California Code of Regulations › Title 18 - Public Revenues › Division 2 - California Department of Tax and Fee Administration- Business Taxes (State Board of Equalization- Business Taxes, See Ch. 6 and 9.9) › Chapter 9 - Cigarette and Tobacco Products Tax Law Regulations › Article 13 - Particular Transactions › Section 4076 - Wholesale Cost of Tobacco Products

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Definitions.
(1) Arm's-length transaction. An
				  "arm's-length" transaction means a sale entered into in good faith and for
				  valuable consideration that reflects the fair market value in the open market
				  between two informed and willing parties, neither under any compulsion to
				  participate in the transaction.
(2)
				  Discounts or trade allowances. "Discounts or trade allowances" are price
				  reductions, or allowances of any kind, whether stated or unstated, and include,
				  without limitation, any price reduction applied to a supplier's price list. The
				  discounts may be for prompt payment, payment in cash, bulk purchases,
				  related-party transactions, or "preferred-customer" status.
(3) Electronic Cigarettes. "Electronic
				  cigarettes" or "e-cigarettes" are devices or delivery systems sold in
				  combination with nicotine that can be used to deliver the nicotine in aerosol
				  or vapor form to a person, and the liquids such devices or delivery systems
				  heat to create the aerosol or vapor are commonly referred to as "e-liquid" and
				  "e-juice." Electronic cigarettes include any component, part, or accessory of
				  such a device or delivery system that is used during the operation of the
				  device when sold in combination with any liquid or substance containing
				  nicotine. Electronic cigarettes also include any liquids or substances that
				  contain nicotine, regardless of whether they are sold in combination with any
				  device, delivery system, or any component, part, or accessory of such a device
				  or delivery system. If nicotine is not sold in combination with devices,
				  delivery systems, components, parts, accessories, liquids, or substances, then
				  those items are not electronic cigarettes.
(4) Finished tobacco products; finished
				  condition. "Finished tobacco products" and tobacco products in "finished
				  condition" are tobacco products that will not be subject to any additional
				  processing before distribution in the state.
(5) Sold in combination with. A device or
				  delivery system that can be used to deliver nicotine in aerosol or vapor form
				  to a person and any component, part, or accessory of such a device or delivery
				  system is "sold in combination with" a liquid or substance containing nicotine
				  when any of the items are sold with any liquid or substance containing nicotine
				  in their original manufacturer packaging as one unit or sold for a single price
				  before or when the liquid or substance containing nicotine is
				  distributed.
(6) Tobacco Products.
				  Effective April 1, 2017, the definition of "tobacco products" includes all
				  products containing, made, or derived from tobacco or nicotine that are
				  intended for human consumption, except cigarettes, any product that has been
				  approved by the United States Food and Drug Administration for sale as a
				  tobacco cessation product or for other therapeutic purposes where that product
				  is marketed and sold solely for such approved use, and food products as defined
				  in Revenue and Taxation Code section
				  6359.
				  Tobacco products include, but are not limited to, cigars, little or small
				  cigars, chewing tobacco, electronic cigarettes, pipe tobacco, and
				  snuff.