LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
April 18, 2001
TO: Honorable Rene Oliveira, Chair, House Committee on Ways &
Means
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB3382 by Davis, Yvonne (Relating to the cigars and
tobacco products tax.), Committee Report 1st House,
Substituted
**************************************************************************
* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB3382, Committee Report 1st House, Substituted: positive impact *
* of $36,447,000 through the biennium ending August 31, 2003. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $18,492,000 *
* 2003 17,955,000 *
* 2004 17,037,000 *
* 2005 16,388,000 *
* 2006 15,730,000 *
****************************************************
All Funds, Five-Year Impact:
*****************************************************
* Fiscal Year Probable Revenue Gain/(Loss) to *
* General Revenue Fund *
* 0001 *
* 2002 $18,492,000 *
* 2003 17,955,000 *
* 2004 17,037,000 *
* 2005 16,388,000 *
* 2006 15,730,000 *
*****************************************************
Fiscal Analysis
The bill would amend Chapter 155 (Cigar and Tobacco Products Tax) of the
Tax Code by adding definitions for chewing tobacco, dry snuff, moist
snuff, pipe tobacco, roll-your-own tobacco and snuff; it would expand the
definition of tobacco product to include all of the preceding items.
The bill would change the tax structure for non-cigar tobacco products.
These products, currently taxed at 35.213 percent of the manufacturer's
list price, would be taxed at various rates based on their weight. Moist
snuff would be taxed at $0.72 per ounce, dry snuff would be taxed at
$0.46 per ounce, chewing tobacco would be taxed at $0.23 per ounce, pipe
tobacco would be taxed at $0.58 per ounce, and roll-your-own tobacco
would be taxed at $0.54 per ounce.
The bill would require each tobacco products distributor, wholesaler,
bonded agent, export warehouse, and retailer to include in its purchase
and receipt records the manufacturer's net weight for each non-cigar
tobacco product unit and the aggregate net weight of each of the products
listed on each invoice.
Tobacco products distributors and wholesalers would be required to
maintain records for each sale, distribution, exchange, or use of
non-cigar tobacco products. The records would have to show the
manufacturer's net weight for each unit and the aggregate net weight of
each of the products listed on each invoice.
Tobacco products manufacturers would be required to maintain records and
to submit reports showing, for each sale of non-cigar tobacco products,
the manufacturer's net weight for each unit and the aggregate net weight
of each of the products listed on each invoice.
Tobacco products distributors would be required to submit reports
showing, for each purchase, receipt, or acquisition of non-cigar tobacco
products, the manufacturer's net weight for each unit and the aggregate
net weight of each of the products listed on each invoice.
This bill would take effect September 1, 2001.
Methodology
The weight-based tax rates in this bill would result in additional
collections from the Cigar and Tobacco Products tax. The fiscal impact
of the tax rate increase is relative to the revenue as anticipated by the
2002-2003 Biennial Revenue Estimate, with adjustments made for potential
taxpayer compliance problems and collection lags.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 304 Comptroller of Public Accounts
LBB Staff: JK, SD