 percent as determined by the California Department of Tax and Fee Administration. The 15% excise tax is determined from this price.
Payment of California Tobacco Excise Taxes
Payments of tobacco excise taxes are made by vendors, not by consumers, though the taxes will be passed on in the tobacco's retail price. Sales reports and payments are due on the 25th day of each month.
Federal Tobacco Excise Taxes
The price of all tobacco products sold in California also includes Federal Tobacco excise taxes, which are collected from the manufacturer by the Tobacco and Tobacco Tax and Trade Bureau and generally passed on to the consumer in the product's price. Federal excise tax rates on tobacco products are as follows:
Cigars and Cigarettes
|Small Cigarettes||$50.33 per 1,000 cigarettes, or $1.01 per pack of 20|
|Large Cigarettes||$105.69 per 1,000 cigarettes, or $2.11 per pack of 20|
|Small Cigars||$50.33 per 1,000 cigars, or $1.01 per pack of 20|
|Large Cigars||52.75% of sales price but not to exceed $402.60 per 1,000 cigars, or $0.4026 maximum each|
Other Tobacco Products
|Pipe Tobacco||$2.8311 per pound, or $0.1769 per one-ounce tin|
|Chewing Tobacco||$0.5033 per pound, or $0.0315 per one-ounce tin|
|Snuff||$1.51 per pound, or $0.0944 per one-ounce tin|
|Roll-your-own Tobacco||$24.78 per pound, or $1.5488 per one-ounce tin|
There are also federal excise taxes on cigarette rolling paper and cigarette tubes.
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