By Davis of Dallas H.B. No. 3382
Line and page numbers may not match official copy.
Bill not drafted by TLC or Senate E&E.
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to state taxes.
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
2-1 tobacco products for personal consumption.
2-2 (6) [(5)] "Distributor" means a person who:
2-3 (A) receives tobacco products for the purpose of
2-4 making a first sale in this state from a manufacturer outside the
2-5 state or within the state or otherwise brings or causes to be
2-6 brought into this state tobacco products for sale, use, or
2-7 consumption;
2-8 (B) manufactures or produces tobacco products;
2-9 or
2-10 (C) is an importer or import broker.
2-11 (7) "Dry snuff" means any snuff commonly known within
2-12 the tobacco industry as dry snuff.
2-13 (8) [(6)] "Export warehouse" means a person in this
2-14 state who receives tobacco products from manufacturers and stores
2-15 the tobacco products for the purpose of making sales to authorized
2-16 persons for resale, use, or consumption outside the United States.
2-17 (9) [(7)] "First sale" means, except as otherwise
2-18 provided by this chapter:
2-19 (A) the first transfer of possession in
2-20 connection with a purchase, sale, or any exchange for value of
2-21 tobacco products in intrastate commerce;
2-22 (B) the first use or consumption of tobacco
2-23 products in this state; or
2-24 (C) the loss of tobacco products in this state
2-25 whether through negligence, theft, or other unaccountable loss.
2-26 (10) [(8)] "Importer" or "import broker" means a
3-1 person who ships, transports, or imports into this state tobacco
3-2 products manufactured or produced outside the United States for the
3-3 purpose of making a first sale in this state.
3-4 (11) [(9)] "Manufacturer" means a person who
3-5 manufactures or produces tobacco products and sells tobacco
3-6 products to a distributor.
3-7 (12) [(10)] "Manufacturer's representative" means a
3-8 person employed by a manufacturer to sell or distribute the
3-9 manufacturer's tobacco products.
3-10 (13) "Moist snuff" means any snuff commonly known
3-11 within the tobacco industry as moist snuff.
3-12 (14) [(11)] "Permit holder" means a bonded agent,
3-13 distributor, wholesaler, or retailer required to obtain a permit
3-14 under Section 155.041.
3-15 (15) "Pipe tobacco" means any tobacco that, because of
3-16 its appearance, type, packaging, or labeling, is suitable for use
3-17 and likely to be offered to or purchased by a consumer as tobacco
3-18 to be smoked in a pipe.
3-19 (16) [(12)] "Place of business" means:
3-20 (A) a commercial business location where tobacco
3-21 products are sold;
3-22 (B) a commercial business location where tobacco
3-23 products are kept for sale or consumption or otherwise stored; or
3-24 (C) a vehicle from which tobacco products are
3-25 sold.
3-26 (17) [(13)] "Retailer" means a person who engages in
4-1 the practice of selling tobacco products to consumers and includes
4-2 the owner of a coin-operated vending machine.
4-3 (18) "Roll-your-own tobacco" means any tobacco that,
4-4 because of its appearance, type, packaging, or labeling, is
4-5 suitable for use and likely to be offered to or purchased by a
4-6 consumer as tobacco for making cigarettes.
4-7 (19) "Snuff" means any finely cut, ground, or powdered
4-8 tobacco that is intended to be placed in the mouth.
4-9 (20) [(14)] "Tobacco product" means:
4-10 (A) a cigar;
4-11 (B) smoking tobacco, including pipe tobacco,
4-12 roll-your-own tobacco, granulated, plug-cut, crimp-cut,
4-13 ready-rubbed, and any form of tobacco suitable for smoking in a
4-14 pipe or as a cigarette;
4-15 (C) chewing tobacco[, including Cavendish,
4-16 Twist, plug, scrap, and any kind of tobacco suitable for chewing];
4-17 (D) snuff or other preparations of pulverized
4-18 tobacco; or
4-19 (E) an article or product that is made of
4-20 tobacco or a tobacco substitute and that is not a cigarette.
4-21 (21) [(15)] "Wholesaler" means a person, including a
4-22 manufacturer's representative, who sells or distributes tobacco
4-23 products in this state for resale but who is not a distributor.
4-24 SECTION 2. Section 155.0211, Tax Code, is amended by amending
4-25 Subsection (b) and adding Subsections (c), (d), and (e) to read as
4-26 follows:
5-1 (b) The tax rate for tobacco products other than cigars,
5-2 moist snuff, dry snuff, chewing tobacco, pipe tobacco, and
5-3 roll-your-own tobacco is 35.213 percent of the manufacturer's list
5-4 price, exclusive of any trade discount, special discount, or deal.
5-5 (c) The tax rate for each can or package of the following
5-6 tobacco products is:
5-7 (1) moist snuff, 58 cents per ounce and a
5-8 proportionate tax rate on all fractional parts of an ounce;
5-9 (2) dry snuff, 33 cents per ounce and a proportionate
5-10 tax rate on all fractional parts of an ounce;
5-11 (3) chewing tobacco, 16 cents per ounce and a
5-12 proportionate tax rate on all fractional parts of an ounce;
5-13 (4) pipe tobacco, 42 cents per ounce and a
5-14 proportionate tax rate on all fractional parts of an ounce; and
5-15 (5) roll-your-own tobacco, 39 cents per ounce and a
5-16 proportionate tax on all fractional parts of an ounce.
