California Prop 56 - Hidden Vape Tax

[zoiDman]

I have No Clue what California is doing. Doesn't look like this page has been Updated in awhile.

Tax and Fee Guide for Cigarettes and Tobacco Products

Difference in How Cigarettes and tobacco Products Are Taxed

Two types of excise taxes are collected on cigarettes and tobacco products distributed in California: 1) the cigarette tax, and 2) the cigarette and tobacco products surtaxes. Each tax is described below, according to the type of product sold.

Cigarettes
Cigarettes are subject to both the cigarette tax and two cigarette and tobacco products surtaxes, collectively referred to as taxes. The taxes are assessed on each cigarette distributed in California.

Distributors pay the taxes by purchasing cigarette tax stamps from the BOE. Distributors are required to affix the tax stamp to each package of cigarettes before distribution. In turn, they receive a purchase discount of 0.85% of the total tax value per purchase order to help offset the cost of affixing cigarette tax stamps. Distributors pass the excise taxes on to their customer, and the taxes become part of the retail selling price of the cigarettes. The cost of the cigarette tax stamp includes all of the taxes.

Tobacco Products
The tax on other tobacco products, also known as OTP, is subject to two surtaxes. The BOE determines one combined rate annually that is equivalent to the combined rate of the taxes applied to cigarettes. The total tobacco products tax is imposed upon the first distribution of tobacco products at a rate determined annually by the BOE and is paid by tobacco products distributors.

A tobacco products distributor is required to calculate the tobacco products tax due based on the wholesale cost of the tobacco products distributed and remit the amounts owed each month on tax return forms provided by the BOE.

Currently, electronic cigarettes (eCigarettes) do not fall under the Revenue and Taxation Code definitions of cigarettes or tobacco products as they do not contain tobacco. Therefore, eCigarettes are not subject to California's excise tax.

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Also doesn't seem like Most California Vapers are very worried about. What with the Abysmal amount of Effort to get people Turn On and Voting No by Retailers. Or any Outrage by Vapers now that it has Passed.

 

[Lessifer]

Yeah, I don't think the site has been updated much, but I believe, if I'm reading things correctly that the tax doesn't apply now. Come April, it will be applied at the rate that would have been set this past July, and then in April the board will determine the rate that will begin this July, which will be based on the new $2.87 per pack.

As for California vapers and retailers. Yeah, don't really know what to say about that.

 

[oplholik]

I got plenty to say about that, but won't say it here. I really don't want to get started.

 

[Endor]

I have No Clue what California is doing.

This simple thought crosses my mind on a daily basis, either when driving on a road that is so potholed dirt is starting to show, or when watching the nightly local news. But, I digress...

Also doesn't seem like Most California Vapers are very worried about. What with the Abysmal amount of Effort to get people Turn On and Voting No by Retailers. Or any Outrage by Vapers now that it has Passed.

I think that most voters were not aware of the vapor tax part of this. All of the media focus was on the $2/pack cigarette portion, and even arguments against the measure focused on how the money was distributed, not that it would impact vapers.

As far as outrage is concerned, I express mine by buying my products out of state.

 

[Verb]

Sad news,

"...the California state Board of Equalization, which is charged with establishing the tax for e-cigarettes, is currently developing regulations that will broaden the scope of the tax such that it will include devices and components thereof that are used during operation of the e-cigarette device, regardless of whether they are sold with or without e-liquids that contain nicotine."

 

[oplholik]

Well, there it is. After 3/30 all I should need are the occasional batteries, and maybe in a couple years some more tobacco flavors, or I can go unflavored. I will be doing some more shopping till then.
I'm just wondering, for out of state sales where the taxes won't be applied when, and if I order something, when I should pay the tax myself, monthly, or at the end of the year?
I'm not confident that for batteries, for example, if I order them from an electronix store, that will get me around the tax. My CC purchases in the past could identify me as a known ecig user. I don't know how far they are going to try to go in trying to catch the various things we buy.

 

[Rossum]

My CC purchases in the past could identify me as a known ecig user. I don't know how far they are going to try to go in trying to catch the various things we buy.

