BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SBX2 10 (Beall) - Cigarette and tobacco product licensing: fees
and funding
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|Version: July 16, 2015 |Policy Vote: HEALTH 9 - 3 |
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|Urgency: No |Mandate: No |
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|Hearing Date: August 24, 2015 |Consultant: Brendan McCarthy |
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This bill does not meet the criteria for referral to the
Suspense File.
Bill
Summary: SB X2 10 would change the existing licensing fee
assessed on tobacco retailers from a one-time $100 fee to an
annual $265 fee. The bill would also increase the existing
$1,000 annual licensing fee assessed on tobacco distributors to
$1,200.
Fiscal
Impact:
Unknown administrative costs for the Board of Equalization to
make required computer system changes and notify retailers
(Compliance Fund). The Board indicates that implementing the
bill by January 1, 2016 will require it to redirect resources
away from existing responsibilities to make the necessary
system changes. According to the Board, a delay in
implementation to January 1, 2017 would allow the Board to
make the necessary changes within existing resources without
delaying other changes.
SB 151 (Hernandez) Page 1 of
?
Ongoing annual revenue increases of $11.1 million per year
from increased licensing fees on tobacco retailers and on
distributors and wholesalers (Compliance Fund).
Background: Current law requires the Board of Equalization to license
tobacco wholesalers and retailers. The purpose of this licensing
requirement is to facilitate the collection of state tobacco
taxes and prevent tax evasion. Tobacco products are subject to
both a specific excise tax on tobacco products as well as the
general Sales and Use Tax. Under current law, retailers of
tobacco products pay a one-time, $100 fee to be licensed.
Distributors and wholesalers pay an annual licensing fee of
$1,000.
Proposed Law:
SB X2 10 would change the existing licensing fee assessed on
tobacco retailers from a one-time $100 fee to an annual $265
fee. The bill would also increase the existing $1,000 annual
licensing fee assessed on tobacco distributors to $1,200.
Related
Legislation: AB X2 11 (Nazarian) is identical to this bill.
That bill is pending in the Assembly.
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