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A BILL TO BE ENTITLED
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AN ACT
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relating to sales and use taxes on e-cigarette vapor products; |
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imposing taxes. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. The legislature finds that: |
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It is in the state's interest to implement consistent and |
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effective taxation on nicotine-based consumer products and set |
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appropriate tax rates based on the risk associated with the |
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different types of new nicotine and tobacco products we see in |
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today's marketplace. |
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SECTION 2. Subtitle E, Title 2, Tax Code, is amended by |
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adding Chapter 164 to read as follows: |
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CHAPTER 164. TAX ON E-CIGARETTE VAPOR PRODUCTS |
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Sec. 164.0001. DEFINITIONS. In this chapter: |
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(1) "E-cigarette" has the meaning assigned by Section |
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161.081, Health and Safety Code. |
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(2) "Vapor product" means a consumable nicotine liquid |
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solution or other material containing nicotine suitable for use in |
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an e-cigarette. |
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Sec. 164.0002. E-CIGARETTE VAPOR PRODUCT SALES TAX. (a) A |
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tax is imposed on each sale of a vapor product in this state. |
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(b) The tax rate is five cents for each milliliter or |
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fractional part of a milliliter of vapor product sold. |
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(c) The tax imposed under this section is in addition to the |
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tax imposed under Subchapter C, Chapter 151. The tax imposed under |
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this section does not apply to a sale unless the tax imposed under |
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Subchapter C, Chapter 151, applies to the sale. |
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Sec. 164.0003. E-CIGARETTE VAPOR PRODUCT USE TAX. (a) A |
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tax is imposed on the storage, use, or other consumption in this |
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state of a vapor product purchased from a retailer for storage, use, |
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or other consumption in this state. |
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(b) The tax rate is five cents for each milliliter or |
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fractional part of a milliliter of vapor product stored, used, or |
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otherwise consumed in this state. |
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(c) The tax imposed under this section is in addition to the |
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tax imposed under Subchapter D, Chapter 151. The tax imposed under |
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this section does not apply to the storage, use, or other |
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consumption of a vapor product unless the tax imposed under |
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Subchapter D, Chapter 151, applies to the storage, use, or other |
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consumption. |
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Sec. 164.0004. APPLICATION OF OTHER PROVISIONS OF CODE. |
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(a) Except as provided by this chapter: |
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(1) the taxes imposed under this chapter are |
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administered, imposed, collected, and enforced in the same manner |
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as the taxes under Chapter 151 are administered, imposed, |
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collected, and enforced; and |
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(2) the provisions of Chapter 151 applicable to the |
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sales tax imposed under Subchapter C, Chapter 151, and the use tax |
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imposed under Subchapter D, Chapter 151, apply to the sales and use |
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taxes imposed under this chapter. |
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(b) A change in the law relating to the taxation of the sale |
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or use of a vapor product under Chapter 151 also applies to the |
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sales or use tax imposed under this chapter. |
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Sec. 164.0005. REPORTS. (a) A person required to file a |
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report under Section 151.403 who is also required to collect or pay |
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a tax under this chapter shall file with the comptroller a report |
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stating: |
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(1) for sales tax purposes, the volume of vapor |
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products sold by the seller during the reporting period; |
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(2) for use tax purposes, the volume of vapor products |
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sold by the retailer during the reporting period for storage, use, |
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or other consumption in this state; |
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(3) the volume of vapor products subject to the use tax |
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that were acquired during the reporting period for storage, use, or |
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other consumption in this state by a purchaser who did not pay the |
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tax to a retailer; |
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(4) the amount of the taxes due under this chapter for |
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the reporting period; and |
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(5) any other information required by the comptroller. |
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(b) The report required by this section for a reporting |
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period is due on the same date that the tax payment for the period is |
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due. |
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Sec. 164.0006. RECORDS. A person required to file a report |
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under Section 151.403 who is also required to collect or pay a tax |
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under this chapter shall keep a complete record of: |
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(1) the volume of vapor products sold in this state |
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during each reporting period; |
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(2) the volume of vapor products, including the |
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constituent parts of vapor products, purchased from every source |
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during each reporting period; |
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(3) all sales and use taxes, and any money represented |
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to be sales or use tax, collected during each reporting period; and |
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(4) any other information required by the comptroller. |
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Sec. 164.0007. DISPOSITION AND USE OF PROCEEDS. The |
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comptroller shall deposit the proceeds from taxes imposed under |
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this chapter as follows: |
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(1) 20 percent to the credit of an account in the |
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general revenue fund administered by the Department of State Health |
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Services, which may be appropriated to the department only for the |
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purpose of administering youth vaping prevention and awareness |
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programs; and |
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(2) the remainder to the credit of the general revenue |
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fund. |
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SECTION 3. This Act takes effect September 1, 2021. |