I'm in the same boat in PA. They won't get a penny out of me. The good thing about all those CC purchases (and the e-mail confirmations from vendors) is that they are evidence that I bought all my stuff before the tax went into effect last October 1.

 

[zoiDman]

Sad news,

"...the California state Board of Equalization, which is charged with establishing the tax for e-cigarettes, is currently developing regulations that will broaden the scope of the tax such that it will include devices and components thereof that are used during operation of the e-cigarette device, regardless of whether they are sold with or without e-liquids that contain nicotine."

I was Unaware that the CA BOE had the Authority to make Determinations as to what Should or Shouldn't be Taxed?

I was under the impression that under the California Constitution, that Power lies with the Legislative Body or the Voters.

 

[oplholik]

You may be correct Zoid, I don't know, perhaps we need to see the whole document that @Verb is referring to. Ca is known to not let something like that stand in their way, when it involves something they want to do.

 

[Lessifer]

Sad news,

"...the California state Board of Equalization, which is charged with establishing the tax for e-cigarettes, is currently developing regulations that will broaden the scope of the tax such that it will include devices and components thereof that are used during operation of the e-cigarette device, regardless of whether they are sold with or without e-liquids that contain nicotine."

Where did you see that? This says otherwise but that doesn't mean it's not true: https://www.boe.ca.gov/pdf/l488.pdf

 

[Lessifer]

The relevant section

1. Products not subject to excise tax
   
   
   • Nicotine delivery devices sold independently and not in combination with any liquid or
     
     substance containing nicotine;
     
     
   • Any battery, battery charger, carrying case, or any other accessory used in the operation of a nicotine delivery device if sold separately from a substance containing nicotine; and
     
     
   • Any product approved by the U. S. Food and Drug Administration as a tobacco cessation product or other therapeutic purpose when that product is marketed and sold for such approved use (for instance, nicotine patches).
     

 

[Verb]

It's an excerpt from a letter to Blue Dot Vapor from their law firm Keller & Heckman. It's new correspondence, addressing ongoing maneuvering to change things from what was actually passed.

 

[zoiDman]

... Ca is known to not let something like that stand in their way, when it involves something they want to do.

Yeah... If it Didn't Stop someone like Indiana, not sure why California should be Any Different.

Especially having the 9th Circuit Court of Appeals being located where they are.

 

[Katya]

I was Unaware that the CA BOE had the Authority to make Determinations as to what Should or Shouldn't be Taxed?

I was under the impression that under the California Constitution, that Power lies with the Legislative Body or the Voters.

Exactly. We the People did not vote for that. Can they change the wording (intent) of the proposition??????

 

[sofarsogood]

i bet the tax collectors are discovering how complicated it is to tax vaping stuff. Vaping is so cheap it's hard to figure out how to tax it and get any money. They might as well tax school books and baby food to discourage illegal immigration.

 

[Katya]

On a happier note:

President Trump's Deregulators Should Tell The FDA's Anti-Vaping Jihadists to .... Out

I like "anti-vaping jihadists."

 

[zoiDman]

Exactly. We the People did not vote for that. Can they change the wording (intent) of the proposition??????

They Can't change the wording. But the Intent? That can be kinda Ephemeral in Implementers minds.

Prop 56 has all the Makings for a Friggin Train Wreck for CA Vaper's.

"Were Not going to Tell You how much the Tax will be putting on e-Liquids that contain Nicotine. And Now that it has Passed, we might just Imply it to Whatever we Want."

Somewhere James Otis Jr. is turning over in his Grave.

 

[Katya]

This state is so screwed up...

 

[zoiDman]

i bet the tax collectors are discovering how complicated it is to tax vaping stuff. Vaping is so cheap it's hard to figure out how to tax it and get any money. ...

Just a Friendly Tip:

I wouldn't bet my last Liter of Nicotine Base on that.

 

[zoiDman]

This state is so screwed up...

Yeah... But were getting a Shiny New High Speed Rail sometime in 2027.

That is, unless a Dam Collapses and Washes the tracks away. Then we will get it in 2035.