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A BILL TO BE ENTITLED
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AN ACT
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relating to the regulation of and permits for the sale or delivery |
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of cigarettes, tobacco products, and e-cigarettes; requiring |
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permits; imposing fees; providing administrative penalties. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subtitle G, Title 2, Health and Safety Code, is |
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amended by adding Chapter 147 to read as follows: |
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CHAPTER 147. E-CIGARETTE RETAILER PERMITS |
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SUBCHAPTER A. GENERAL PROVISIONS |
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Sec. 147.0001. DEFINITIONS. In this chapter: |
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(1) "E-cigarette" has the meaning assigned by Section |
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161.081. |
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(2) "E-cigarette retailer" means a person who engages |
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in the business of selling e-cigarettes to consumers, including a |
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person who sells e-cigarettes to consumers through a marketplace. |
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(3) "Marketplace" has the meaning assigned by Section |
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151.0242, Tax Code. |
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(4) "Permit holder" means a person who obtains a |
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permit under Section 147.0052. |
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Sec. 147.0002. INAPPLICABILITY TO CERTAIN PRODUCTS. This |
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chapter does not apply to a product described by Section 161.0815. |
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Sec. 147.0003. HEARINGS. Unless otherwise provided by this |
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chapter, the comptroller shall conduct all hearings required by |
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this chapter in accordance with Chapter 2001, Government Code. The |
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comptroller may designate one or more representatives to conduct |
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the hearings and may prescribe the rules of procedure governing the |
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hearings. |
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Sec. 147.0004. RULES. The comptroller may adopt rules to |
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implement this chapter, including rules exempting a person who |
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sells e-cigarettes to consumers through a marketplace from the |
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requirements of this chapter. |
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SUBCHAPTER B. PERMITS |
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Sec. 147.0051. E-CIGARETTE RETAILER PERMIT REQUIRED. (a) |
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A person may not engage in business as an e-cigarette retailer in |
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this state unless the person has been issued a permit from the |
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comptroller. A person shall obtain a permit for each place of |
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business the person owns or operates at which sales of e-cigarettes |
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are made. |
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(b) The comptroller shall prescribe the form and content of |
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an application for a permit and provide the form on request. |
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(c) The applicant shall accurately complete all information |
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required by the application and provide the comptroller with |
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additional information the comptroller considers necessary. |
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(d) Each applicant that applies for a permit to sell |
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e-cigarettes from a vehicle must provide the make, model, vehicle |
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identification number, registration number, and any other |
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information concerning the vehicle the comptroller requires. |
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(e) All financial information provided under this section |
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is confidential and not subject to Chapter 552, Government Code. |
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(f) Permits for engaging in business as an e-cigarette |
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retailer are governed exclusively by the provisions of this code. |
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Sec. 147.0052. ISSUANCE OF PERMIT. (a) The comptroller |
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shall issue a permit to an applicant if the comptroller: |
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(1) has received an application and fee; |
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(2) does not reject the application and deny the |
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permit under Section 147.0053; and |
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(3) determines that issuing the permit will not |
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jeopardize the administration and enforcement of this chapter. |
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(b) The permit shall be issued for a designated place of |
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business, except as provided by Section 147.0056. |
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(c) The permits are nonassignable. |
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(d) The permit must indicate the type of permit and |
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authorize the sale of e-cigarettes in this state. The permit must |
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show that it is revocable and shall be forfeited or suspended if the |
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conditions of issuance, provisions of this chapter, or rules of the |
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comptroller are violated. |
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Sec. 147.0053. DENIAL OF PERMIT. The comptroller may |
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reject an application and deny a permit if the comptroller finds, |
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after notice and opportunity for hearing, any of the following: |
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(1) the premises where business will be conducted are |
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not adequate to protect the e-cigarettes; or |
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(2) the applicant or managing employee, or if the |
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applicant is a corporation, an officer, director, manager, or any |
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stockholder who holds directly or through family or partner |
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relationship 10 percent or more of the corporation's stock, or, if |
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the applicant is a partnership, a partner or manager: |
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(A) has failed to disclose any information |
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required by Sections 147.0051(c) and (d); or |
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(B) has previously violated provisions of this |
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chapter. |
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Sec. 147.0054. PERMIT PERIOD; FEES. (a) A permit required |
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by this chapter expires on the last day of May of each even-numbered |
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year. |
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(b) An application for a permit required by this chapter |
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must be accompanied by a fee of: |
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(1) one-half of the amount of the fee for a retailer's |
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permit required by Section 154.111(b), Tax Code, if the applicant |
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holds a valid retailer's permit under Section 154.101, 154.102, or |
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155.041, Tax Code; or |
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(2) the amount of the fee for a retailer's permit |
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required by Section 154.111(b), Tax Code. |
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(c) For a new or renewal permit required by Section |
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147.0051, the comptroller shall prorate the fee according to the |
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number of months remaining during the period that the permit is to |
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be in effect. |
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(d) A person who does not obtain a renewal permit in a timely |
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manner must pay a late fee of $50 in addition to the application fee |
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for the permit. |
