77R11693 DAK-D
By Davis of Dallas H.B. No. 3382
Substitute the following for H.B. No. 3382:
By Davis of Dallas C.S.H.B. No. 3382
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the cigars and tobacco products tax.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 155.001, Tax Code, is amended to read as
1-5 follows:
1-6 Sec. 155.001. DEFINITIONS. In this chapter:
1-7 (1) "Bonded agent" means a person in this state who is
1-8 an agent of a person outside this state and receives cigars and
1-9 tobacco products in interstate commerce and stores the cigars and
1-10 tobacco products for distribution or delivery to distributors under
1-11 orders from the person outside this state.
1-12 (2) "Chewing tobacco" means any leaf tobacco that is
1-13 intended to be placed in the mouth, including Cavendish, Twist,
1-14 plug, and scrap.
1-15 (3) "Cigar" means a roll of fermented tobacco that is
1-16 wrapped in tobacco and the main stream of smoke from which produces
1-17 an alkaline reaction to litmus paper.
1-18 (4) [(3)] "Common carrier" means a motor carrier
1-19 registered under Chapter 643, Transportation Code, or a motor
1-20 carrier operating under a certificate issued by the Interstate
1-21 Commerce Commission or a successor agency to the Interstate
1-22 Commerce Commission.
1-23 (5) [(4)] "Consumer" means a person who possesses
1-24 tobacco products for personal consumption.
2-1 (6) [(5)] "Distributor" means a person who:
2-2 (A) receives tobacco products for the purpose of
2-3 making a first sale in this state from a manufacturer outside the
2-4 state or within the state or otherwise brings or causes to be
2-5 brought into this state tobacco products for sale, use, or
2-6 consumption;
2-7 (B) manufactures or produces tobacco products;
2-8 or
2-9 (C) is an importer or import broker.
2-10 (7) "Dry snuff" means any snuff commonly known within
2-11 the tobacco industry as dry snuff.
2-12 (8) [(6)] "Export warehouse" means a person in this
2-13 state who receives tobacco products from manufacturers and stores
2-14 the tobacco products for the purpose of making sales to authorized
2-15 persons for resale, use, or consumption outside the United States.
2-16 (9) [(7)] "First sale" means, except as otherwise
2-17 provided by this chapter:
2-18 (A) the first transfer of possession in
2-19 connection with a purchase, sale, or any exchange for value of
2-20 tobacco products in intrastate commerce;
2-21 (B) the first use or consumption of tobacco
2-22 products in this state; or
2-23 (C) the loss of tobacco products in this state
2-24 whether through negligence, theft, or other unaccountable loss.
2-25 (10) [(8)] "Importer" or "import broker" means a
2-26 person who ships, transports, or imports into this state tobacco
2-27 products manufactured or produced outside the United States for the
3-1 purpose of making a first sale in this state.
3-2 (11) [(9)] "Manufacturer" means a person who
3-3 manufactures or produces tobacco products and sells tobacco
3-4 products to a distributor.
3-5 (12) [(10)] "Manufacturer's representative" means a
3-6 person employed by a manufacturer to sell or distribute the
3-7 manufacturer's tobacco products.
3-8 (13) "Moist snuff" means any snuff commonly known
3-9 within the tobacco industry as moist snuff.
3-10 (14) [(11)] "Permit holder" means a bonded agent,
3-11 distributor, wholesaler, or retailer required to obtain a permit
3-12 under Section 155.041.
3-13 (15) "Pipe tobacco" means any tobacco that, because of
3-14 its appearance, type, packaging, or labeling, is suitable for use
3-15 and likely to be offered to or purchased by a consumer as tobacco
3-16 to be smoked in a pipe.
3-17 (16) [(12)] "Place of business" means:
3-18 (A) a commercial business location where tobacco
3-19 products are sold;
3-20 (B) a commercial business location where tobacco
3-21 products are kept for sale or consumption or otherwise stored; or
3-22 (C) a vehicle from which tobacco products are
3-23 sold.
