The Association Between the License Fee Increase and the Density of Tobacco Retailers in California—A Segmented Interrupted Time-Series Analysis by Income and Race/Ethnicity

Introduction: On May 9, 2016, the State of California passed a law to increase the licensing fee for tobacco retailers from a one-time-only fee of $100 to an annual fee of $265, effective on June 9, 2016. This study investigates the association between this fee increase and retailer densities by neighborhood income and race/ethnicity characteristics. Methods: We obtained quarterly data on the number of active tobacco retailer licenses from 2011 to 2020 in every zip code in California from the California Department of Tax and Fee Administration. These data were then linked to zip code-level income, race/ethnicity, and population measures. We used a single-group segmented interrupted time-series analysis to assess the association between the increase in licensing fees and retailer densities by neighborhood income and race/ethnicity. Results: After the implementation of the annual licensing fees, the retailer density decreased both immediately and gradually. Specifically, the retailer density dropped by 0.47 in the first quarter following the intervention. Compared to the pre-intervention time trend, the retailer density decreased quarterly by 0.05. Furthermore, the impacts of increasing licensing fees were more pronounced in low-income and the majority Black zip codes. Conclusions: Given that higher smoking prevalence is associated with greater tobacco outlet density, the licensing fee increase could be an effective policy tool to reduce tobacco use among economically disadvantaged and minority Black communities, thereby addressing tobacco-use disparities.