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(e) If on the date of issuance a permit will expire within |
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three months, the comptroller may collect the prorated permit fee |
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or the fee for the current period and, with the consent of the |
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permit holder, may collect the fee for the next permit period and |
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issue a permit or permits for both periods, as applicable. |
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(f) A person issued a permit for a place of business that |
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permanently closes before the permit expiration date is not |
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entitled to a refund of the permit fee. |
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Sec. 147.0055. PAYMENT FOR PERMITS. (a) An applicant for a |
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permit required by Section 147.0051 shall send the required fee |
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with the application. |
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(b) The payment must be made in cash or by money order, |
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check, or credit card. |
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(c) The comptroller may not issue a permit in exchange for a |
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check until after the comptroller receives full payment on the |
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check. |
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Sec. 147.0056. DISPLAY OF PERMIT. (a) A permit holder |
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shall keep the permit on public display at the place of business for |
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which the permit was issued. |
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(b) A permit holder who has a permit assigned to a vehicle |
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shall post the permit in a conspicuous place on the vehicle. |
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Sec. 147.0057. REVENUE. Revenue from the sale of |
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e-cigarette retailer's permits shall be deposited to the general |
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revenue fund and may be appropriated only as provided by this |
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section. The money may be appropriated first to the comptroller for |
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administering: |
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(1) permitting of retailers under this chapter and |
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Chapters 154 and 155, Tax Code; and |
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(2) disciplinary actions taken under Section |
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161.0901. |
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SUBCHAPTER C. PERMIT SUSPENSION AND REVOCATION |
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Sec. 147.0101. FINAL SUSPENSION OR REVOCATION OF PERMIT. |
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(a) The comptroller may revoke or suspend a permit holder's permit |
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if the comptroller finds, after notice and hearing as provided by |
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this section, that the permit holder violated this chapter or a rule |
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adopted under this chapter. |
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(b) If the comptroller intends to suspend or revoke a |
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permit, the comptroller shall provide the permit holder with |
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written notice that includes a statement: |
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(1) of the reason for the intended revocation or |
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suspension; |
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(2) that the permit holder is entitled to a hearing by |
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the comptroller on the proposed suspension or revocation; and |
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(3) of the date, time, and place of the hearing. |
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(c) The comptroller shall deliver the written notice by |
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personal service or by mail to the permit holder's mailing address |
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as it appears in the comptroller's records. Service by mail is |
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complete when the notice is deposited with the United States Postal |
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Service. |
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(d) The comptroller shall give the permit holder notice |
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before the 10th day before the final hearing. |
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(e) A permit holder may appeal the comptroller's decision to |
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a district court in Travis County not later than the 30th day after |
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the date the comptroller's decision becomes final. |
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(f) A person whose permit is suspended or revoked may not |
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sell, offer for sale, or distribute e-cigarettes from the place of |
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business to which the permit applied until a new permit is granted |
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or the suspension is removed. |
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Sec. 147.0102. SUMMARY SUSPENSION OF PERMIT. (a) The |
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comptroller may suspend a permit holder's permit without notice or |
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a hearing for the permit holder's failure to comply with this |
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chapter or a rule adopted under this chapter if the permit holder's |
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continued operation constitutes an immediate and substantial |
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threat. |
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(b) If the comptroller summarily suspends a permit holder's |
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permit, proceedings for a preliminary hearing before the |
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comptroller or the comptroller's representative must be initiated |
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simultaneously with the summary suspension. The preliminary |
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hearing shall be set for a date not later than the 10th day after the |
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date of the summary suspension, unless the parties agree to a later |
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date. |
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(c) At the preliminary hearing, the permit holder must show |
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cause why the permit should not remain suspended pending a final |
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hearing on suspension or revocation. |
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(d) Chapter 2001, Government Code, does not apply to a |
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summary suspension under this section. |
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(e) To initiate a proceeding to suspend summarily a permit |
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holder's permit, the comptroller shall serve notice on the permit |
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holder informing the permit holder of the right to a preliminary |
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hearing before the comptroller or the comptroller's representative |
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and of the time and place of the preliminary hearing. The notice |
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must be personally served on the permit holder or an officer, |
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employee, or agent of the permit holder or sent by certified or |
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registered mail, return receipt requested, to the permit holder's |
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mailing address as it appears in the comptroller's records. The |
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notice must state the alleged violations that constitute the |
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grounds for summary suspension. The suspension is effective at the |
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time the notice is served. If notice is served in person, the |
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permit holder shall immediately surrender the permit to the |
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comptroller. If notice is served by mail, the permit holder shall |
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immediately return the permit to the comptroller. |
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(f) Section 147.0101, governing hearings for final |
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suspension or revocation of a permit under this chapter, governs a |
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final administrative hearing. |
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SECTION 2. Sections 161.081(1-a), (2), and (4), Health and |
