TOBACCO TAX INCREASE GOES INTO EFFECT

Proposition 10, California's new tobacco tax goes into effect January 1, 1999. Retailers must file a “Floor Tax Return,” and pay tax, on all tobacco products in inventory as of 12:01 A.M. on that day. The Floor Tax Return and payment is due on or before February 15, 1999.

The tax on cigarettes (see definition below) is:

• On a pack containing 20 individual cigarettes: $.50
• On a pack containing 25 individual cigarettes: $.625
• On a pack containing 10 individual cigarettes: $.25
• The tax on other tobacco products is 35.36 percent of the wholesale cost (see definition of “wholes sale cost” below).
• Following are excerpts from the applicable tax law:
• Every dealer must, on or before the DUE DATE, file a floor stock tax return and pay the floor stock on all cigarettes and tobacco products in their possession or under their control as of 12:01 a.m. on January 1, 1999.
• “Cigarette” means any roll for smoking, made wholly or in part of tobacco, irrespective of size or shape and irrespective of whether the tobacco is flavored, adulterated or mixed with any other ingredient, where such roll has a wrapper or cover made of paper or any other material, except where such wrapper is wholly or in the greater part made of tobacco and such roll weighs over three pounds per thousand. “Cigarette” includes, but is not limited to, little cigars such as “Winchester” and “Dutch treats”.
• “Tobacco Products” include, but are not limited to, all forms of cigars, smoking tobacco, chewing tobacco, snuff, and any other articles or products make of, or containing at least 50 percent tobacco, but do not include cigarettes, or little cigars.
• “Dealer” includes every person, other than one holding a distributor or wholesaler's license, who engages in this state in the sale of cigarettes or tobacco products.
• “Wholesale cost” means the cost of tobacco products to the distributor prior to any discounts or trade allowances.
• Every dealer who files a consolidated sales tax return for more than one place of business should include all cigarettes and tobacco products in their possession or under their control in one single floor stock tax return.
• Every dealer operating vending machines through which they sell cigarettes or tobacco products must include in their floor stock tax return the stock of cigarettes and tobacco products in their possession or under their control including cigarettes and tobacco products in the vending machines.

To contact the Board of Equalization's information center call 800-400-7115.

1998 UST COMPLIANCE

As of January 1, 1999 it is illegal for carriers to deliver petroleum products to a facility that is not in compliance with 1998 UST upgrade requirements. Facilities meeting the UST requirement should have a decal certifying compliance. However, six municipalities/agencies within California have been granted a six-month extension in the issuance of compliance decals. Those six municipalities/agencies are the counties of Butte, Contra Costa, Fresno and San Francisco, the City of Glendale, and the Livermore-Pleasanton Fire Department. In these counties and entities self-certification may be a viable option for tank owners if other elements of compliance are present. However anyone who falsely self-certifies may be fined up to $25,000. Contact you local agency for more information.