5-17 (d) For purposes of Subsection (c), the tax on moist snuff,
5-18 dry snuff, chewing tobacco, pipe tobacco, and roll-your-own tobacco
5-19 shall be computed based on the net weight as listed by the
5-20 manufacturer. The total tax to be imposed on a multi-unit package
5-21 is the sum of the taxes imposed by Subsection (c) on each
5-22 individual package intended for sale or distribution at retail.
5-23 (e) An ambiguity regarding the proper classification of a
5-24 tobacco product for purposes of taxation under this section shall
5-25 be resolved by reference to the classification of the tobacco
5-26 product for federal tobacco tax purposes.
6-1 SECTION 3. Section 155.101, Tax Code, is amended to read as
6-2 follows:
6-3 Sec. 155.101. RECORD OF PURCHASE OR RECEIPT. Each
6-4 distributor, wholesaler, bonded agent, and export warehouse shall
6-5 keep records at each place of business of all tobacco products
6-6 purchased or received. Each retailer shall keep records at a
6-7 single location, which the retailer shall designate as its
6-8 principal place of business in the state, of all tobacco products
6-9 purchased and received. These records must include the following,
6-10 except that Subdivision (7) applies to distributors only and
6-11 Subdivisions (8) and (9) apply to the purchase or receipt of moist
6-12 snuff, dry snuff, chewing tobacco, pipe tobacco, and roll-your-own
6-13 tobacco only:
6-14 (1) the name and address of the shipper or carrier and
6-15 the mode of transportation;
6-16 (2) all shipping records or copies of records,
6-17 including invoices, bills of lading, waybills, freight bills, and
6-18 express receipts;
6-19 (3) the date and the name of the place of origin of
6-20 the tobacco product shipment;
6-21 (4) the date and the name of the place of arrival of
6-22 the tobacco product shipment;
6-23 (5) a statement of the number, kind, and price paid
6-24 for the tobacco products;
6-25 (6) the name, address, permit number, and tax
6-26 identification number of the seller;
7-1 (7) the manufacturer's list price for the tobacco
7-2 products; [and]
7-3 (8) the net weight as listed by the manufacturer for
7-4 each unit;
7-5 (9) the aggregate net weight of moist snuff, dry
7-6 snuff, chewing tobacco, pipe tobacco, and roll-your-own tobacco,
7-7 respectively, listed on each invoice; and
7-8 (10) any other information required by rules of the
7-9 comptroller.
7-10 SECTION 4. Section 155.102, Tax Code, is amended by adding
7-11 Subsection (c) to read as follows:
7-12 (c) In addition to the information required under Subsection
7-13 (b), the records for each sale, distribution, exchange, or use of
7-14 moist snuff, dry snuff, chewing tobacco, pipe tobacco, and
7-15 roll-your-own tobacco must show:
7-16 (1) the net weight as listed by the manufacturer for
7-17 each unit; and
7-18 (2) the aggregate net weight of moist snuff, dry
7-19 snuff, chewing tobacco, pipe tobacco, and roll-your-own tobacco,
7-20 respectively, listed on each invoice.
7-21 SECTION 5. Section 155.103, Tax Code, is amended by amending
7-22 Subsection (b) and adding Subsection (c) to read as follows:
7-23 (b) In addition to the information required under Subsection
7-24 (a), the records for each sale of moist snuff, dry snuff, chewing
7-25 tobacco, pipe tobacco, and roll-your-own tobacco must show:
7-26 (1) the net weight as listed by the manufacturer for
8-1 each unit; and
8-2 (2) the aggregate net weight of moist snuff, dry
8-3 snuff, chewing tobacco, pipe tobacco, and roll-your-own tobacco,
8-4 respectively, listed on each invoice.
8-5 (c) A manufacturer who sells tobacco products to a permit
8-6 holder in this state shall file with the comptroller, on or before
8-7 the last day of each month, a report showing the information
8-8 required to be listed by Subsections [in Subsection] (a) and (b),
8-9 if applicable, for the previous month.
8-10 SECTION 6. Section 155.111, Tax Code, is amended by amending
8-11 Subsection (c) and adding Subsection (d) to read as follows:
8-12 (c) In addition to the information required under Subsection
8-13 (b), for moist snuff, dry snuff, chewing tobacco, pipe tobacco, and
8-14 roll-your-own tobacco purchased, received, or acquired, the report
8-15 must show:
8-16 (1) the net weight as listed by the manufacturer for
8-17 each unit; and
8-18 (2) the aggregate net weight of moist snuff, dry
8-19 snuff, chewing tobacco, pipe tobacco, and roll-your-own tobacco,
8-20 respectively, listed on each invoice.
8-21 (d) The comptroller shall prescribe the form and content of
8-22 the report.
8-23 SECTION 7. (a) This Act takes effect September 1, 2001.
8-24 (b) The change in law made by this Act does not affect taxes
8-25 imposed before the effective date of this Act, and the law in
8-26 effect before the effective date of this Act is continued in effect
9-1 for purposes of the liability for and collection of those taxes.