LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 77th Regular Session
  
                              April 2, 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 state taxes.), As
               Introduced
  
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*  No significant fiscal implication to the State is anticipated.        *
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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 $0.58 per ounce, dry snuff would be taxed at
$0.33 per ounce, chewing tobacco would be taxed at $0.16 per ounce, pipe
tobacco would be taxed at $0.42 per ounce, and roll-your-own tobacco
would be taxed at $0.39 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.

For non-cigar tobacco products, the new weight-based tax rates would
generate the same Cigar and Tobacco Products tax revenue as in the
2002-2003 Biennial Revenue Estimate.

The bill would take effect September 1, 2001.
  
Local Government Impact
  
No fiscal implication to units of local government is anticipated.
  
  
Source Agencies:   304   Comptroller of Public Accounts
LBB Staff:         JK, SD