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A BILL TO BE ENTITLED
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AN ACT
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relating to the administration, collection, and remittance of the |
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cigars and tobacco products tax; requiring a permit. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 155.001, Tax Code, is amended by |
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amending Subdivisions (1), (6), (7), (8), (9), (10), (11), (12), |
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(13), (14), and (15) and adding Subdivisions (6-a) and (13-a) to |
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read as follows: |
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(1) "Bonded agent" means a person in this state who is |
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a third-party [an] agent of a manufacturer [person] outside this |
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state and who receives [cigars and] tobacco products in interstate |
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commerce and stores the [cigars and] tobacco products for |
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distribution or delivery to distributors under orders from the |
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manufacturer [person outside this state]. |
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(6) "Distributor" means a person who: |
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(A) receives untaxed tobacco products for the |
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purpose of making a first sale in this state from a manufacturer |
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outside the state or within the state or otherwise brings or causes |
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to be brought into this state untaxed tobacco products for sale, |
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use, or consumption; |
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(B) manufactures or produces tobacco products; |
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or |
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(C) is an importer [or import broker]. |
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(6-a) "Engage in business" means, in relation to |
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tobacco products, engaging by a person, either directly or through |
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a representative, in any of the following activities: |
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(A) selling tobacco products in or into this |
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state; |
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(B) using a warehouse or another location to |
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store tobacco products; or |
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(C) otherwise conducting through a physical |
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presence tobacco product-related business in this state. |
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(7) "Export warehouse" means a person in this state |
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who receives untaxed tobacco products from manufacturers and stores |
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the tobacco products for the purpose of making sales to authorized |
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persons for resale, use, or consumption outside the United States. |
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(8) "First sale" means, except as otherwise provided |
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by this chapter: |
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(A) the first transfer of possession in |
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connection with a purchase, sale, or any exchange for value of |
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tobacco products in or into this state, which: |
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(i) includes the sale of tobacco products |
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by: |
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(a) a distributor in or outside this |
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state to a distributor, wholesaler, or retailer in this state; and |
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(b) a manufacturer in this state who |
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transfers the tobacco products in this state; and |
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(ii) does not include: |
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(a) the sale of tobacco products by a |
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manufacturer outside this state to a distributor in this state; or |
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(b) the transfer of tobacco products |
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from a manufacturer outside this state to a bonded agent in this |
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state [in intrastate commerce]; |
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(B) the first use or consumption of tobacco |
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products in this state; or |
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(C) the loss of tobacco products in this state |
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whether through negligence, theft, or other unaccountable loss. |
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(9) "Importer" [or "import broker"] means a person who |
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ships, transports, or imports into this state tobacco products |
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manufactured or produced outside the United States for the purpose |
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of making a first sale in this state. |
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(10) "Manufacturer" means a person who manufactures, |
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fabricates, or assembles tobacco products, or causes or arranges |
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for the manufacture, fabrication, or assembly of tobacco products, |
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for sale or distribution [or produces tobacco products and sells
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tobacco products to a distributor]. |
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(11) "Manufacturer's representative" means a person |
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employed by a manufacturer to sell or distribute the manufacturer's |
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tobacco products for which the tax imposed under this chapter has |
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been paid. |
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(12) "Permit holder" means a bonded agent, |
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distributor, wholesaler, manufacturer, importer, export warehouse, |
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or retailer who obtains [required to obtain] a permit under Section |
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155.041. |
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(13) "Place of business" means: |
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(A) a commercial business location where tobacco |
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products are sold; |
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(B) a commercial business location where tobacco |
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products are kept for sale or consumption or otherwise stored; [or] |
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(C) a vehicle from which tobacco products are |
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sold; or |
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(D) a vending machine from which tobacco products |
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are sold. |
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(13-a) "Raw tobacco" means any part of the tobacco |
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plant, including the tobacco leaf or stem, that is harvested from |
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the ground and is not a tobacco product as the term is defined in |
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this chapter. |
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(14) "Retailer" means a person who engages in the |
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business [practice] of selling tobacco products to consumers and |
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includes the owner of a [coin-operated] vending machine. |
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(15) "Tobacco product" means: |
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(A) a cigar; |
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(B) smoking tobacco, including granulated, |
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plug-cut, crimp-cut, ready-rubbed, and any form of tobacco suitable |
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for smoking in a pipe or as a cigarette; |
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(C) chewing tobacco, including Cavendish, Twist, |
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plug, scrap, and any kind of tobacco suitable for chewing; |
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(D) snuff or other preparations of pulverized |
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tobacco; or |
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(E) an article or product that is made of tobacco |
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or a tobacco substitute and that is not a cigarette or an |
