By: Ellis S.B. No. 1688
2001S0807/1
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 amended 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) "Chewing tobacco" means any leaf tobacco that is
1-14 intended to be placed in the mouth, including Cavendish, Twist,
1-15 plug, and scrap.
1-16 (3) "Cigar" means a roll of fermented tobacco that is
1-17 wrapped in tobacco and the main stream of smoke from which produces
1-18 an alkaline reaction to litmus paper.
1-19 (4) [(3)] "Common carrier" means a motor carrier
1-20 registered under Chapter 643, Transportation Code, or a motor
1-21 carrier operating under a certificate issued by the Interstate
1-22 Commerce Commission or a successor agency to the Interstate
1-23 Commerce Commission.
1-24 (5) [(4)] "Consumer" means a person who possesses
1-25 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
3-1 products manufactured or produced outside the United States for the
3-2 purpose of making a first sale in this state.
3-3 (11) [(9)] "Manufacturer" means a person who
3-4 manufactures or produces tobacco products and sells tobacco
3-5 products to a distributor.
3-6 (12) [(10)] "Manufacturer's representative" means a
3-7 person employed by a manufacturer to sell or distribute the
3-8 manufacturer's tobacco products.
3-9 (13) "Moist snuff" means any snuff commonly known
3-10 within the tobacco industry as moist snuff.
3-11 (14) [(11)] "Permit holder" means a bonded agent,
3-12 distributor, wholesaler, or retailer required to obtain a permit
3-13 under Section 155.041.
3-14 (15) "Pipe tobacco" means any tobacco that, because of
3-15 its appearance, type, packaging, or labeling, is suitable for use
3-16 as and likely to be offered to or purchased by a consumer as
3-17 tobacco to be smoked in a pipe.
3-18 (16) [(12)] "Place of business" means:
3-19 (A) a commercial business location where tobacco
3-20 products are sold;
3-21 (B) a commercial business location where tobacco
3-22 products are kept for sale or consumption or otherwise stored; or
3-23 (C) a vehicle from which tobacco products are
3-24 sold.
3-25 (17) [(13)] "Retailer" means a person who engages in
3-26 the practice of selling tobacco products to consumers and includes
4-1 the owner of a coin-operated vending machine.
4-2 (18) "Roll-your-own tobacco" means any tobacco that,
4-3 because of its appearance, type, packaging, or labeling, is
4-4 suitable for use as and likely to be offered to or purchased by a
4-5 consumer as tobacco for making cigarettes.
4-6 (19) "Snuff" means any finely cut, ground, or powdered
4-7 tobacco that is intended to be placed in the mouth.
4-8 (20) [(14)] "Tobacco product" means:
4-9 (A) a cigar;
4-10 (B) smoking tobacco, including pipe tobacco,
4-11 roll-your-own tobacco, granulated, plug-cut, crimp-cut,
4-12 ready-rubbed, and any form of tobacco suitable for smoking in a
4-13 pipe or as a cigarette;
4-14 (C) chewing tobacco[, including Cavendish,
4-15 Twist, plug, scrap, and any kind of tobacco suitable for chewing];
4-16 (D) snuff or other preparations of pulverized
4-17 tobacco; or
4-18 (E) an article or product that is made of
4-19 tobacco or a tobacco substitute and that is not a cigarette.
4-20 (21) [(15)] "Wholesaler" means a person, including a
4-21 manufacturer's representative, who sells or distributes tobacco
4-22 products in this state for resale but who is not a distributor.
4-23 SECTION 2. Section 155.0211, Tax Code, is amended by
4-24 amending Subsection (b) and adding Subsections (c), (d), and (e) to
4-25 read as follows:
4-26 (b) The tax rate for tobacco products other than cigars,
5-1 moist snuff, dry snuff, chewing tobacco, pipe tobacco, and
5-2 roll-your-own tobacco is 35.213 percent of the manufacturer's list
5-3 price, exclusive of any trade discount, special discount, or deal.
5-4 (c) The tax rate for each can or package of the following
5-5 tobacco products is:
5-6 (1) for moist snuff, 58 cents per ounce and a
5-7 proportionate tax rate on all fractional parts of an ounce;
5-8 (2) for dry snuff, 33 cents per ounce and a
5-9 proportionate tax rate on all fractional parts of an ounce;
5-10 (3) for chewing tobacco, 16 cents per ounce and a
5-11 proportionate tax rate on all fractional parts of an ounce;
5-12 (4) for pipe tobacco, 42 cents per ounce and a
5-13 proportionate tax rate on all fractional parts of an ounce; and
5-14 (5) for roll-your-own tobacco, 39 cents per ounce and
5-15 a proportionate tax on all fractional parts of an ounce.