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Safety Code, are amended to read as follows: |
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(1-a) "E-cigarette" means an electronic cigarette or |
|
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any other device that simulates smoking by using a mechanical |
|
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heating element, battery, or electronic circuit to deliver nicotine |
|
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or other substances to the individual inhaling from the device or a |
|
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consumable liquid solution or other material aerosolized or |
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vaporized during the use of an electronic cigarette or other device |
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|
described by this subdivision, regardless of whether the liquid or |
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other material contains nicotine. The term does not include a |
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prescription medical device unrelated to the cessation of smoking. |
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The term includes: |
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(A) a device described by this subdivision |
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regardless of whether the device is manufactured, distributed, or |
|
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sold as an e-cigarette, e-cigar, or e-pipe or under another product |
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name or description; and |
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(B) a component, part, or accessory for the |
|
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device, regardless of whether the component, part, or accessory is |
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sold separately from the device. |
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(2) "Permit holder" has the meaning assigned by |
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Section 147.0001 of this code or Section 154.001 or 155.001, Tax |
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Code, as applicable. |
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(4) "Retailer" means a person who engages in the |
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practice of selling cigarettes, e-cigarettes, or tobacco products |
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to consumers and includes the owner of a coin-operated cigarette, |
|
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e-cigarette, or tobacco product vending machine. The term includes |
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a retailer as [that term is] defined by Section 154.001 or 155.001, |
|
|
Tax Code, and an e-cigarette retailer as defined by Section |
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147.0001 of this code, as applicable. |
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SECTION 3. Section 161.083(d), Health and Safety Code, is |
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amended to read as follows: |
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(d) Notwithstanding any other provision of law, a violation |
|
|
of this section is not a violation of this subchapter for purposes |
|
|
of Section 161.0901 [154.1142 or 155.0592, Tax Code]. |
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SECTION 4. Subchapter H, Chapter 161, Health and Safety |
|
|
Code, is amended by adding Section 161.0901 to read as follows: |
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Sec. 161.0901. DISCIPLINARY ACTION AGAINST CIGARETTE, |
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E-CIGARETTE, AND TOBACCO PRODUCT RETAILERS. (a) A retailer is |
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subject to disciplinary action as provided by this section if an |
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agent or employee of the retailer commits an offense under this |
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subchapter. |
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(b) If the comptroller finds, after notice and an |
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opportunity for a hearing as provided by Chapter 2001, Government |
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Code, that a permit holder has violated this subchapter at a place |
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of business for which a permit is issued, the comptroller may |
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suspend the permit for that place of business and administratively |
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assess a fine as follows: |
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(1) if the permit holder has not been found to have |
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violated this subchapter at that place of business during the |
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24-month period preceding the violation, the comptroller may |
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require the permit holder to pay a fine in an amount not to exceed |
|
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$1,000; |
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(2) if the permit holder has been found to have |
|
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violated this subchapter at that place of business once during the |
|
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24-month period preceding the violation, the comptroller may |
|
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require the permit holder to pay a fine in an amount not to exceed |
|
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$2,000; and |
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(3) if the permit holder has been found to have |
|
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violated this subchapter at that place of business at least twice |
|
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during the 24-month period preceding the violation, the comptroller |
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may: |
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(A) require the permit holder to pay a fine in an |
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amount not to exceed $3,000; and |
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(B) suspend the permit for that place of business |
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for not more than five days. |
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(c) Except as provided by Subsection (e), if the permit |
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holder has been found to have violated this subchapter on four or |
|
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more previous and separate occasions at the same place of business |
|
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during the 24-month period preceding the violation, the comptroller |
|
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shall revoke the permit issued under Chapter 147 of this code or |
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Chapter 154 or 155, Tax Code, as applicable. If the permit holder |
|
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does not hold a permit under Chapter 147 of this code or Chapter 154 |
|
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or 155, Tax Code, the comptroller shall revoke the permit issued |
|
|
under Section 151.201, Tax Code. |
|
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(d) A permit holder whose permit has been revoked under this |
|
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section may not apply for a permit for the same place of business |
|
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before the expiration of six months after the effective date of the |
|
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revocation. |
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(e) For purposes of this section, the comptroller may |
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suspend a permit but may not revoke the permit under Subsection (c) |
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if the comptroller finds that: |
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(1) the employer has not violated this subchapter more |
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than seven times at the place of business for which the permit is |
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issued in the 48-month period preceding the violation in question; |
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(2) the employer requires its employees to attend a |
|
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comptroller-approved seller training program; |
|
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(3) the employees have actually attended a |
|
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comptroller-approved seller training program; and |
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(4) the employer has not directly or indirectly |
|
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encouraged the employees to violate the law. |
|
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(f) The comptroller may adopt rules to implement this |
|
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section. |
|
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SECTION 5. Section 111.00455(b), Tax Code, is amended to |
|
|
read as follows: |
|
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(b) The following are not contested cases under Subsection |
|
|
(a) and Section 2003.101, Government Code: |
|
|
(1) a show cause hearing or any hearing not related to |
|
|
the collection, receipt, administration, or enforcement of the |
|
|
amount of a tax or fee imposed, or the penalty or interest |
|
|
associated with that amount, except for a hearing under Section |
|
|
151.157(f), 151.1575(c), or 151.712(g) of this code or Section |
|
|
161.0901, Health and Safety Code[, 154.1142, or 155.0592]; |
|
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(2) a property value study hearing under Subchapter M, |