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e-cigarette as defined by Section 161.081, Health and Safety Code. |
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SECTION 2. Subchapter B, Chapter 155, Tax Code, is amended |
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by adding Sections 155.0212, 155.025, and 155.028 to read as |
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follows: |
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Sec. 155.0212. LIABILITY OF PERMITTED DISTRIBUTOR. A |
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permitted distributor who makes a first sale to a permitted |
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distributor in this state is liable for and shall pay the tax |
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imposed by this chapter. |
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Sec. 155.025. MANUFACTURING EXEMPTION. Raw tobacco sold to |
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a permitted manufacturer in this state for the purpose of using the |
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tobacco in manufacturing is not subject to the taxes imposed by this |
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chapter. |
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Sec. 155.028. IMPACT OF TAX. The ultimate consumer or user |
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in this state bears the impact of the tax imposed by this chapter. |
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If another person pays the tax, the amount of the tax is added to the |
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price charged to the ultimate consumer or user. |
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SECTION 3. Sections 155.041(a), (b), and (h), Tax Code, are |
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amended to read as follows: |
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(a) A person may not engage in business as a distributor, |
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wholesaler, bonded agent, manufacturer, export warehouse, |
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importer, or retailer unless the person has applied for and |
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received the applicable permit from the comptroller. |
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(b) Each distributor, wholesaler, bonded agent, |
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manufacturer, export warehouse, importer, or retailer shall obtain |
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a permit for each place of business owned or operated by the |
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distributor, wholesaler, bonded agent, manufacturer, export |
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warehouse, importer, or retailer. |
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(h) Permits for engaging in business as a distributor, |
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wholesaler, bonded agent, manufacturer, export warehouse, |
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importer, or retailer shall be governed exclusively by the |
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provisions of this code. |
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SECTION 4. Section 155.0415, Tax Code, is amended by |
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amending Subsection (a) and adding Subsections (c), (d), (e), (f), |
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(g), (h), and (i) to read as follows: |
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(a) Except for retail sales to consumers, tobacco products |
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may only be sold or distributed by and between permit holders as |
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provided by this section. |
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(c) A manufacturer outside this state who is not a permitted |
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distributor may sell tobacco products only to a permitted |
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distributor. |
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(d) A permitted distributor may sell tobacco products only |
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to a permitted distributor, wholesaler, or retailer. |
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(e) A permitted importer may sell tobacco products only to a |
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permitted distributor, wholesaler, or retailer. |
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(f) A permitted wholesaler may sell tobacco products only to |
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a permitted distributor, wholesaler, or retailer. |
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(g) A permitted retailer may sell tobacco products only to |
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the consumer and may purchase tobacco products only from a |
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permitted distributor or wholesaler in this state. |
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(h) A permitted export warehouse may sell tobacco products |
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only to persons authorized to sell or consume untaxed tobacco |
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products outside the United States. |
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(i) A manufacturer's representative may sell tobacco |
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products only to a permitted distributor, wholesaler, or retailer. |
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SECTION 5. The heading to Section 155.049, Tax Code, is |
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amended to read as follows: |
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Sec. 155.049. PERMIT [LICENSING] YEAR; FEES. |
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SECTION 6. Section 155.049, Tax Code, is amended by adding |
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Subsections (c) and (g) to read as follows: |
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(c) A fee is not required for an export warehouse permit. |
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(g) A person issued a permit for a place of business that |
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permanently closes before the permit expiration date is not |
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entitled to a refund of the permit fee. |
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SECTION 7. Section 155.101, Tax Code, is amended to read as |
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follows: |
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Sec. 155.101. RECORD OF PURCHASE OR RECEIPT. Each |
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distributor, wholesaler, bonded agent, and export warehouse shall |
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keep records at each place of business of all tobacco products |
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purchased or received. Each retailer shall keep records at a |
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single commercial business location, which the retailer shall |
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designate as its principal place of business in the state, of all |
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tobacco products purchased and received. These records must |
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include the following, except that Subdivision (7) applies to |
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distributors only and Subdivision (8) applies only to the purchase |
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or receipt of tobacco products other than cigars: |
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(1) the name and address of the shipper or carrier and |
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the mode of transportation; |
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(2) all shipping records or copies of records, |
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including invoices, bills of lading, waybills, freight bills, and |
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express receipts; |
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(3) the date and the name of the place of origin of the |
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tobacco product shipment; |
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(4) the date and the name of the place of arrival of |
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the tobacco product shipment; |
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(5) a statement of the number, kind, and price paid for |
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the tobacco products; |
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(6) the name, address, permit number, and tax |
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identification number of the seller; |
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(7) the manufacturer's list price for the tobacco |
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products; |
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(8) the net weight as listed by the manufacturer for |
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each unit; and |
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(9) any other information required by rules of the |
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comptroller. |
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SECTION 8. Subchapter D, Chapter 155, Tax Code, is amended |
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by adding Section 155.109 to read as follows: |
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Sec. 155.109. EXPORT WAREHOUSE'S RECORDS. (a) Each export |
