Enrolled Bill Summary

House Bill 3475	House Author:  Guillen
Effective:  9-1-19	Senate Sponsor:  Hinojosa

            House Bill 3475 amends the Tax Code to revise and update statutory provisions relating to the administration, collection, and remittance of the cigars and tobacco products tax. The bill, among other provisions, does the following with respect to that tax:

·         makes a permitted distributor who makes a first sale to a permitted distributor in Texas liable for the tax and requires the distributor making the sale to pay the tax;

·         expands what constitutes a first sale;

·         excepts raw tobacco sold to a permitted manufacturer in Texas for the purpose of using the tobacco in manufacturing from taxation;

·         classifies an e-cigarette as a tobacco product;

·         provides for the permitting of a tobacco product export warehouse and prohibits a person from engaging in business as such unless the person has applied for and received that permit; and

·         provides the manner in which tobacco products may be sold or distributed by and between applicable permit holders.

House Bill 3475 makes it an offense for a person acting as a tobacco product export warehouse without having a valid permit to store, distribute, or deliver tobacco products on which taxes have not been paid. The bill makes the offense of nonpayment of tax regarding knowingly consuming, using, or smoking tobacco products without the tax being paid applicable without regard to the amount of tax due on the products. The bill provides for the combination of the offenses involving the possession of tobacco products, in violation of applicable state law, on which a tax is required to be paid of more than $50 and of $50 or less into a single offense.