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Cigarette Excise Tax State cigarette tax: $2.87 per pack of 20 (set by Proposition 56 in 2016, effective April 1, 2017) Federal cigarette tax: approximately $1.01 per pack of 20 (under Internal Revenue Code section 5701) Total tax burden on a pack of cigarettes in California: nearly $4.00 before sales tax Other Tobacco Products (OTP) Tax The CDTFA recalculates the OTP tax rate every year on April 1, based on cigarette wholesale price changes

On the other hand, independent e-liquid manufacturers face fewer entry barriers but must navigate fragmented distribution networks and compete on price in a market dominated by commoditized flavor options

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