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General Fund Revenue
Cigarette Tax: $122 Million
The state imposes an excise tax of 87 cents per pack of 20 cigarettes on distributors selling cigarettes in California. An excise tax is also imposed on distribution of other tobacco products such as cigars, chewing tobacco, pipe tobacco, and snuff. The rate on other tobacco products is calculated annually by the Board of Equalization based on the wholesale price of cigarettes.
Revenues from the tax on cigarettes and other tobacco products are distributed as follows:
- Ten cents of the per-pack tax is allocated to the state General Fund.
- Fifty cents of the per-pack tax, and an equivalent rate levied on non-cigarette tobacco products, goes to the California Children and Families First Trust Fund for distribution according to the provisions of Proposition 10 of 1998.
- Twenty-five cents of the per-pack tax, and an equivalent rate levied on non-cigarette tobacco products, is allocated to the Cigarette and Tobacco Products Surtax Fund for distribution as determined by Proposition 99 of 1988.
- Two cents of the per-pack tax is deposited into the Breast Cancer Fund.
Projections of cigarette tax revenues are based on total and per capita consumption of cigarettes while revenue estimates for other tobacco products rely on wholesale price data.. The cumulative effect of product price increases, the increasingly restrictive environments for smokers, and state anti-smoking campaigns funded by Proposition 99 revenues and revenues from the Master Tobacco Settlement has considerably reduced cigarette consumption.
Annual per capita consumption (based on population ages 18-64) declined from 121 packs in 1989-90 to 83 packs in 1997-98 and 51 packs in 2004-05. The long-term downward trend in consumption should continue to reduce cigarette sales. However, recent efforts by the Board of Equalization to reduce tax evasion have improved revenues.
Figure REV-10 shows the distribution of tax revenues for the General Fund and various special funds for 2005-06 through 2007-08.
The Board of Equalization, which administers the tobacco tax, provides additional information in its annual report, which is available on its website, www.boe.ca.gov.
CHAPTER HIGHLIGHTS for
Revenue Estimates Back to Top
PRINTABLE BUDGET DOCUMENTS Back to Top
Budget Summary - Revenue Estimates (pdf * - 231K)
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Provides this entire Revenue Estimates Chapter in pdf format.
SCHEDULE 2 - Summary of State Tax Collections (pdf * - 9K) -
State Tax Collections per capita and per $100 of personal income.
SCHEDULE 3 - Comparative Yield of State Taxes (pdf * - 12K) -
Revenues for Major State Taxes from 1970-71 through 2007-08.
SCHEDULE 8 - Comparative Statement of Revenues (pdf * - 20K) -
Detail of General and special fund revenues by source for the past, current, and budget years within the following categories: (1) major taxes and licenses, (2) minor revenues, and (3) transfers and loans.
ADDITIONAL INFORMATION Back to Top
Board of Equalization
This site provides information about taxes levied on property, sales, fuel, cigarettes, and alcoholic beverages. The Board prepares an annual report which can be located using that site's search function.
Franchise Tax Board
This site provides information about taxes levied on personal income and on corporations. The Board prepares an annual report which can be located using that site's search function.
Tax Expenditure Report
The Department of Finance annually updates this report on major tax exemptions, exclusions, and credits. This report is posted on Finance's website within the "Financial and Economic Data" page.
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