|
|
Chapter 403, Government Code; |
|
|
(3) a hearing in which the issue relates to: |
|
|
(A) Chapters 72-75, Property Code; |
|
|
(B) forfeiture of a right to do business; |
|
|
(C) a certificate of authority; |
|
|
(D) articles of incorporation; |
|
|
(E) a penalty imposed under Section 151.703(d); |
|
|
(F) the refusal or failure to settle under |
|
|
Section 111.101; or |
|
|
(G) a request for or revocation of an exemption |
|
|
from taxation; and |
|
|
(4) any other hearing not related to the collection, |
|
|
receipt, administration, or enforcement of the amount of a tax or |
|
|
fee imposed, or the penalty or interest associated with that |
|
|
amount. |
|
|
SECTION 6. Section 154.1135(b), Tax Code, is amended to |
|
|
read as follows: |
|
|
(b) The payment must be made in cash or by money order, [or] |
|
|
check, or credit card. |
|
|
SECTION 7. Section 154.121(b), Tax Code, is amended to read |
|
|
as follows: |
|
|
(b) Revenue from the sale of retailer's permits shall be |
|
|
deposited to the general revenue fund and may be appropriated only |
|
|
as provided by this section. The money may be appropriated first to |
|
|
the comptroller for administering: |
|
|
(1) permitting [administration of licensing] of |
|
|
retailers under this chapter, Chapter [or Chapter] 155 of this |
|
|
code, and Chapter 147, Health and Safety Code; and |
|
|
(2) disciplinary actions taken under Section |
|
|
161.0901, Health and Safety Code. |
|
|
SECTION 8. Section 155.050(b), Tax Code, is amended to read |
|
|
as follows: |
|
|
(b) The payment must be made in cash or by money order, [or] |
|
|
check, or credit card. |
|
|
SECTION 9. Section 155.058(b), Tax Code, is amended to read |
|
|
as follows: |
|
|
(b) Revenue from the sale of retailer's permits shall be |
|
|
deposited to the general revenue fund and may be appropriated only |
|
|
as provided by this section. The money may be appropriated first to |
|
|
the comptroller for administering: |
|
|
(1) permitting [administration of licensing] of |
|
|
retailers under this chapter, Chapter [or Chapter] 154 of this |
|
|
code, and Chapter 147, Health and Safety Code; and |
|
|
(2) disciplinary actions taken under Section |
|
|
161.0901, Health and Safety Code. |
|
|
SECTION 10. Chapters 154 and 155, Tax Code, are amended to |
|
|
read as follows: |
|
|
Sec. 154.001. DEFINITIONS. In this chapter: |
|
|
(1) "Bonded agent" means a person in this state who is |
|
|
a third-party agent of a manufacturer outside this state and who |
|
|
receives cigarettes in interstate commerce and stores the |
|
|
cigarettes for distribution or delivery to distributors under |
|
|
orders from the manufacturer. |
|
|
(2) "Cigarette" means a roll for smoking: |
|
|
(A) that is made of tobacco or tobacco mixed with |
|
|
another ingredient and wrapped or covered with a material other |
|
|
than tobacco; and |
|
|
(B) that is not a cigar. |
|
|
(3) "Commercial business location" means the entire |
|
|
premises occupied by a permit applicant or a person required to hold |
|
|
a permit under this chapter. |
|
|
(4) "Common carrier" means a motor carrier registered |
|
|
under Chapter 643, Transportation Code, or a motor carrier |
|
|
operating under a certificate issued by the Interstate Commerce |
|
|
Commission or a successor agency to the Interstate Commerce |
|
|
Commission. |
|
|
(5) "Consumer" means a person who possesses cigarettes |
|
|
for personal consumption. |
|
|
(6) "Counterfeit stamp" means a sticker, label, print, |
|
|
tag, or token that is used or is intended to be used to simulate a |
|
|
stamp and that is not authorized or issued by the comptroller. |
|
|
(7) "Distributor" means a person who: |
|
|
(A) is authorized to purchase for the purpose of |
|
|
making a first sale in this state cigarettes in unstamped packages |
|
|
from manufacturers who distribute cigarettes in this state and to |
|
|
stamp cigarette packages; |
|
|
(B) ships, transports, imports into this state, |
|
|
acquires, or possesses cigarettes and makes a first sale of the |
|
|
cigarettes in this state; |
|
|
(C) manufactures or produces cigarettes; or |
|
|
(D) is an importer. |
|
|
(7-a) "Engage in business" means, in relation to |
|
|
cigarettes, engaging by a person, either directly or through a |
|
|
representative, in any of the following activities: |
|
|
(A) selling cigarettes in or into this state; |
|
|
(B) using a warehouse or another location to |
|
|
store cigarettes; or |
|
|
(C) otherwise conducting through a physical |
|
|
presence cigarette-related business in this state. |
|
|
(8) "Export warehouse" means a person in this state |
|
|
who receives cigarettes in unstamped packages from manufacturers |
|
|
and stores the cigarettes for the purpose of making sales to |
|
|
authorized persons for resale, use, or consumption outside the |
|
|
United States. |
|
|
(9) "First sale" means, except as otherwise provided |
|
|
by this chapter: |
|
|
(A) the first transfer of possession in |
|
|
connection with a purchase, sale, or any exchange for value of |
|
|
cigarettes in or into this state, which: |
|
|
(i) includes the sale of cigarettes by: |
|
|
(a) a distributor in or outside this |
|
|
state to a distributor, wholesaler, or retailer in this state; and |
|
|
(b) a manufacturer in this state who |
|
|
transfers the cigarettes in this state; and |
|
|
(ii) does not include: |
|
|
(a) the sale of cigarettes by a |
|
|
manufacturer outside this state to a distributor in this state; |
|
|
[or] |
|
|
(b) the transfer of cigarettes from a |
|
|
manufacturer outside this state to a bonded agent in this state; or |
|
|
(c) the sale of cigarettes from a |
|
|
manufacturer, bonded agent, distributor, or importer to an |
|
|
interstate warehouse in this state; |
|
|
(B) the first use or consumption of cigarettes in |
|
|
this state; or |
|
|
(C) the loss of cigarettes in this state whether |
|
|
through negligence, theft, or other unaccountable loss. |
|
|
(10) "Importer" means a person who ships, transports, |
|
|
or imports into this state cigarettes manufactured or produced |
|
|
outside the United States for the purpose of making a first sale in |
|
|
this state. |
|
|
(11) "Individual package of cigarettes" means a |
|
|
package that contains at least 20 cigarettes. |
|
|
(11-a) "Interstate warehouse" means a person in this |
|
|
state who receives unstamped cigarettes from a manufacturer, bonded |
|
|
agent, importer, or distributor and stores the cigarettes |
|
|
exclusively for an interstate warehouse transaction. |
|
|
(11-b) "Interstate warehouse transaction" means the |
|
|
sale or delivery from an interstate warehouse to a person in another |
|
|
state who is licensed or permitted by the other state to affix that |
|
|
state's cigarette stamps or otherwise pay the state's excise tax on |
|
|
cigarettes as may be required. |
|
|
(12) "Manufacturer" means a person who manufactures, |
|
|
fabricates, or assembles cigarettes, or causes or arranges for the |
|
|
manufacture, fabrication, or assembly of cigarettes, for sale or |
|
|
distribution. |
|
|
(13) "Manufacturer's representative" means a person |
|
|
employed by a manufacturer to sell or distribute the manufacturer's |
|
|
stamped cigarette packages. |
|
|
(14) "Permit holder" means a bonded agent, interstate |
|
|
warehouse, distributor, wholesaler, manufacturer, importer, export |
|
|
warehouse, or retailer who obtains a permit under Section 154.101. |
|
|
(15) "Place of business" means: |
|
|
(A) a commercial business location where |
|
|
cigarettes are sold; |
|
|
(B) a commercial business location where |
|
|
cigarettes are kept for sale or consumption or otherwise stored; |
|
|
(C) a vehicle from which cigarettes are sold; or |
|
|
(D) a vending machine from which cigarettes are |
|
|
sold. |
|
|
(16) "Previously used stamp" means a stamp that has |
|
|
been used to show payment of a tax imposed by this chapter and is |
|
|
again used, sold, or possessed for sale or use to show payment of a |
|
|
tax imposed by this chapter. |
|
|
(17) "Retailer" means a person who engages in the |
|
|
business of selling cigarettes to consumers and includes the owner |
|
|
of a cigarette vending machine. |
|
|
(17-a) "Roll-your-own machine" means a machine for |
|
|
commercial use at a retail premise that is capable of producing |
|
|
cigarettes only in quantities for personal use. |
|
|
(18) "Stamp" includes only a stamp that: |
|
|
(A) is printed, manufactured, or made by |
|
|
authority of the comptroller; |
|
|
(B) shows payment of the tax imposed by this |
|
|
chapter; |
|
|
(C) is consecutively numbered and uniquely |
|
|
identifiable as a Texas tax stamp; and |
|
|
(D) is not damaged beyond recognition as a valid |
|
|
Texas tax stamp. |
|
|
(19) "Wholesaler" means a person, including a |
|
|
manufacturer's representative, who sells or distributes cigarettes |
|
|
in this state for resale but who is not a distributor or interstate |
|
|
warehouse. |
|
|
Sec. 154.041. STAMP REQUIRED. (a) A person who pays a tax |
|
|
imposed by this chapter shall securely affix a stamp to each |
|
|
individual package of cigarettes to show payment of the tax. |
|
|
(b) Except as provided by Section 154.152, each distributor |
|
|
shall obtain the necessary stamps before receiving or accepting |
|
|
delivery of unstamped packages of cigarettes. The possession of |
|
|
unstamped packages of cigarettes without the possession of the |
|
|
requisite amount or number of stamps is prima facie evidence that |
|
|
the cigarettes are possessed for the purpose of making a first sale |
|
|
without stamps and without payment of the tax imposed by this |
|
|
chapter. |
|
|
(c) The absence of a stamp on an individual package of |
|
|
cigarettes is notice that the tax has not been paid. |
|
|
(d) A manufacturer of cigarettes outside this state may |
|
|
purchase a stamp and affix it to the individual package and no |
|
|
further payment of the tax is required. |
|
|
(e) The transfer of possession of cigarettes by a bonded |
|
|
agent to a distributor in this state, under instructions received |
|
|
from outside this state, is not a first sale. |
|
|
(f) The transfer of possession of cigarettes by an |
|
|
interstate warehouse in an interstate warehouse transaction is not |
|
|
a first sale and no stamp is required. |
