Did California state and local sales tax apply to the cigarette-tax amount embedded in a pack's retail price?

Plain-English summary

California state and local sales tax applied to the full retail price of cigarettes, including the cigarette-tax amount embedded in that price.

Tax counsel reasoned that cigarette tax was imposed on distributors and became a business tax or expense reflected in the consumer price. The Legislature had considered but not enacted a specific sales-tax exclusion for it.

Citations and references

• The official letter cites no statute or regulation by number.
• July 29 letter asking whether sales tax applied to the cigarette-tax amount included in cigarette prices — year, request, and attachments, if any, not provided in the official PDF
• Legislative session that enacted the cigarette tax and proposals considered but not enacted to exclude cigarette tax from the sales-tax measure — session year, bill and proposal identifiers, votes, analyses, enacted provision, and legislative materials not supplied
• Distributor cigarette-tax liability and cigarette prices including that tax — returns, invoices, price records, distributor records, tax calculations, and payment records not reproduced in the official PDF
• August 10, 1960 tax-counsel response copied to the Sacramento Administrator — no taxpayer reply, return treatment, audit, assessment, refund claim, agency adoption, appeal, or later outcome supplied
• Official Annotation 295.1180's state-and-local sales-tax, full-cigarette-price, included-cigarette-tax conclusion, and August 10, 1960 date — annotation omits the July 29 request, distributor-liability reasoning, unenacted legislative proposals, copied administrator, underlying records, later outcome, and reliance status and supplies no additional proceeding record

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/295-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/295-1180.pdf

Original ruling text

295.1180

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

August 10, 1960

Dear Mr.
This is in reply to your letter of July 29 concerning the application of the sales tax to the amount of the cigarette tax which is included in the price of cigarettes. The sales tax, both State and local, applies to the entire sales price of cigarettes including the amount of the cigarette tax included therein. The cigarette tax is imposed upon the distributor of cigarette s and is a part of the price to the consumer the same as the many other taxes and expenses of manufacturers, wholesalers, distributors and other that are reflected in the price paid by the consumer for merchandise. During the session of the legislature which passed the cigarette tax, consideration was given to excluding by law the amount of the cigarette tax from the sales tax, but proposals to accomplish this result were not enacted into law.

Very truly yours,

E. H. Stetson
Tax Counsel

EHS:tl
cc: Sacramento Administrator