California tobacco retailers, including convenience stores, will soon face an increase in their annual state tobacco retailer license fee.
Signed on Friday by Gov. Gavin Newsom, Assembly Bill 573 will now require each application for a retailer license filed on or after July 1, 2026, to be accompanied by a fee of $450 per retail location. The current fee for the tobacco retailer license is $265 per year, which has been unchanged since 2016, the bill states.
Under the legislation, the California Department of Tax and Fee Administration (CDTFA) will receive funding to continue and expand its flavored tobacco product seizure and enforcement operations.
California's ban on all flavored tobacco sales in the state took effect in December 2022.
The bill states that the “passage of California’s law banning the sale of most flavored tobacco products resulted in a significant increase in seizure costs that have drastically affected the total number of inspections the CDTFA is able to complete.”
Democratic state assembly member Chris Rogers, who introduced the bill, said “CDTFA is currently only able to visit 11% of tobacco retailers each year and, without additional funding from the state tobacco license, those inspection numbers will continue to decline.”
The increase of the tobacco retailer fee will make sure more retailers are inspected annually by the CDTFA, the bill states, and it adds that it would “bolster compliance with the state flavored tobacco licensing and tax laws and the Stop Tobacco Access to Kids Enforcement Act.”
The California Fuels & Convenience Alliance (CFCA), which has advocated for the convenience-store industry since 1952 in California, told CSP Daily News that it is “deeply” disappointed that the governor signed this legislation.
This bill “imposes a substantial increase in tobacco licensing fees on compliant retailers while doing little to curb the state’s rampant illicit tobacco trade,” CFCA said. “This bill is intended to enhance enforcement of the state’s flavored tobacco ban, yet it fails to address the real source of the problem, which is illegal sales occurring online and outside of the regulated marketplace.”
CFCA members are responsible small business owners who have fully complied with state law by removing flavored products from their shelves, the association said.
“Despite their compliance, they continue to lose business to illicit sellers who face minimal enforcement,” CFCA said. “Burdening legitimate operators with dramatically higher license fees is unfair and counterproductive because it raises costs for small retailers while doing nothing to stop the underground market that is already costing California an estimated $1.5 billion a year in lost tax revenue.”
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