3-24 (17) [(13)] "Retailer" means a person who engages in
3-25 the practice of selling tobacco products to consumers and includes
3-26 the owner of a coin-operated vending machine.
3-27 (18) "Roll-your-own tobacco" means any tobacco that,
4-1 because of its appearance, type, packaging, or labeling, is
4-2 suitable for use and likely to be offered to or purchased by a
4-3 consumer as tobacco for making cigarettes.
4-4 (19) "Snuff" means any finely cut, ground, or powdered
4-5 tobacco that is intended to be placed in the mouth.
4-6 (20) [(14)] "Tobacco product" means:
4-7 (A) a cigar;
4-8 (B) smoking tobacco, including pipe tobacco,
4-9 roll-your-own tobacco, granulated, plug-cut, crimp-cut,
4-10 ready-rubbed, and any form of tobacco suitable for smoking in a
4-11 pipe or as a cigarette;
4-12 (C) chewing tobacco[, including Cavendish,
4-13 Twist, plug, scrap, and any kind of tobacco suitable for chewing];
4-14 (D) snuff or other preparations of pulverized
4-15 tobacco; or
4-16 (E) an article or product that is made of
4-17 tobacco or a tobacco substitute and that is not a cigarette.
4-18 (21) [(15)] "Wholesaler" means a person, including a
4-19 manufacturer's representative, who sells or distributes tobacco
4-20 products in this state for resale but who is not a distributor.
4-21 SECTION 2. Section 155.0211, Tax Code, is amended by amending
4-22 Subsection (b) and adding Subsections (c), (d), and (e) to read as
4-23 follows:
4-24 (b) The tax rate for tobacco products other than cigars,
4-25 moist snuff, dry snuff, chewing tobacco, pipe tobacco, and
4-26 roll-your-own tobacco is 35.213 percent of the manufacturer's list
4-27 price, exclusive of any trade discount, special discount, or deal.
5-1 (c) The tax rate for each can or package of the following
5-2 tobacco products is:
5-3 (1) moist snuff, 72 cents per ounce and a
5-4 proportionate tax rate on all fractional parts of an ounce;
5-5 (2) dry snuff, 46 cents per ounce and a proportionate
5-6 tax rate on all fractional parts of an ounce;
5-7 (3) chewing tobacco, 23 cents per ounce and a
5-8 proportionate tax rate on all fractional parts of an ounce;
5-9 (4) pipe tobacco, 58 cents per ounce and a
5-10 proportionate tax rate on all fractional parts of an ounce; and
5-11 (5) roll-your-own tobacco, 54 cents per ounce and a
5-12 proportionate tax on all fractional parts of an ounce.
5-13 (d) For purposes of Subsection (c), the tax on moist snuff,
5-14 dry snuff, chewing tobacco, pipe tobacco, and roll-your-own tobacco
5-15 shall be computed based on the net weight as listed by the
5-16 manufacturer. The total tax to be imposed on a multi-unit package
5-17 is the sum of the taxes imposed by Subsection (c) on each
5-18 individual package intended for sale or distribution at retail.
5-19 (e) An ambiguity regarding the proper classification of a
5-20 tobacco product for purposes of taxation under this section shall
5-21 be resolved by reference to the classification of the tobacco
5-22 product for federal tobacco tax purposes.
