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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 and |
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alternative nicotine products and the computation of taxes imposed |
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on modified risk tobacco products; imposing taxes; reducing the |
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rates of certain taxes imposed on modified risk tobacco products. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subtitle E, Title 2, Tax Code, is amended by |
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adding Chapters 164 and 164A to read as follows: |
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CHAPTER 164. TAX ON E-CIGARETTE VAPOR PRODUCTS AND ALTERNATIVE |
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NICOTINE PRODUCTS |
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Sec. 164.0001. DEFINITIONS. In this chapter: |
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(1) "Alternative nicotine product" means a |
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noncombustible product containing nicotine, but not containing |
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tobacco leaf, that is intended for human consumption, whether |
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chewed, absorbed, dissolved, inhaled, snorted, sniffed, or |
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ingested by any other means. The term does not include an |
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e-cigarette, a vapor product, a product regulated as a drug or |
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device by the United States Food and Drug Administration, or a |
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tobacco product as defined by Section 155.001. |
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(2) "E-cigarette" has the meaning assigned by Section |
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161.081, Health and Safety Code. |
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(3) "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 seven 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 seven 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. ALTERNATIVE NICOTINE PRODUCT SALES TAX. (a) |
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A tax is imposed on each sale of an alternative nicotine product in |
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this state. |
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(b) The tax rate is $1.22 for each ounce or fractional part |
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of an ounce of alternative nicotine product sold. |
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(c) The computation of the tax under this section is based |
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on the net weight of an alternative nicotine product as listed by |
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the manufacturer. |
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(d) 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. 164.0005. ALTERNATIVE NICOTINE 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 an alternative nicotine product purchased from a retailer |
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for storage, use, or other consumption in this state. |
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(b) The tax rate is $1.22 for each ounce or fractional part |
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of an ounce of alternative nicotine product stored, used, or |
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otherwise consumed in this state. |
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(c) The computation of the tax under this section is based |
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on the net weight of an alternative nicotine product as listed by |
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the manufacturer. |
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(d) 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 an alternative nicotine product unless the tax |
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imposed under Subchapter D, Chapter 151, applies to the storage, |
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use, or other consumption. |
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Sec. 164.0006. 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 or alternative nicotine product under |
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Chapter 151 also applies to the sales or use tax imposed under this |
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chapter. |
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Sec. 164.0007. 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 and the net weight of alternative nicotine products sold |
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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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and the net weight of alternative nicotine products sold by the |
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retailer during the reporting period for storage, use, or other |
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consumption in this state; |
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(3) the volume of vapor products and the net weight of |
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alternative nicotine products subject to the use tax that were |
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acquired during the reporting period for storage, use, or other |
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consumption in this state by a purchaser who did not pay the tax to a |
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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. 164.0008. 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 and the net weight of |
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alternative nicotine products sold in this state during each |
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reporting period; |
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(2) the volume of vapor products, including the |
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constituent parts of vapor products, and the net weight of |
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alternative nicotine products purchased from every source during |
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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. 164.0009. DISPOSITION OF PROCEEDS. The comptroller |
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shall deposit the proceeds from taxes imposed under this chapter in |
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the general revenue fund. |
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CHAPTER 164A. COMPUTATION OF TAX IMPOSED ON CERTAIN PRODUCTS |
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CONTAINING TOBACCO OR NICOTINE |
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Sec. 164A.0001. DEFINITION. In this chapter, "modified |
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risk tobacco product" has the meaning assigned by 21 U.S.C. Section |
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387k(b). |
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Sec. 164A.0002. TAX RATE APPLICABLE TO MODIFIED RISK |
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TOBACCO PRODUCT. The rate of a tax applicable to a modified risk |
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tobacco product for which an order under 21 U.S.C. Section 387k(g) |
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is effective is one-half the rate provided by Section 154.021(b), |
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155.021(b), 155.0211(b) or (c), 164.0002(b), 164.0003(b), |
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164.0004(b), or 164.0005(b) that would otherwise apply to the |
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product, notwithstanding the rates specified by those sections. |
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Sec. 164A.0003. RULES. The comptroller may adopt rules to |
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implement this chapter. |
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SECTION 2. The change in law made by this Act does not |
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affect tax liability accruing before the effective date of this |
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Act. That liability continues in effect as if this Act had not been |
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enacted, and the former law is continued in effect for the |
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collection of taxes due and for civil and criminal enforcement of |
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the liability for those taxes. |
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SECTION 3. This Act takes effect September 1, 2021. |