|
|
Sec. 154.101. PERMITS. (a) A person may not engage in |
|
|
business as a distributor, wholesaler, bonded agent, interstate |
|
|
warehouse, manufacturer, export warehouse, importer, or retailer |
|
|
unless the person has applied for and received the applicable |
|
|
permit from the comptroller. |
|
|
(b) Each distributor, wholesaler, bonded agent, interstate |
|
|
warehouse, manufacturer, export warehouse, importer, or retailer |
|
|
shall obtain a permit for each place of business owned or operated |
|
|
by the distributor, wholesaler, bonded agent, interstate |
|
|
warehouse, manufacturer, export warehouse, importer, or retailer. |
|
|
The comptroller may not issue a permit for a place of business that |
|
|
is a residence or a unit in a public storage facility. |
|
|
(c) The comptroller shall prescribe the form and content of |
|
|
an application for a permit and shall furnish the form on request of |
|
|
an applicant. |
|
|
(d) The applicant shall accurately complete all information |
|
|
required by the application and provide the comptroller with such |
|
|
additional information as the comptroller deems necessary. |
|
|
(e) The comptroller may require each corporation, |
|
|
association, joint venture, syndicate, partnership, or |
|
|
proprietorship to furnish financial information regarding the |
|
|
applicant and to provide the identity of each officer, director, |
|
|
stockholder owning 10 percent or more of the outstanding stock, |
|
|
partner, member, owner, or managing employee. |
|
|
(f) Each distributor, wholesaler, and retailer that applies |
|
|
for a permit to sell cigarettes from a vehicle must provide the |
|
|
make, model, vehicle identification number, registration number, |
|
|
and any other information required by the comptroller. |
|
|
(g) All financial information provided under this section |
|
|
is confidential and not subject to Chapter 552, Government Code. |
|
|
(h) Permits for engaging in business as a distributor, |
|
|
wholesaler, bonded agent, interstate warehouse, manufacturer, |
|
|
export warehouse, importer, or retailer shall be governed |
|
|
exclusively by the provisions of this code. |
|
|
(i) This section does not apply to a research facility that |
|
|
possesses and uses cigarettes only for experimental purposes. |
|
|
(j) A person engaged in the business of selling cigarettes |
|
|
for commercial purposes who provides a roll-your-own machine |
|
|
available for use by consumers must obtain manufacturer's, |
|
|
distributor's, and retailer's permits. |
|
|
(k) A person may not hold a Texas distributor permit and an |
|
|
interstate warehouse permit at the same location. |
|
|
Sec. 154.1015. SALES; PERMIT HOLDERS AND NONPERMIT HOLDERS. |
|
|
(a) Except for retail sales to consumers, cigarettes may only be |
|
|
sold or distributed by and between permit holders as provided by |
|
|
this section. |
|
|
(b) A person who is not a permit holder may not sell or |
|
|
distribute more than 200 individual cigarettes to any person. |
|
|
(c) A manufacturer outside this state who is not a permitted |
|
|
distributor may sell cigarettes only to a permitted distributor or |
|
|
permitted interstate warehouse. |
|
|
(d) A permitted distributor may sell cigarettes only to a |
|
|
permitted distributor, wholesaler, or retailer. A permitted |
|
|
distributor who manufactures or produces cigarettes in this state |
|
|
may sell such cigarettes manufactured or produced to a permitted |
|
|
interstate warehouse. |
|
|
(e) A permitted importer may sell cigarettes only to a |
|
|
permitted interstate warehouse, permitted distributor, wholesaler, |
|
|
or retailer. |
|
|
(f) A permitted wholesaler may sell cigarettes only to a |
|
|
permitted distributor, wholesaler, or retailer. |
|
|
(g) A permitted retailer may sell cigarettes only to the |
|
|
consumer and may purchase cigarettes only from a permitted |
|
|
distributor or wholesaler in this state. |
|
|
(h) A permitted export warehouse may sell cigarettes only to |
|
|
persons authorized to sell or consume unstamped cigarettes outside |
|
|
the United States. |
|
|
(i) A manufacturer's representative may sell cigarettes |
|
|
only to a permitted distributor, wholesaler, or retailer. |
|
|
(j) A permitted interstate warehouse may sell cigarettes |
|
|
only in an interstate warehouse transaction. No intrastate sale of |
|
|
cigarettes by an interstate warehouse shall take place without |
|
|
written authorization by the comptroller. |
|
|
Sec. 154.102. COMBINATION PERMIT. (a) The comptroller may |
|
|
issue a combination permit for cigarettes and tobacco products to a |
|
|
person who is a distributor, wholesaler, bonded agent, interstate |
|
|
warehouse, manufacturer, importer, or retailer as defined by this |
|
|
chapter and Chapter 155 for both cigarettes and tobacco products. |
|
|
An interstate warehouse shall not be issued a combination permit as |
|
|
a retailer of cigarettes or tobacco products. |
|
|
(b) A person who receives a combination permit pays only the |
|
|
higher of the two permit fees. |
|
|
Sec. 154.110. ISSUANCE OF PERMIT. (a) The comptroller |
|
|
shall issue a permit to a distributor, wholesaler, bonded agent, |
|
|
interstate warehouse, manufacturer, export warehouse, importer, or |
|
|
retailer if the comptroller: |
|
|
(1) has received an application and fee, if required; |
|
|
(2) believes that the applicant has complied with |
|
|
Section 154.101; and |
|
|
(3) determines that issuing the permit will not |
|
|
jeopardize the administration and enforcement of this chapter. |
|
|
(b) The permit shall be issued for a designated place of |
|
|
business, except as provided by Section 154.117. |
|
|
(c) The permits are nonassignable. |
|
|
(d) The permit must indicate the type of permit that it is |
|
|
and authorize the sale of cigarettes in this state. The permit must |
|
|
show that it is revocable and shall be forfeited or suspended if the |
|
|
conditions of issuance, provisions of this chapter, or rules of the |
|
|
comptroller are violated. |
|
|
Sec. 154.111. PERMIT YEAR; FEES. (a) A permit required by |
|
|
this chapter expires on the last day of February of each year, |
|
|
except that the retailer's permit required by Section 154.101 |
|
|
expires on the last day of May of each even-numbered year. |
|
|
(b) An application for a permit required by this chapter |
|
|
must be accompanied by a fee of: |
|
|
(1) $300 for a bonded agent's permit; |
|
|
(2) $300 for an interstate warehouse's permit; |
|
|
(3) [(2)] $300 for a distributor's permit; |
|
|
(4) [(3)] $200 for a wholesaler's permit; |
|
|
(5) [(4)] $15 for each permit for a vehicle if the |
|
|
applicant is also applying for a permit as a bonded agent, |
|
|
distributor, or wholesaler or has received a current permit from |
|
|
the comptroller under Sections 154.101 and 154.110; and |
|
|
(6) [(5)] $180 for a retailer's permit. |
|
|
(c) A fee is not required for an export warehouse permit. |
|
|
(d) For a new or renewal permit required by Section 154.101, |
|
|
the comptroller shall prorate the fee according to the number of |
|
|
months remaining during the calendar year that the permit is to be |
|
|
in effect. |
|
|
(e) A person who does not obtain a permit each year in a |
|
|
timely manner must pay a fee of $50 in addition to the application |
|
|
fee for the permit. |
|
|
(f) If at the date of issuance a permit will expire within |
|
|
three months, the comptroller may collect the prorated permit fee |
|
|
or the fee for the current year and, with the consent of the permit |
|
|
holder, may collect the fee for the next permit year and issue a |
|
|
permit or permits for both periods, as applicable. |
|
|
(g) A person issued a permit for a place of business that |
|
|
permanently closes before the permit expiration date is not |
|
|
entitled to a refund of the permit fee. |
|
|
Sec. 154.121. REVENUE. (a) Except as provided by |
|
|
Subsection (b), revenue from the sale of permits to distributors, |
|
|
wholesalers, [and] bonded agents, and interstate warehouses is |
|
|
allocated in the same manner as other revenue allocated by |
|
|
Subchapter J. |
|
|
(b) Revenue from the sale of retailer's permits shall be |
|
|
deposited to the general revenue fund and may be appropriated only |
|
|
as provided by this section. The money may be appropriated first to |
|
|
the comptroller for administration of licensing of retailers under |
|
|
this chapter or Chapter 155. |
|
|
(c) If, after any appropriation is made under Subsection |
|
|
(b), revenue remains from the sale of retailer's permits, the |
|
|
remaining money may be appropriated to the comptroller for |
|
|
administration and enforcement of Subchapters H, K, and N, Chapter |
|
|
161, Health and Safety Code, and to the Texas Department of Health, |
|
|
for the administration and enforcement of Section 161.253, Health |
|
|
and Safety Code. |
|
|
(d) If, after any appropriation is made under Subsections |
|
|
(b) and (c), revenue remains from the sale of retailer's permits, |
|
|
the remaining money may be appropriated to the Texas Department of |
|
|
Health to administer the commissioner of public health's |
|
|
responsibilities under Section 161.301, Health and Safety Code. |
|
|
(e) If, after any appropriation is made under Subsections |
|
|
(b), (c), and (d), revenue remains from the sale of retailer's |
|
|
permits, the remaining money may be appropriated to the appropriate |
|
|
entity to administer that entity's responsibilities under Section |
|
|
161.302, Health and Safety Code. |
|
|
Sec. 154.152. INTERSTATE STOCK. (a) A distributor shall |
|
|
set aside unstamped cigarette packages for interstate sale and for |
|
|
which no tax is due under federal law in a separate part of the |
|
|
building from the stamped packages. If the unstamped packages for |
|
|
interstate sale or for which no tax is due under federal law are not |
|
|
stored separately, the cigarettes are subject to the same |
|
|
requirements as cigarettes possessed for the purpose of a first |
|
|
sale in this state. |
|
|
(b) A distributor who possesses unstamped cigarette |
|
|
packages for interstate sale must possess a number of unused stamps |
|
|
from the appropriate state sufficient to stamp the distributor's |
|
|
inventory of unstamped interstate cigarettes, except for cigarette |