5-23 SECTION 3. Section 155.101, Tax Code, is amended to read as
5-24 follows:
5-25 Sec. 155.101. RECORD OF PURCHASE OR RECEIPT. Each
5-26 distributor, wholesaler, bonded agent, and export warehouse shall
5-27 keep records at each place of business of all tobacco products
6-1 purchased or received. Each retailer shall keep records at a
6-2 single location, which the retailer shall designate as its
6-3 principal place of business in the state, of all tobacco products
6-4 purchased and received. These records must include the following,
6-5 except that Subdivision (7) applies to distributors only and
6-6 Subdivisions (8) and (9) apply to the purchase or receipt of moist
6-7 snuff, dry snuff, chewing tobacco, pipe tobacco, and roll-your-own
6-8 tobacco only:
6-9 (1) the name and address of the shipper or carrier and
6-10 the mode of transportation;
6-11 (2) all shipping records or copies of records,
6-12 including invoices, bills of lading, waybills, freight bills, and
6-13 express receipts;
6-14 (3) the date and the name of the place of origin of
6-15 the tobacco product shipment;
6-16 (4) the date and the name of the place of arrival of
6-17 the tobacco product shipment;
6-18 (5) a statement of the number, kind, and price paid
6-19 for the tobacco products;
6-20 (6) the name, address, permit number, and tax
6-21 identification number of the seller;
6-22 (7) the manufacturer's list price for the tobacco
6-23 products; [and]
6-24 (8) the net weight as listed by the manufacturer for
6-25 each unit;
6-26 (9) the aggregate net weight of moist snuff, dry
6-27 snuff, chewing tobacco, pipe tobacco, and roll-your-own tobacco,
7-1 respectively, listed on each invoice; and
7-2 (10) any other information required by rules of the
7-3 comptroller.
7-4 SECTION 4. Section 155.102, Tax Code, is amended by adding
7-5 Subsection (c) to read as follows:
7-6 (c) In addition to the information required under Subsection
7-7 (b), the records for each sale, distribution, exchange, or use of
7-8 moist snuff, dry snuff, chewing tobacco, pipe tobacco, and
7-9 roll-your-own tobacco must show:
7-10 (1) the net weight as listed by the manufacturer for
7-11 each unit; and
7-12 (2) the aggregate net weight of moist snuff, dry
7-13 snuff, chewing tobacco, pipe tobacco, and roll-your-own tobacco,
7-14 respectively, listed on each invoice.
7-15 SECTION 5. Section 155.103, Tax Code, is amended by amending
7-16 Subsection (b) and adding Subsection (c) to read as follows:
7-17 (b) In addition to the information required under Subsection
7-18 (a), the records for each sale of moist snuff, dry snuff, chewing
7-19 tobacco, pipe tobacco, and roll-your-own tobacco must show:
7-20 (1) the net weight as listed by the manufacturer for
7-21 each unit; and
7-22 (2) the aggregate net weight of moist snuff, dry
7-23 snuff, chewing tobacco, pipe tobacco, and roll-your-own tobacco,
7-24 respectively, listed on each invoice.
7-25 (c) A manufacturer who sells tobacco products to a permit
7-26 holder in this state shall file with the comptroller, on or before
7-27 the last day of each month, a report showing the information
8-1 required to be listed by Subsections [in Subsection] (a) and (b),
8-2 if applicable, for the previous month.
8-3 SECTION 6. Section 155.111, Tax Code, is amended by amending
8-4 Subsection (c) and adding Subsection (d) to read as follows:
8-5 (c) In addition to the information required under Subsection
8-6 (b), for moist snuff, dry snuff, chewing tobacco, pipe tobacco, and
8-7 roll-your-own tobacco purchased, received, or acquired, the report
8-8 must show:
8-9 (1) the net weight as listed by the manufacturer for
8-10 each unit; and
8-11 (2) the aggregate net weight of moist snuff, dry
8-12 snuff, chewing tobacco, pipe tobacco, and roll-your-own tobacco,
8-13 respectively, listed on each invoice.
8-14 (d) The comptroller shall prescribe the form and content of
8-15 the report.
8-16 SECTION 7. (a) This Act takes effect September 1, 2001.
8-17 (b) The change in law made by this Act does not affect taxes
8-18 imposed before the effective date of this Act, and the law in
8-19 effect before the effective date of this Act is continued in effect
8-20 for purposes of the liability for and collection of those taxes.