# Tobacco Wholesale Dealers

Wholesale tobacco dealers in B.C. may sell tobacco to other authorized wholesale dealers or retail tobacco dealers in B.C. or to out-of-province locations. Use eTaxBC to access an up-to-date listing of authorized retail tobacco dealers.

All new wholesale dealers may be required to post a bond.

## Tobacco for Resale

You must pay the province a security on all wholesale tobacco you bring or send into B.C. or receive delivery of in B.C. for resale. The amount of security you have to pay is equal to the tobacco tax that is collected when the tobacco is sold by the retailer.

The security must be paid to the Minister of Finance by the 20th day of the month following the month in which you bring or send the tobacco into B.C., or receive delivery of the tobacco in B.C.

Unless otherwise authorized by us:

• you must not sell tobacco to any person who does not hold a valid tobacco permit, and
• you must collect security on all tobacco sold to retailers, which you can keep to reimburse yourself for security you paid on the tobacco

### Security on Cigars

To calculate the security, the taxable price must first be determined. The taxable price is the wholesale price of a cigar, including any other charges, such as duty, excise tax and transportation cost, but not GST, plus a 30% mark-up. The tax rate for cigars is 90.5% of the taxable price, up to a maximum of \$7.00 per cigar, and is the security that you will pay to the province.

Calculating taxable price:  Wholesale price of a cigar + 30% mark-up = Taxable Price

Calculating security:  Taxable Price x 90.5% = Security paid to province

#### Calculation Example 1

Wholesale price of a cigar = \$7.00

Calculating taxable price: \$7.00 + (\$7.00 x 30%) = \$9.10

Calculating Security: \$9.10 x 90.5% = \$8.24

Since the calculated security is greater than the maximum amount, the amount due will only be \$7.00 per cigar.

#### Calculation Example 2

Wholesale price of a cigar = \$5.00

Calculating taxable price: \$5.00 + (\$5.00 x 30%) = \$6.50

Calculating Security: \$6.50 x 90.5% = \$5.88

Since the calculated security is less than the maximum amount, the amount due will be \$5.88 per cigar.

## Tobacco Sold to Wholesale Dealers

You don’t have to collect security on wholesale tobacco products you sell to other dealers who hold a current wholesale dealer’s permit.

## Sales to Out-of-Province Locations

If you sell wholesale tobacco products to out-of-province locations, you must either pay security or apply for a pre-authorized exemption so you are not required to pay security.

To apply for a pre-authorized exemption, send a letter to the Director, Consumer Taxation Programs Branch, at the address below. Your letter must include the following information:

• the name and address of the customer(s) where you will be shipping the tobacco products
• the quantity of tobacco products being shipped
• the date of shipment or frequency of shipments to the customer(s)
• the amount of security for which you are requesting an exemption, and
• your registration number or your customer's registration number in the receiving jurisdiction