|
|
packages for which no tax is due under federal law. Any unstamped |
|
|
packages of cigarettes that exceed the number of out-of-state |
|
|
stamps on hand shall be presumed to be held for sale in this state, |
|
|
except for cigarette packages for which no tax is due under federal |
|
|
law. |
|
|
(c) A person may not transport or cause to be transported |
|
|
from this state cigarettes for sale in another state without first |
|
|
affixing to the cigarettes the stamp required by the state in which |
|
|
the cigarettes are to be sold or paying any other excise tax on the |
|
|
cigarettes imposed by the state in which the cigarettes are to be |
|
|
sold. This provision shall not apply to distribution, sale and |
|
|
transportation of cigarettes sold by an interstate warehouse in an |
|
|
interstate warehouse transaction. |
|
|
(d) A person may not affix to cigarettes the stamp required |
|
|
by another state or pay any other excise tax on the cigarettes |
|
|
imposed by another state if the other state prohibits stamps from |
|
|
being affixed to the cigarettes, prohibits the payment of any other |
|
|
excise tax on the cigarettes, or prohibits the sale of the |
|
|
cigarettes. |
|
|
(e) Not later than the 15th day after the end of each |
|
|
calendar quarter, a person who transports or causes to be |
|
|
transported from this state cigarettes for sale in another state |
|
|
shall submit to the attorney general a report identifying: |
|
|
(1) the quantity of cigarettes, by brand style, |
|
|
transported or caused to be transported in the preceding calendar |
|
|
quarter; and |
|
|
(2) the name and address of each recipient of the |
|
|
cigarettes. |
|
|
Sec. 154.201. RECORD OF PURCHASE OR RECEIPT. Each |
|
|
distributor, wholesaler, bonded agent, interstate warehouse, and |
|
|
export warehouse shall keep records at each place of business of all |
|
|
cigarettes purchased or received, including records of those |
|
|
cigarettes for which no tax is due under federal law. Each retailer |
|
|
shall keep records at a single commercial business location, which |
|
|
the retailer shall designate as its principal place of business in |
|
|
this state, of all cigarettes purchased and received. These |
|
|
records must include: |
|
|
(1) the name and address of the shipper or carrier and |
|
|
the mode of transportation; |
|
|
(2) all shipping records or copies of records, |
|
|
including invoices, bills of lading, waybills, freight bills, and |
|
|
express receipts; |
|
|
(3) the date and the name of the place of origin of the |
|
|
cigarette shipment; |
|
|
(4) the date and the name of the place of arrival of |
|
|
the cigarette shipment; |
|
|
(5) a statement of the number, kind, and price paid for |
|
|
cigarettes, including cigarettes in stamped and unstamped |
|
|
packages; |
|
|
(6) the name, address, permit number, and tax |
|
|
identification number of the seller; |
|
|
(7) in the case of a distributor, copies of the customs |
|
|
certificates required by 19 U.S.C. Section 1681a(c), as amended, |
|
|
for all cigarettes imported into the United States to which the |
|
|
distributor has affixed a tax stamp; and |
|
|
(8) any other information required by rules of the |
|
|
comptroller. |
|
|
Sec. 154.203. REPORT OF SALE OR USE. (a) Each interstate |
|
|
warehouse, distributor, and wholesaler shall keep at each place of |
|
|
business in this state records of each sale, distribution, |
|
|
exchange, or use of cigarettes whether taxed under this chapter or |
|
|
not. Each interstate warehouse, distributor, and wholesaler shall |
|
|
prepare and retain an original invoice for each transaction |
|
|
involving cigarettes. Each interstate warehouse, distributor, or |
|
|
wholesaler shall keep any supporting documentation, including |
|
|
bills of lading, showing shipment and receipt used in preparing the |
|
|
invoices at the place of business of the interstate warehouse, |
|
|
distributor, or wholesaler. The interstate warehouse, |
|
|
distributor, or wholesaler shall prepare and deliver a duplicate |
|
|
invoice to the purchaser. |
|
|
(b) The records for each sale, distribution, exchange, or |
|
|
use of cigarettes must show: |
|
|
(1) the purchaser's name and address, permit number, |
|
|
or tax identification number; |
|
|
(2) the method of delivery and the name of the common |
|
|
carrier or other person delivering the cigarettes; |
|
|
(3) the date, number, and kind of cigarettes in |
|
|
stamped packages sold, distributed, exchanged, or used; and |
|
|
(4) the date, number, and kind of cigarettes in |
|
|
unstamped packages sold, distributed, exchanged, or used. |
|
|
(c) Upon request by the comptroller, each interstate |
|
|
warehouse shall provide to the comptroller copies of periodic |
|
|
cigarette reports filed with each state into which the interstate |
|
|
warehouse sells cigarettes and copies of the PACT Act report |
|
|
required by 15 U.S.C. 376. |
|
|
Sec. 154.501. PENALTIES. (a) A person violates this |
|
|
chapter if the person: |
|
|
(1) is a distributor, wholesaler, manufacturer, |
|
|
export warehouse, importer, bonded agent, interstate warehouse, |
|
|
manufacturer's representative, or retailer and fails to keep |
|
|
records required by this chapter; |
|
|
(2) engages in the business of a bonded agent, |
|
|
interstate warehouse, distributor, wholesaler, manufacturer, |
|
|
export warehouse, importer, or retailer without a valid permit; |
|
|
(3) is a distributor, wholesaler, manufacturer, |
|
|
export warehouse, importer, bonded agent, interstate warehouse, or |
|
|
retailer and fails to make a report or makes a false or incomplete |
|
|
report or application required by this chapter to the comptroller; |
|
|
or |
|
|
(4) is a person affected by this chapter and fails or |
|
|
refuses to abide by or violates a provision of this chapter or a |
|
|
rule adopted by the comptroller under this chapter. |
|
|
(b) A person who violates this section shall pay to the |
|
|
state a penalty of not more than $2,000 for each violation. |
|
|
(c) Each day on which a violation occurs is a separate |
|
|
offense. |
|
|
(d) The attorney general shall bring a suit to recover |
|
|
penalties under this section. |
|
|
(e) A suit under this section may be brought in a court of |
|
|
competent jurisdiction in Travis County or in any court having |
|
|
jurisdiction. |
|
|
Sec. 154.503. POSSESSION IN QUANTITIES LESS THAN 10,000. |
|
|
(a) Except as provided by Sections 154.026(b), 154.041(f), and |
|
|
154.042, a person commits an offense if the person possesses |
|
|
unstamped cigarettes in quantities less than 10,000. |
|
|
(b) This section does not prohibit transportation of |
|
|
cigarettes by a common carrier. |
|
|
Sec. 154.509. PERMITS. A person commits an offense if the |
|
|
person acting: |
|
|
(1) as a distributor, interstate warehouse, |
|
|
wholesaler, or retailer, receives or possesses cigarettes without |
|
|
having a valid permit; |
|
|
(2) as a distributor, interstate warehouse, |
|
|
wholesaler, or retailer, receives or possesses cigarettes without |
|
|
having a permit posted where it can be easily seen by the public; |
|
|
(3) as a distributor, interstate warehouse, or |
|
|
wholesaler, does not deliver an invoice to the purchaser as |
|
|
required by Section 154.203; |
|
|
(4) as a distributor, interstate warehouse, |
|
|
wholesaler, or retailer, sells cigarettes without having a valid |
|
|
permit; or |
|
|
(5) as a bonded agent, interstate warehouse, or export |
|
|
warehouse, stores, distributes, or delivers cigarettes in |
|
|
unstamped packages without having a valid permit. |
|
|
Sec. 154.511. TRANSPORTATION OF CIGARETTES. A person, |
|
|
other than a common carrier, commits an offense if the person: |
|
|
(1) knowingly transports cigarettes without a stamp |
|
|
affixed to each individual package, except as provided by Section |
|
|
154.024(a) or Section 154.152(c); |
|
|
(2) wilfully refuses to stop a motor vehicle operated |
|
|
to transport cigarettes after a request to stop from an authorized |
|
|
person; or |
|
|
(3) while transporting cigarettes refuses to permit a |
|
|
complete inspection of the cargo by an authorized person. |
|
|
Sec. 154.515. POSSESSION IN QUANTITIES OF 10,000 OR MORE. |
|
|
(a) Except as provided by Sections 154.026(b), 154.041(f), and |
|
|
154.042, a person commits an offense if the person possesses |
|
|
unstamped cigarettes in quantities of 10,000 or more. |
|
|
(b) This section does not prohibit transportation of |
|
|
cigarettes by a common carrier. |
|
|
Sec. 155.001. DEFINITIONS. In this chapter: |
|
|
(1) "Bonded agent" means a person in this state who is |
|
|
a third-party agent of a manufacturer outside this state and who |
|
|
receives tobacco products in interstate commerce and stores the |
|
|
tobacco products for distribution or delivery to distributors under |
|
|
orders from the manufacturer. |
|
|
(2) "Cigar" means a roll of fermented tobacco that is |
|
|
wrapped in tobacco and the main stream of smoke from which produces |
|
|
an alkaline reaction to litmus paper. |
|
|
(3) "Commercial business location" means the entire |
|
|
premises occupied by a permit applicant or a person required to hold |
|
|
a permit under this chapter. |
|
|
(4) "Common carrier" means a motor carrier registered |
|
|
under Chapter 643, Transportation Code, or a motor carrier |
|
|
operating under a certificate issued by the Interstate Commerce |
|
|
Commission or a successor agency to the Interstate Commerce |
|
|
Commission. |
|
|
(5) "Consumer" means a person who possesses tobacco |
|
|
products for personal consumption. |
|
|
(6) "Distributor" means a person who: |
|
|
(A) receives untaxed tobacco products for the |
|
|
purpose of making a first sale in this state from a manufacturer |
|
|
outside the state or within the state or otherwise brings or causes |
|
|
to be brought into this state untaxed tobacco products for sale, |
|
|
use, or consumption; |
|
|
(B) manufactures or produces tobacco products; |
|
|
or |
|
|
(C) is an importer. |
|
|
(6-a) "Engage in business" means, in relation to |
|
|
tobacco products, engaging by a person, either directly or through |
|
|
a representative, in any of the following activities: |
|
|
(A) selling tobacco products in or into this |
|
|
state; |
|
|
(B) using a warehouse or another location to |
