California Can Delay $2.8 Million Tax Refund for Hookah Tobacco

California can withhold a $2.8 million excise tax refund while it determines whether the funds should be reimbursed to a tobacco company or its customers, a state appeals court held Tuesday.

The Tobacco Products Tax Law obligates the state to ensure customers are reimbursed for any excess taxes and can hold onto tax refunds as it determines how much—if any—funds need to be returned to them, Justice Jonathan K. Renner wrote for the California Court of Appeal, Third Appellate District.

Starbuzz International Inc. argued that that the California Department of Tax and Fee Administration defied an administrative body order compelling ...