5-16 (d) For purposes of Subsection (c), the tax on moist snuff,
5-17 dry snuff, chewing tobacco, pipe tobacco, and roll-your-own tobacco
5-18 shall be computed based on the net weight as listed by the
5-19 manufacturer. The total tax to be imposed on a multiunit package
5-20 is the sum of the taxes imposed by Subsection (c) on each
5-21 individual package intended for sale or distribution at retail.
5-22 (e) An ambiguity regarding the proper classification of a
5-23 tobacco product for purposes of taxation under this section shall
5-24 be resolved by reference to the classification of the tobacco
5-25 product for federal tobacco tax purposes.
5-26 SECTION 3. Section 155.101, Tax Code, is amended to read as
6-1 follows:
6-2 Sec. 155.101. RECORD OF PURCHASE OR RECEIPT. Each
6-3 distributor, wholesaler, bonded agent, and export warehouse shall
6-4 keep records at each place of business of all tobacco products
6-5 purchased or received. Each retailer shall keep records at a
6-6 single location, which the retailer shall designate as its
6-7 principal place of business in the state, of all tobacco products
6-8 purchased and received. These records must include the following,
6-9 except that Subdivision (7) applies to distributors only and
6-10 Subdivisions (8) and (9) apply to the purchase or receipt of moist
6-11 snuff, dry snuff, chewing tobacco, pipe tobacco, and roll-your-own
6-12 tobacco only:
6-13 (1) the name and address of the shipper or carrier and
6-14 the mode of transportation;
6-15 (2) all shipping records or copies of records,
6-16 including invoices, bills of lading, waybills, freight bills, and
6-17 express receipts;
6-18 (3) the date and the name of the place of origin of
6-19 the tobacco product shipment;
6-20 (4) the date and the name of the place of arrival of
6-21 the tobacco product shipment;
6-22 (5) a statement of the number, kind, and price paid
6-23 for the tobacco products;
6-24 (6) the name, address, permit number, and tax
6-25 identification number of the seller;
6-26 (7) the manufacturer's list price for the tobacco
7-1 products; [and]
7-2 (8) the net weight as listed by the manufacturer for
7-3 each unit;
7-4 (9) the aggregate net weight of moist snuff, dry
7-5 snuff, chewing tobacco, pipe tobacco, and roll-your-own tobacco,
7-6 respectively, listed on each invoice; and
7-7 (10) any other information required by rules of the
7-8 comptroller.
7-9 SECTION 4. Section 155.102, Tax Code, is amended by adding
7-10 Subsection (c) to read as follows:
7-11 (c) In addition to the information required under Subsection
7-12 (b), the records for each sale, distribution, exchange, or use of
7-13 moist snuff, dry snuff, chewing tobacco, pipe tobacco, and
7-14 roll-your-own tobacco must show:
7-15 (1) the net weight as listed by the manufacturer for
7-16 each unit; and
7-17 (2) the aggregate net weight of moist snuff, dry
7-18 snuff, chewing tobacco, pipe tobacco, and roll-your-own tobacco,
7-19 respectively, listed on each invoice.
7-20 SECTION 5. Section 155.103, Tax Code, is amended by amending
7-21 Subsection (b) and adding Subsection (c) to read as follows:
7-22 (b) In addition to the information required under Subsection
7-23 (a), the records for each sale of moist snuff, dry snuff, chewing
7-24 tobacco, pipe tobacco, and roll-your-own tobacco must show:
7-25 (1) the net weight as listed by the manufacturer for
7-26 each unit; and
8-1 (2) the aggregate net weight of moist snuff, dry
8-2 snuff, chewing tobacco, pipe tobacco, and roll-your-own tobacco,
8-3 respectively, listed on each invoice.
8-4 (c) A manufacturer who sells tobacco products to a permit
8-5 holder in this state shall file with the comptroller, on or before
8-6 the last day of each month, a report showing the information
8-7 required to be listed by Subsections [in Subsection] (a) and (b),
8-8 if applicable, for the previous month.
8-9 SECTION 6. Section 155.111, Tax Code, is amended by amending
8-10 Subsection (c) and adding Subsection (d) to read as follows:
8-11 (c) In addition to the information required under Subsection
8-12 (b), for moist snuff, dry snuff, chewing tobacco, pipe tobacco, and
8-13 roll-your-own tobacco purchased, received, or acquired, the report
8-14 must show:
8-15 (1) the net weight as listed by the manufacturer for
8-16 each unit; and
8-17 (2) the aggregate net weight of moist snuff, dry
8-18 snuff, chewing tobacco, pipe tobacco, and roll-your-own tobacco,
8-19 respectively, listed on each invoice.
8-20 (d) The comptroller shall prescribe the form and content of
8-21 the report.
8-22 SECTION 7. (a) This Act takes effect September 1, 2001.
8-23 (b) The change in law made by this Act does not affect taxes
8-24 imposed before the effective date of this Act, and the law in
8-25 effect before the effective date of this Act is continued in effect
8-26 for purposes of the liability for and collection of those taxes.