|
|
store tobacco products; or |
|
|
(C) otherwise conducting through a physical |
|
|
presence tobacco product-related business in this state. |
|
|
(7) "Export warehouse" means a person in this state |
|
|
who receives untaxed tobacco products from manufacturers and stores |
|
|
the tobacco products for the purpose of making sales to authorized |
|
|
persons for resale, use, or consumption outside the United States. |
|
|
(8) "First sale" means, except as otherwise provided |
|
|
by this chapter: |
|
|
(A) the first transfer of possession in |
|
|
connection with a purchase, sale, or any exchange for value of |
|
|
tobacco products in or into this state, which: |
|
|
(i) includes the sale of tobacco products |
|
|
by: |
|
|
(a) a distributor in or outside this |
|
|
state to a distributor, wholesaler, or retailer in this state; and |
|
|
(b) a manufacturer in this state who |
|
|
transfers the tobacco products in this state; and |
|
|
(ii) does not include: |
|
|
(a) the sale of tobacco products by a |
|
|
manufacturer outside this state to a distributor in this state; |
|
|
[or] |
|
|
(b) the transfer of tobacco products |
|
|
from a manufacturer outside this state to a bonded agent in this |
|
|
state; or |
|
|
(c) the sale of tobacco products from |
|
|
a manufacturer, bonded agent, distributor, or importer to an |
|
|
interstate warehouse in this state; |
|
|
(B) the first use or consumption of tobacco |
|
|
products in this state; or |
|
|
(C) the loss of tobacco products in this state |
|
|
whether through negligence, theft, or other unaccountable loss. |
|
|
(9) "Importer" means a person who ships, transports, |
|
|
or imports into this state tobacco products manufactured or |
|
|
produced outside the United States for the purpose of making a first |
|
|
sale in this state. |
|
|
(9-a) "Interstate warehouse" means a person in this |
|
|
state who receives untaxed tobacco products from a manufacturer, |
|
|
bonded agent, importer, or distributor and stores the tobacco |
|
|
products exclusively for an interstate warehouse transaction. |
|
|
(9-b) "Interstate warehouse transaction" means the |
|
|
sale or delivery from an interstate warehouse to a person in another |
|
|
state who is licensed or permitted by the other state to pay the |
|
|
state's excise tax on tobacco products as may be required. |
|
|
(10) "Manufacturer" means a person who manufactures, |
|
|
fabricates, or assembles tobacco products, or causes or arranges |
|
|
for the manufacture, fabrication, or assembly of tobacco products, |
|
|
for sale or distribution. |
|
|
(11) "Manufacturer's representative" means a person |
|
|
employed by a manufacturer to sell or distribute the manufacturer's |
|
|
tobacco products for which the tax imposed under this chapter has |
|
|
been paid. |
|
|
(12) "Permit holder" means a bonded agent, interstate |
|
|
warehouse, distributor, wholesaler, manufacturer, importer, export |
|
|
warehouse, or retailer who obtains a permit under Section 155.041. |
|
|
(13) "Place of business" means: |
|
|
(A) a commercial business location where tobacco |
|
|
products are sold; |
|
|
(B) a commercial business location where tobacco |
|
|
products are kept for sale or consumption or otherwise stored; |
|
|
(C) a vehicle from which tobacco products are |
|
|
sold; or |
|
|
(D) a vending machine from which tobacco products |
|
|
are sold. |
|
|
(13-a) "Raw tobacco" means any part of the tobacco |
|
|
plant, including the tobacco leaf or stem, that is harvested from |
|
|
the ground and is not a tobacco product as the term is defined in |
|
|
this chapter. |
|
|
(14) "Retailer" means a person who engages in the |
|
|
business of selling tobacco products to consumers and includes the |
|
|
owner of a vending machine. |
|
|
(15) "Tobacco product" means: |
|
|
(A) a cigar; |
|
|
(B) smoking tobacco, including granulated, |
|
|
plug-cut, crimp-cut, ready-rubbed, and any form of tobacco suitable |
|
|
for smoking in a pipe or as a cigarette; |
|
|
(C) chewing tobacco, including Cavendish, Twist, |
|
|
plug, scrap, and any kind of tobacco suitable for chewing; |
|
|
(D) snuff or other preparations of pulverized |
|
|
tobacco; or |
|
|
(E) an article or product that is made of tobacco |
|
|
or a tobacco substitute and that is not a cigarette or an |
|
|
e-cigarette as defined by Section 161.081, Health and Safety Code. |
|
|
(16) "Wholesaler" means a person, including a |
|
|
manufacturer's representative, who sells or distributes tobacco |
|
|
products in this state for resale but who is not a distributor or |
|
|
interstate warehouse. |
|
|
Sec. 155.041. PERMITS. (a) A person may not engage in |
|
|
business as a distributor, wholesaler, bonded agent, interstate |
|
|
warehouse, manufacturer, export warehouse, importer, or retailer |
|
|
unless the person has applied for and received the applicable |
|
|
permit from the comptroller. |
|
|
(b) Each distributor, wholesaler, bonded agent, interstate |
|
|
warehouse, manufacturer, export warehouse, importer, or retailer |
|
|
shall obtain a permit for each place of business owned or operated |
|
|
by the distributor, wholesaler, bonded agent, interstate |
|
|
warehouse, manufacturer, export warehouse, importer, or retailer. |
|
|
(c) The comptroller shall prescribe the form and content of |
|
|
an application for a permit and shall furnish the form on request of |
|
|
an applicant. |
|
|
(d) The applicant shall accurately complete all information |
|
|
required by the application and provide the comptroller with |
|
|
additional information the comptroller considers necessary. |
|
|
(e) The comptroller may require each corporation, |
|
|
association, joint venture, syndicate, partnership, or |
|
|
proprietorship to furnish financial information regarding the |
|
|
applicant and to provide the identity of each officer, director, |
|
|
stockholder owning 10 percent or more of the outstanding stock, |
|
|
partner, member, owner, or managing employee. |
|
|
(f) Each distributor, wholesaler, and retailer that applies |
|
|
for a permit to sell tobacco products from a vehicle must provide |
|
|
the make, model, vehicle identification number, registration |
|
|
number, and any other information required by the comptroller. |
|
|
(g) All financial information provided under this section |
|
|
is confidential and not subject to Chapter 552, Government Code. |
|
|
(h) Permits for engaging in business as a distributor, |
|
|
wholesaler, bonded agent, interstate warehouse, manufacturer, |
|
|
export warehouse, importer, or retailer shall be governed |
|
|
exclusively by the provisions of this code. |
|
|
(i) A person may not hold a Texas distributor permit and an |
|
|
interstate warehouse permit at the same location. |
|
|
Sec. 155.0415. SALES: PERMIT HOLDERS AND NONPERMIT |
|
|
HOLDERS. (a) Except for retail sales to consumers, tobacco |
|
|
products may only be sold or distributed by and between permit |
|
|
holders as provided by this section. |
|
|
(b) A person who is not a permit holder may not sell or |
|
|
distribute tobacco products on which a tax of more than $50 has been |
|
|
paid or is due. |
|
|
(c) A manufacturer outside this state who is not a permitted |
|
|
distributor may sell tobacco products only to a permitted |
|
|
distributor or a permitted interstate warehouse. |
|
|
(d) A permitted distributor may sell tobacco products only |
|
|
to a permitted distributor, wholesaler, or retailer. A permitted |
|
|
distributor who manufactures or produces tobacco products in this |
|
|
state may sell such tobacco products manufactured or produced to a |
|
|
permitted interstate warehouse. |
|
|
(e) A permitted importer may sell tobacco products only to a |
|
|
permitted interstate warehouse, permitted distributor, wholesaler, |
|
|
or retailer. |
|
|
(f) A permitted wholesaler may sell tobacco products only to |
|
|
a permitted interstate warehouse, permitted distributor, |
|
|
wholesaler, or retailer. |
|
|
(g) A permitted retailer may sell tobacco products only to |
|
|
the consumer and may purchase tobacco products only from a |
|
|
permitted distributor or wholesaler in this state. |
|
|
(h) A permitted export warehouse may sell tobacco products |
|
|
only to persons authorized to sell or consume untaxed tobacco |
|
|
products outside the United States. |
|
|
(i) A manufacturer's representative may sell tobacco |
|
|
products only to a permitted distributor, wholesaler, or retailer. |
|
|
(j) A permitted interstate warehouse may sell tobacco |
|
|
products only in an interstate warehouse transaction. No |
|
|
intrastate sale of tobacco products by an interstate warehouse |
|
|
shall take place without written authorization by the comptroller. |
|
|
Sec. 155.048. ISSUANCE OF PERMITS. (a) The comptroller |
|
|
shall issue a permit to an interstate warehouse, [a] distributor, |
|
|
wholesaler, bonded agent, manufacturer, importer, or retailer if |
|
|
the comptroller: |
|
|
(1) has received an application and fee, if required; |
|
|
(2) does not reject the application and deny the |
|
|
permit under Section 155.0481; and |
|
|
(3) determines that issuing the permit will not |
|
|
jeopardize the administration and enforcement of this chapter. |
|
|
(b) The permit shall be issued for a designated place of |
|
|
business, except as provided by Section 155.053. |
|
|
(c) The permits are nonassignable. |
|
|
(d) The permit must indicate the type of permit that it is |
|
|
and authorize the sale of tobacco products in this state. The |
|
|
permit must show that it is revocable and shall be forfeited or |
|
|
suspended if the conditions of issuance, provisions of this |
|
|
chapter, or rules of the comptroller are violated. |
|
|
Sec. 155.049. PERMIT YEAR; FEES. (a) A permit required by |
|
|
this chapter expires on the last day of February of each year, |
|
|
except the retailer's permit required by Section 155.041 expires on |
|
|
the last day of May of each even-numbered year. |
|
|
(b) An application for a permit required by this chapter |
|
|
must be accompanied by a fee of: |
|
|
(1) $300 for a bonded agent's permit; |
|
|
(2) $300 for an interstate warehouse's permit; |
|
|
(3) [(2)] $300 for a distributor's permit; |
|
|
(4) [(3)] $200 for a wholesaler's permit; |
|
|
(5) [(4)] $15 for each permit for a vehicle if the |
|
|
