| |
| |
|
|
A BILL TO BE ENTITLED
|
|
|
AN ACT
|
|
|
relating to sales and use taxes on e-cigarettes and vapor products; |
|
|
imposing taxes; providing an administrative penalty; authorizing |
|
|
the imposition of a fee. |
|
|
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|
|
SECTION 1. Subtitle E, Title 2, Tax Code, is amended by |
|
|
adding Chapter 164 to read as follows: |
|
|
CHAPTER 164. TAX ON E-CIGARETTES AND VAPOR PRODUCTS |
|
|
Sec. 164.0001. DEFINITIONS. In this chapter: |
|
|
(1) "E-cigarette" has the meaning assigned by Section |
|
|
161.081, Health and Safety Code. |
|
|
(2) "Vapor product" means a consumable liquid solution |
|
|
or other material aerosolized or vaporized during the use of an |
|
|
e-cigarette, regardless of whether the liquid contains nicotine. |
|
|
Sec. 164.0002. E-CIGARETTE AND VAPOR PRODUCT SALES TAX. |
|
|
(a) A tax is imposed on each sale of an e-cigarette or vapor product |
|
|
in this state. |
|
|
(b) The tax rate is 10 percent of the sales price of an |
|
|
e-cigarette or vapor product sold. |
|
|
(c) A tax imposed under this section is in addition to the |
|
|
tax imposed under Subchapter C, Chapter 151. A tax imposed under |
|
|
this section does not apply to a sale unless the tax imposed under |
|
|
Subchapter C, Chapter 151, applies to the sale. |
|
|
Sec. 164.0003. E-CIGARETTE AND VAPOR PRODUCT USE TAX. (a) |
|
|
A tax is imposed on the storage, use, or other consumption in this |
|
|
state of an e-cigarette or vapor product purchased from a retailer |
|
|
for storage, use, or other consumption in this state. |
|
|
(b) The tax rate is 10 percent of the sales price of an |
|
|
e-cigarette or vapor product stored, used, or otherwise consumed in |
|
|
this state. |
|
|
(c) A tax imposed under this section is in addition to the |
|
|
tax imposed under Subchapter D, Chapter 151. A tax imposed under |
|
|
this section does not apply to the storage, use, or other |
|
|
consumption of an e-cigarette or vapor product unless the tax |
|
|
imposed under Subchapter D, Chapter 151, applies to the storage, |
|
|
use, or other consumption. |
|
|
Sec. 164.0004. APPLICATION OF OTHER PROVISIONS OF CODE. |
|
|
(a) Except as provided by this chapter: |
|
|
(1) the taxes imposed under this chapter are |
|
|
administered, imposed, collected, and enforced in the same manner |
|
|
as the taxes under Chapter 151 are administered, imposed, |
|
|
collected, and enforced; and |
|
|
(2) the provisions of Chapter 151 applicable to the |
|
|
sales tax imposed under Subchapter C, Chapter 151, and the use tax |
|
|
imposed under Subchapter D, Chapter 151, apply to the sales and use |
|
|
taxes imposed under this chapter. |
|
|
(b) A change in the law relating to the taxation of the sale |
|
|
or use of an e-cigarette or vapor product under Chapter 151 also |
|
|
applies to the sales or use tax imposed under this chapter. |
|
|
Sec. 164.0005. REPORTS. (a) A person required to file a |
|
|
report under Section 151.403 who is also required to collect or pay |
|
|
a tax under this chapter shall file with the comptroller a report |
|
|
stating: |
|
|
(1) for sales tax purposes, the amount of total |
|
|
receipts from e-cigarettes and vapor products sold by the seller |
|
|
during the reporting period; |
|
|
(2) for use tax purposes, the amount of total receipts |
|
|
from e-cigarettes and vapor products sold by the retailer during |
|
|
the reporting period for storage, use, or other consumption in this |
|
|
state; |
|
|
(3) the amount of the total sales prices of |
|
|
e-cigarettes and vapor products subject to the use tax that were |
|
|
acquired during the reporting period for storage, use, or other |
|
|
consumption in this state by a purchaser who did not pay the tax to a |
|
|
retailer; |
|
|
(4) the amount of the taxes due under this chapter for |
|
|
the reporting period; and |
|
|
(5) any other information required by the comptroller. |
|
|
(b) The report required by this section for a reporting |
|
|
period is due on the same date that the tax payment for the period is |
|
|
due. |
|
|
Sec. 164.0006. RECORDS. (a) A person required to file a |
|
|
report under Section 151.403 who is also required to collect or pay |
|
|
a tax under this chapter shall keep a complete record of: |
|
|
(1) all gross receipts from each sale to which this |
|
|
chapter applies occurring during each reporting period, along with |
|
|
documentation relating to those receipts; |
|
|
(2) all purchases of e-cigarettes and vapor products, |
|
|
including the constituent parts of e-cigarettes and vapor products, |
|
|
from every source during each reporting period, along with |
|
|
documentation relating to those purchases; |
|
|
(3) all sales and use taxes, and any money represented |
|
|
to be sales or use tax, collected under this chapter during each |
|
|
reporting period; and |
