State Board of Equalization News Release

For Immediate Release

May 27, 2016

NR 53-16-G

Contact: Office of Public Affairs

 

New Law Raises Licensing Fees for Cigarettes and Tobacco Products

Sacramento – Sellers of cigarettes and tobacco products will see their licensing fees increase starting June 9, 2016. The increased fees are a result of Assembly Bill x2 11, which was signed into law on May 4 and increases the Cigarette and Tobacco Products License application and renewal fees for retailers, wholesalers, and distributors to provide additional funding for cigarette and tobacco products tax compliance. This new law is effective the same day that the age for purchasing cigarettes and tobacco products raises from 18 to 21 years old. License applications can be submitted through the Board of Equalization’s (BOE) online registration system.

The BOE administers a statewide program to license cigarette and tobacco products manufacturers, importers, distributors, wholesalers, and retailers (Cigarette and Tobacco Products Licensing Act of 2003). Currently, retailers pay a one-time licensing fee of $100 per location where these products are sold. The new law will require them to pay $265 annually for each location. Distributors and wholesalers currently pay $1,000 per calendar year per location. The new law will require them to pay $1,200 per calendar year per location.

Listed below are the fees that go into effect on June 9, 2016 for all new licenses.

License Type

Old Application Fee

(On or before June 8, 2016)

New Application Fee

(On or After June 9, 2016)

Retailer $100 per location $265 per location
Wholesaler/Distributor $1,000 per location $1,200 per location

Beginning January 1, 2017, the new law also imposes an annual renewal fee of $265 for retailer licenses and increases the wholesaler and distributor license annual renewal fee to $1,200. The new renewal fee amounts are shown below.

License Type

Old Renewal Fee

(On or before December 31, 2016)

New Renewal Fee

(On or After January 1, 2017)

Retailer $0 $265 per location per year
Wholesaler/Distributor $1,000 per location per calendar year $1,200 per location per calendar year

WSJ Article on State of Cuban Tobacco Production

Smoked: Cuba's Cigar Industry Isn't Ready for Its American Moment

SAN LUIS, Cuba-The fertile soil here in the Pinar del Río valley has long produced a richly flavored, slow-burning tobacco that is, without exaggeration, the envy of the world. Some of Cuba's best-paid workers roll the cured leaves by hand into cigars carrying the names Cohiba and Montecristo and Partagás, luxury brands as coveted by aficionados as the sparkling wines of Champagne or the single malt whiskies of Scotland.

Recent Developments in California & Nationally

Date:     May 20, 2016

To:         To Our Valued California Customers

From:     Charles J. Janigian

Subject:  Recent Developments in California & Nationally

In case you have not been following the news the following is a recap of Legislative Bills signed into by Governor Jerry Brown:

SB5X2 by Senator Mark Leno, Democrat, San Francisco, will classify e-cigarettes as tobacco products, making them subject to the same restrictions as cigarettes, such as smoke-free laws in and around public buildings and workplaces and civil penalties for those caught selling to minors.

SB7X2 by Senator Ed Hernandez, Democrat, Azusa, will make it a crime to sell tobacco to anyone under 21, with an exemption for active military personnel. There will be no penalties, however, for anyone smoking under the age of 21.

AB7X2 by Assemblyman Mark Stone, Democrat, Monterey Bay, will remove many legal exemptions that allow smoking in indoor workplaces.

AB9X2 by Assemblymen Tony Thurmond, Democrat, Richmond, and Adrin Nazarian, Democrat, Sherman Oaks, will require all schools to be tobacco free.

AB11X2 by Adrin Nazarian, Democrat, Sherman Oaks, will increase the state’s tobacco licensing fee from a one-time $100 fee to a $265 annual fee and increase the distributor and wholesaler license fee from $1000 to $1,200 annually.

The Governor did veto the following Bill:

AB10X2 by Assemblyman Richard Bloom, Democrat, Santa Monica, which would have allowed counties and cities to ask for voter approval on local tobacco taxes.

In addition, the campaign to raise California’s cigarette tax by $2 a pack has collected enough signatures to qualify the proposal for the November 8, 2016 ballot. In addition to the $2 a pack cigarette tax increase there would be an equivalent tax increase on all other tobacco products.

The FDA announced it will extend Federal regulatory authority over e-cigarettes. In addition it will extend its authority over the premium cigar industry.

We will keep you informed of all developments as they occur.

EPC Cigar Co’s Response to FDA Deeming Regulation

epc logoErnesto Pérez Carrillo
FOR IMMEDIATE RELEASE

May 9, 2016
Miami, Florida

Dear Loyal Friends and Clients,

As I am sure you are all aware, a few days ago the Food and Drug Administration (FDA) announced the final rule on docket FDA-2014-N-0189, which the industry has been referring to as the Deeming Rule or Option 1. Like most in the cigar industry, we are still reviewing the Rule and considering the impact this Rule will have on our manufacturing, distribution and sales processes. However, even in light of the release of this rule, we wanted to let our customers know that we will continue to fight for the rights of cigar smokers across this great country. No matter what the final regulatory landscape and additional financial burdens will be, EPC Cigar Co. will not be diminished by the Federal Government or the FDA. Our family’s tradition of cigar making, which we have been doing now for many generations, will continue in full force. Furthermore, EPC Cigar Company is ready to commit the necessary resources to comply with whatever obligations and restrictions are imposed upon our industry by the FDA, regardless of whether we deem these to be arbitrary, unfair or excessively burdensome. You have our commitment that we will stay true to the family’s ideals of consistency, tradition and passion for perfection in our cigars. In short, we are here to stay!

Sincerely,

Ernesto Pérez Carrillo