applicant is also applying for a permit as a bonded agent, |
|
|
distributor, or wholesaler or has received a current permit from |
|
|
the comptroller under Sections 155.041 and 155.048; and |
|
|
(6) [(5)] $180 for a retailer's permit. |
|
|
(c) A fee is not required for an export warehouse permit. |
|
|
(d) For a new or renewal permit required by Section 155.041, |
|
|
the comptroller shall prorate the fee according to the number of |
|
|
months remaining during the calendar year that the permit is to be |
|
|
in effect. |
|
|
(e) A person who does not obtain a permit each year in a |
|
|
timely manner must pay a late fee of $50 in addition to the |
|
|
application fee for the permit. |
|
|
(f) If at the date of issuance a permit will expire within |
|
|
three months, the comptroller may collect the prorated permit fee |
|
|
or the fee for a current year and, with the consent of the permit |
|
|
holder, may collect the fee for the next permit year and issue a |
|
|
permit or permits for both periods, as applicable. |
|
|
(g) A person issued a permit for a place of business that |
|
|
permanently closes before the permit expiration date is not |
|
|
entitled to a refund of the permit fee. |
|
|
Sec. 155.058. REVENUE. (a) Except as provided by |
|
|
Subsection (b), revenue from the sale of permits to interstate |
|
|
warehouses, distributors, wholesalers, and bonded agents is |
|
|
allocated in the same manner that other revenue is allocated by |
|
|
Subchapter H. |
|
|
(b) Revenue from the sale of retailer's permits shall be |
|
|
deposited to the general revenue fund and may be appropriated only |
|
|
as provided by this section. The money may be appropriated first to |
|
|
the comptroller for administration of licensing of retailers under |
|
|
this chapter or Chapter 154. |
|
|
(c) If, after any appropriation is made under Subsection |
|
|
(b), revenue remains from the sale of retailer's permits, the |
|
|
remaining money may be appropriated to the comptroller for |
|
|
administration and enforcement of Subchapters H, K, and N, Chapter |
|
|
161, Health and Safety Code, and to the Texas Department of Health, |
|
|
for the administration and enforcement of Section 161.253, Health |
|
|
and Safety Code. |
|
|
(d) If, after any appropriation is made under Subsections |
|
|
(b) and (c), revenue remains from the sale of retailer's permits, |
|
|
the remaining money may be appropriated to the Texas Department of |
|
|
Health to administer the commissioner of public health's |
|
|
responsibilities under Section 161.301, Health and Safety Code. |
|
|
(e) If, after any appropriation is made under Subsections |
|
|
(b), (c), and (d), revenue remains from the sale of retailer's |
|
|
permits, the remaining money may be appropriated to the appropriate |
|
|
entity to administer that entity's responsibilities under Section |
|
|
161.302, Health and Safety Code. |
|
|
Sec. 155.101. RECORD OF PURCHASE OR RECEIPT. Each |
|
|
interstate warehouse, distributor, wholesaler, bonded agent, and |
|
|
export warehouse shall keep records at each place of business of all |
|
|
tobacco products purchased or received. Each retailer shall keep |
|
|
records at a single commercial business location, which the |
|
|
retailer shall designate as its principal place of business in the |
|
|
state, of all tobacco products purchased and received. These |
|
|
records must include the following, except that Subdivision (7) |
|
|
applies to distributors only and Subdivision (8) applies only to |
|
|
the purchase or receipt of tobacco products other than cigars: |
|
|
(1) the name and address of the shipper or carrier and |
|
|
the mode of transportation; |
|
|
(2) all shipping records or copies of records, |
|
|
including invoices, bills of lading, waybills, freight bills, and |
|
|
express receipts; |
|
|
(3) the date and the name of the place of origin of the |
|
|
tobacco product shipment; |
|
|
(4) the date and the name of the place of arrival of |
|
|
the tobacco product shipment; |
|
|
(5) a statement of the number, kind, and price paid for |
|
|
the tobacco products; |
|
|
(6) the name, address, permit number, and tax |
|
|
identification number of the seller; |
|
|
(7) the manufacturer's list price for the tobacco |
|
|
products; |
|
|
(8) the net weight as listed by the manufacturer for |
|
|
each unit; and |
|
|
(9) any other information required by rules of the |
|
|
comptroller. |
|
|
Sec. 155.102. REPORT OF SALE OR USE. (a) Each interstate |
|
|
warehouse, distributor, and wholesaler shall keep at each place of |
|
|
business in this state records of each sale, distribution, |
|
|
exchange, or use of tobacco products whether taxed under this |
|
|
chapter or not. Each interstate warehouse, distributor, and |
|
|
wholesaler shall prepare and retain an original invoice for each |
|
|
transaction involving tobacco products. Each interstate |
|
|
warehouse, distributor, or wholesaler shall keep any supporting |
|
|
documentation, including bills of lading, showing shipment and |
|
|
receipt used in preparing the invoices at the place of business of |
|
|
the distributor or wholesaler. The interstate warehouse, |
|
|
distributor, or wholesaler shall prepare and deliver a duplicate |
|
|
invoice to the purchaser. |
|
|
(b) The records for each sale, distribution, exchange, or |
|
|
use of tobacco products must show: |
|
|
(1) the purchaser's name and address, permit number, |
|
|
or tax identification number; |
|
|
(2) the method of delivery and the name of the common |
|
|
carrier or other person delivering the tobacco products; |
|
|
(3) the date, amount, and type of tobacco products |
|
|
sold, distributed, exchanged, or used; |
|
|
(4) the price received for the tobacco products; |
|
|
(5) the number and kind of tobacco products on which |
|
|
the tax has been paid; and |
|
|
(6) for sales from a manufacturer to a distributor or |
|
|
interstate warehouse, the manufacturer's list price for the tobacco |
|
|
products. |
|
|
(c) In addition to the information required under |
|
|
Subsection (b), the records for each sale, distribution, exchange, |
|
|
or use of tobacco products other than cigars must show the net |
|
|
weight as listed by the manufacturer for each unit. |
|
|
(d) Upon request by the comptroller, each interstate |
|
|
warehouse shall provide to the comptroller copies of periodic |
|
|
tobacco product reports filed with each state into which the |
|
|
interstate warehouse sells tobacco products and copies of the PACT |
|
|
Act report required by 15 U.S.C. 376. |
|
|
Sec. 155.201. PENALTIES. (a) A person violates this |
|
|
chapter if the person: |
|
|
(1) is a distributor, wholesaler, manufacturer, |
|
|
export warehouse, importer, bonded agent, interstate warehouse, |
|
|
manufacturer's representative, or retailer and fails to keep |
|
|
records required by this chapter; |
|
|
(2) engages in the business of a bonded agent, |
|
|
interstate warehouse, distributor, wholesaler, manufacturer, |
|
|
export warehouse, importer, or retailer without a valid permit; |
|
|
(3) is a distributor, wholesaler, manufacturer, export |
|
|
warehouse, importer, bonded agent, interstate warehouse, or |
|
|
retailer and fails to make a report required by this chapter to the |
|
|
comptroller or makes a false or incomplete report or application |
|
|
required by this chapter to the comptroller; or |
|
|
(4) is a person affected by this chapter and fails or |
|
|
refuses to abide by or violates a provision of this chapter or a |
|
|
rule adopted by the comptroller under this chapter. |
|
|
(b) A person who violates this chapter shall pay to the |
|
|
state a penalty of not more than $2,000 for each violation. |
|
|
(c) A separate offense is committed each day on which a |
|
|
violation occurs. |
|
|
(d) The attorney general shall bring suits to recover |
|
|
penalties under this section. |
|
|
(e) A suit under this section may be brought in a court of |
|
|
competent jurisdiction in Travis County or in any court having |
|
|
jurisdiction. |
|
|
Sec. 155.207. PERMITS. A person commits an offense if the |
|
|
person acting: |
|
|
(1) as a distributor, interstate warehouse, |
|
|
wholesaler, or retailer, receives or possesses tobacco products |
|
|
without having a valid permit; |
|
|
(2) as a distributor, interstate warehouse, |
|
|
wholesaler, or retailer, receives or possesses tobacco products |
|
|
without having a permit posted where it can be easily seen by the |
|
|
public; |
|
|
(3) as a distributor, interstate warehouse, or |
|
|
wholesaler, does not deliver an invoice to the purchaser as |
|
|
required by Section 155.102; |
|
|
(4) as a distributor, interstate warehouse, |
|
|
wholesaler, or retailer, sells tobacco products without having a |
|
|
valid permit; or |
|
|
(5) as a bonded agent, interstate warehouse, or export |
|
|
warehouse, stores, distributes, or delivers tobacco products on |
|
|
which the tax has not been paid without having a valid permit. |
|
|
SECTION 11. (a) Section 161.124, Health and Safety Code, is |
|
|
repealed. |
|
|
(b) The following provisions of the Tax Code are repealed: |
|
|
(1) Section 154.1142; |
|
|
(2) Section 154.1143; |
|
|
(3) Section 155.0592; and |
|
|
(4) Section 155.0593. |
|
|
SECTION 12. Section 161.0901, Health and Safety Code, as |
|
|
added by this Act, applies only to a violation that occurs on or |
|
|
after the effective date of this Act. A violation that occurs |
|
|
before the effective date of this Act is governed by the law in |
|
|
effect on the date the violation occurred, and the former law is |
|
|
continued in effect for that purpose. |
|
|
SECTION 13. (a) Notwithstanding Section 147.0051, Health |
|
|
and Safety Code, as added by this Act, a person is not required to |
|
|
hold a permit under that section to engage in business as a retailer |
|
|
of e-cigarettes in this state until January 1, 2022. |
|
|
(b) The comptroller of public accounts shall prescribe the |
|
|
form and content of an application for a permit under Section |
|
|
147.0051, Health and Safety Code, as added by this Act, and begin |
|
|
accepting applications for the permit not later than October 1, |
|
|
2021. |
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SECTION 14. This Act takes effect September 1, 2021. |
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