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warehouse shall keep, at each of the warehouse's places of business |
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in this state, records of all tobacco products received, |
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distributed, and delivered. |
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(b) The records must include: |
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(1) invoices for receipts and deliveries; |
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(2) orders for receipts and deliveries; |
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(3) shipping records for receipts and deliveries; and |
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(4) shipping records for distribution and delivery. |
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SECTION 9. Sections 155.201(a) and (b), Tax Code, are |
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amended to read as follows: |
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(a) A person violates this chapter if the person: |
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(1) is a distributor, wholesaler, manufacturer, |
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export warehouse, importer, bonded agent, manufacturer's |
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representative, or retailer and fails to keep records required by |
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this chapter; |
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(2) engages in the business of a bonded agent, |
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distributor, wholesaler, manufacturer, export warehouse, importer, |
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or retailer without a valid permit; |
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(3) is a distributor, wholesaler, manufacturer, |
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export warehouse, importer, bonded agent, or retailer and fails to |
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make a report required by this chapter to the comptroller or makes a |
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false or incomplete report or application required by this chapter |
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to the comptroller; or |
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(4) is a person affected by this chapter and fails or |
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refuses to abide by or violates a provision of this chapter or a |
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rule adopted by the comptroller under this chapter. |
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(b) A person who violates this chapter [forfeits and] shall |
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pay to the state a penalty of not more than $2,000 for each |
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violation. |
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SECTION 10. Section 155.202, Tax Code, is amended to read as |
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follows: |
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Sec. 155.202. NONPAYMENT OF TAX. A person commits an |
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offense if the person, without the tax being paid: |
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(1) receives or possesses in this state tobacco |
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products for the purpose of making a first sale; |
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(2) sells, offers for sale, or presents tobacco |
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products as a prize or gift; or |
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(3) knowingly consumes, uses, or smokes tobacco |
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products subject to the tax imposed by this chapter [in an amount on
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which a tax of more than $50 is due]. |
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SECTION 11. Section 155.207, Tax Code, is amended to read as |
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follows: |
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Sec. 155.207. PERMITS. A person commits an offense if the |
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person acting: |
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(1) as a distributor, wholesaler, or retailer, |
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receives or possesses tobacco products without having a valid |
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permit; |
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(2) as a distributor, wholesaler, or retailer, |
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receives or possesses tobacco products without having a permit |
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posted where it can be easily seen by the public; |
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(3) as a distributor or wholesaler, does not deliver |
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an invoice to the purchaser as required by Section 155.102; |
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(4) as a distributor, wholesaler, or retailer, sells |
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tobacco products without having a valid permit; or |
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(5) as a bonded agent or export warehouse, stores, |
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distributes, or delivers tobacco products on which the tax has not |
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been paid without having a valid permit. |
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SECTION 12. Section 155.209, Tax Code, is amended to read as |
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follows: |
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Sec. 155.209. TRANSPORTATION OF TOBACCO PRODUCTS. A person |
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commits an offense if the person: |
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(1) knowingly transports tobacco products subject to |
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the tax [taxed] under this chapter without the tax being paid; |
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(2) wilfully refuses to stop a motor vehicle operated |
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to transport tobacco products after a request to stop from an |
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authorized representative of the comptroller; or |
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(3) while transporting tobacco products, refuses to |
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permit a complete inspection of the cargo by an authorized |
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representative of the comptroller. |
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SECTION 13. The heading to Section 155.211, Tax Code, is |
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amended to read as follows: |
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Sec. 155.211. POSSESSION: TAX DUE [MORE THAN $50]. |
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SECTION 14. Section 155.211(a), Tax Code, is amended to |
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read as follows: |
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(a) A person commits an offense if the person possesses, in |
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violation of this chapter, tobacco products on which a tax [of more
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than $50] is required to be paid that has not been paid. The absence |
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of evidence of a tax payment is prima facie evidence of nonpayment. |
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SECTION 15. Sections 155.022, 155.112(b), and 155.203, Tax |
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Code, are repealed. |
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SECTION 16. The changes in law made by this Act to Sections |
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155.202, 155.207, 155.209, and 155.211, Tax Code, and the repeal by |
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this Act of Section 155.203, Tax Code, apply only to an offense |
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committed on or after the effective date of this Act. An offense |
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committed before the effective date of this Act is governed by the |
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law in effect on the date the offense was committed, and the former |
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law is continued in effect for that purpose. For purposes of this |
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section, an offense was committed before the effective date of this |
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Act if any element of the offense occurred before that date. |
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SECTION 17. The changes in law made by this Act do not |
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affect tax liability accruing before the effective date of this |
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Act. That liability continues in effect as if this Act had not been |
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enacted, and the former law is continued in effect for the |
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collection of taxes due and for civil and criminal enforcement of |
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the liability for those taxes. |
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SECTION 18. This Act takes effect September 1, 2019. |
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