By Thompson H.B. No. 3650
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 the taxation of tobacco products other than cigars and
1-3 cigarettes.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 155.001, Tax Code is amend to read as
1-6 follows:
1-7 Sec. 155.001. Definitions. In this chapter:
1-8 (1) "Bonded agent" means a person in this state who is
1-9 an agent of a person outside this state and receives cigars and
1-10 tobacco products in interstate commerce and stores the cigars and
1-11 tobacco products for distribution or delivery to distributors under
1-12 orders from the person outside this state.
1-13 (2) "Cigar" means a roll of fermented tobacco that is
1-14 wrapped in tobacco and the main stream of smoke from which produces
1-15 an alkaline reaction to litmus paper.
1-16 (3) "Common carrier" means a motor carrier registered
1-17 under Chapter 643, Transportation Code, or a motor carrier
1-18 operating under a certificate issued by the Interstate Commerce
1-19 Commission or a successor agency to the Interstate Commerce
1-20 Commission.
1-21 (4) "Consumer" means a person who possesses tobacco
1-22 products for personal consumption.
1-23 (5) "Distributor" means a person who:
2-1 (A) receives tobacco products for the purpose of
2-2 making a first sale in this state from a manufacturer outside the
2-3 state or within the state or otherwise brings or causes to be
2-4 brought into this state tobacco products for sale, use, or
2-5 consumption;
2-6 (B) manufactures or produces tobacco products;
2-7 or
2-8 (C) is an importer or import broker.
2-9 (6) "Export warehouse" means a person in this state
2-10 who receives tobacco products from manufacturers and stores the
2-11 tobacco products for the purpose of making sales to authorized
2-12 persons for resale, use, or consumption outside the United States.
2-13 (7) "First sale" means, except as otherwise provided
2-14 by this chapter:
2-15 (A) the first transfer of possession in
2-16 connection with a purchase, sale, or any exchange for value of
2-17 tobacco products in intrastate commerce;
2-18 (B) the first use or consumption of tobacco
2-19 products in this state; or
2-20 (C) the loss of tobacco products in this state
2-21 whether through negligence, theft, or other unaccountable loss.
2-22 (8) "Importer" or "import broker" means a person who
2-23 ships, transports, or imports into this state tobacco products
2-24 manufactured or produced outside the United States for the purpose
2-25 of making a first sale in this state.
2-26 (9) "Manufacturer" means a person who manufactures or
3-1 produces tobacco products and sells tobacco products to a
3-2 distributor.
3-3 (10) "Manufacturer's representative" means a person
3-4 employed by a manufacturer to sell or distribute the manufacturer's
3-5 tobacco products.
3-6 (11) "Permit holder" means a bonded agent,
3-7 distributor, wholesaler, or retailer required to obtain a permit
3-8 under Section 155.041.
3-9 (12) "Place of business" means:
3-10 (A) a commercial business location where tobacco
3-11 products are sold;
3-12 (B) a commercial business location where tobacco
3-13 products are kept for sale or consumption or otherwise stored; or
3-14 (C) a vehicle from which tobacco products are
3-15 sold.
3-16 (13) "Purchase Price" means the total amount for which
3-17 the tobacco products are sold to the distributor, valued in money,
3-18 without a deduction for the cost of:
3-19 (A) the product sold;
3-20 (B) the materials used, labor or service
3-21 employed, interest, losses, or other expenses; and
3-22 (C) the transportation of the product.
3-23 (D) "Purchase Price" does not include any of the
3-24 following if separately identified to the customer by such means as
3-25 an invoice, billing, sales slip or ticket, or contract:
3-26 (i) a cash discount allowed on the
4-1 purchase;
4-2 (ii) the amount charged for products
4-3 returned to the purchaser by its customers if the total amount
4-4 charged is refunded by cash or credit; or
4-5 (iii) finance, carrying, and service
4-6 charges, or interest from credit extended on sales of products
4-7 under a conditional sales contract or any other contract providing
4-8 for the deferred payment for the purchase price.
4-9 (14) "Retailer" means a person who engages in the
4-10 practice of selling tobacco products to consumers and includes the
4-11 owner of a coin-operated vending machine.
4-12 (15) [(14)] "Tobacco product" means:
4-13 (A) a cigar;
4-14 (B) smoking tobacco, including granulated,
4-15 plug-cut, crimp-cut, ready-rubbed, and any form of tobacco suitable
4-16 for smoking in a pipe or as a cigarette;
4-17 (C) chewing tobacco, including Cavendish, Twist,
4-18 plug, scrap, and any kind of tobacco suitable for chewing;
4-19 (D) snuff or other preparations of pulverized
4-20 tobacco; or
4-21 (E) an article or product that is made of
4-22 tobacco or a tobacco substitute and that is not a cigarette.
4-23 (16) [(15)] "Wholesaler" means a person, including a
4-24 manufacturer's representative, who sells or distributes tobacco
4-25 products in this state for resale but who is not a distributor.
4-26 SECTION 2. Amend Section 155.021 to read as follows:
5-1 Sec. 155.0211. Tax Imposed on Tobacco Products Other Than
5-2 Cigars. (a) A tax is imposed and becomes due and payable when a
5-3 distributor in this state [permit holder] receives or possesses
5-4 tobacco products other than cigars, for the purpose of making a
5-5 first sale in this state.
5-6 (b) The tax rate for tobacco products other than cigars is
5-7 40 [35.213] percent of the purchase price paid by the distributor
5-8 in (a) [manufacturer's list price, exclusive of any trade discount,
5-9 special discount, or deal].