New Tax Rate on OTP Products Effective July 1, 2020
New Tax Rate on Other Tobacco Products
Effective July 1, 2020 through June 30, 2021
The California Department of Tax and Fee Administration (CDTFA) recently approved the new tax rate of 56.93 percent effective July 1, 2020 through June 30, 2021. Tobacco products distributors are required to apply this rate to all distributions of other tobacco products (products other than cigarettes) during this effective period.
Annually, the CDTFA is required to determine and impose a tax rate on other tobacco products that is equivalent to the combined rate of taxes imposed on cigarettes. Tobacco products distributors pay this tax upon the distribution of tobacco products in California.
The tobacco products tax is due at the time the tobacco products are distributed in California and is based on the distributor's wholesale cost, the cost of the tobacco products to the distributor prior to any discounts or trade allowances (see Revenue Taxation Code section 30017 and Regulation 4076). Accordingly, the applicable tax rate is the rate in effect at the time the tobacco product is sold by the distributor. You may find current and historical tobacco products tax rates on the CDTFA website: https://www.cdtfa.ca.gov/
For more information regarding cigarette and tobacco products taxes, see our online Tax Guide for Cigarettes and Tobacco Products, or call our Customer Service Center at 1-800-400-7115 (CRS:711), Monday through Friday from 8:00 a.m. to 5:00 p.m. (Pacific time), except state holidays; from the main menu select Special Taxes and Fees.