|
|
(4) any other information required by the comptroller. |
|
|
(b) A person shall keep the records required by Subsection |
|
|
(a) for the period required by Section 151.025(b). |
|
|
Sec. 164.0007. DISPOSITION OF PROCEEDS. The comptroller |
|
|
shall deposit the proceeds from taxes imposed under this chapter to |
|
|
the credit of the foundation school fund. |
|
|
Sec. 164.0008. DISCIPLINARY ACTION FOR CERTAIN VIOLATIONS. |
|
|
(a) A person required to file a report under Section 151.403 who is |
|
|
also required to collect or pay a tax under this chapter is subject |
|
|
to disciplinary action as provided by this section if: |
|
|
(1) an agent or employee of the person commits an |
|
|
offense under Subchapter H, Chapter 161, Health and Safety Code; |
|
|
and |
|
|
(2) the person, with criminal negligence, failed to |
|
|
prevent the offense through adequate supervision and training of |
|
|
the agent or employee. |
|
|
(b) If the comptroller finds, after notice and an |
|
|
opportunity for a hearing, that a person described by Subsection |
|
|
(a) has violated Subchapter H, Chapter 161, Health and Safety Code, |
|
|
at a place of business for which a sales tax permit under Chapter |
|
|
151 has been issued, the comptroller may suspend the permit for that |
|
|
place of business or administratively assess a fine as follows: |
|
|
(1) if the person has not been found to have violated |
|
|
Subchapter H, Chapter 161, Health and Safety Code, at that place of |
|
|
business during the preceding 12 months, the comptroller may |
|
|
require the person to pay a fine in an amount not to exceed $500; |
|
|
(2) if the person has been found to have violated |
|
|
Subchapter H, Chapter 161, Health and Safety Code, at that place of |
|
|
business once during the preceding 12 months, the comptroller may |
|
|
require the person to pay a fine in an amount not to exceed $750; and |
|
|
(3) if the person has been found to have violated |
|
|
Subchapter H, Chapter 161, Health and Safety Code, at that place of |
|
|
business at least twice during the preceding 12 months, the |
|
|
comptroller may require the person to pay a fine in an amount not to |
|
|
exceed $1,000 or suspend the sales tax permit for that place of |
|
|
business for not more than three days. |
|
|
(c) Except as provided by Section 164.0009, if the person |
|
|
has been found to have violated Section 161.082(b), Health and |
|
|
Safety Code, on four or more previous and separate occasions at the |
|
|
same place of business during the preceding 24 months, the |
|
|
comptroller shall revoke the sales tax permit for that place of |
|
|
business. |
|
|
(d) A person whose sales tax permit has been revoked under |
|
|
this section may not apply for a sales tax permit under Chapter 151 |
|
|
for the same place of business before the expiration of six months |
|
|
after the effective date of the revocation. |
|
|
Sec. 164.0009. ACTIONS OF EMPLOYEE. (a) For purposes of |
|
|
Subchapter H, Chapter 161, Health and Safety Code, relating to the |
|
|
sale or delivery of e-cigarettes to a minor, the comptroller may |
|
|
suspend a sales tax permit of a person required to file a report |
|
|
under Section 151.403 who is also required to collect or pay a tax |
|
|
under this chapter but may not revoke the permit under Section |
|
|
164.0008 if the comptroller finds that: |
|
|
(1) the person has not violated Section 161.082(b), |
|
|
Health and Safety Code, more than four times at the place of |
|
|
business for which the permit is issued in the 24-month period |
|
|
preceding the violation in question; |
|
|
(2) the person requires its employees to attend a |
|
|
comptroller-approved seller training program; |
|
|
(3) the employee has actually attended a |
|
|
comptroller-approved seller training program; and |
|
|
(4) the person has not directly or indirectly |
|
|
encouraged the employee to violate the law. |
|
|
(b) The comptroller shall adopt rules or policies |
|
|
establishing the minimum requirements for approved seller training |
|
|
programs. On application, the comptroller shall approve seller |
|
|
training programs meeting the requirements that are sponsored |
|
|
privately or by public community colleges. The comptroller may |
|
|
charge an application fee in an amount necessary to defray the |
|
|
expense of processing the application. |
|
|
(c) The comptroller may approve under this section a seller |
|
|
training program sponsored by a person described by Subsection (a) |
|
|
for the purpose of training the person's employees without regard |
|
|
to whether the employees are located at the same place of business. |
|
|
This subsection applies only to a person who employs at least 100 |
|
|
persons at any one time during the permit year who sell |
|
|
e-cigarettes. |
|
|
SECTION 2. This Act takes effect September 1, 2019. |