Tobacco Wholesale Dealers
Tobacco tax rates increased April 1, 2018. Legislative amendments to implement these rates were tabled as part of Budget 2018.
Dealers must file an inventory return. We’ll contact dealers with more information.
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
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:
- your name, address and permit number
- 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
Send your letter to:
Tobacco Tax Section
Consumer Taxation Programs Branch
PO Box 9442 Stn Prov Govt
Victoria, B.C. V8W 9V4
If you don't have a pre-authorized exemption, contact us to find out how you can be refunded for the security payment you made on tobacco delivered out-of-province.
Failure to Pay Security
If you fail to pay security as required, you may be assessed a penalty in the amount that should have been paid, plus interest.
In addition, your wholesale dealer's permit may be suspended, which will prohibit you from selling tobacco in B.C.