|
|
|
A BILL TO BE ENTITLED
|
|
AN ACT
|
|
relating to the administration, collection and remittance of |
|
cigarette tax |
|
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|
SECTION 1. Section 154.001, Tax Code, is amended to read as |
|
follows: |
|
Sec. 154.001. DEFINITIONS. In this chapter: |
|
(1) "Bonded agent" means a person in this state who is |
|
a[n] third party agent of a [person ] manufacturer outside this |
|
state and who receives cigarettes in interstate commerce and stores |
|
the cigarettes for distribution or delivery to distributors under |
|
orders from the manufacturer[person] outside this state. |
|
(2) "Cigarette" means a roll for smoking: |
|
(A) that is made of tobacco or tobacco mixed with |
|
another ingredient and wrapped or covered with a material other |
|
than tobacco; and |
|
(B) that is not a cigar. |
|
(3) "Commercial business location" means the entire |
|
premises occupied by a permit applicant or a person required to hold |
|
a permit under this chapter. |
|
(4) "Common carrier" means a motor carrier registered |
|
under Chapter 643, Transportation Code, or a motor carrier |
|
operating under a certificate issued by the Interstate Commerce |
|
Commission or a successor agency to the Interstate Commerce |
|
Commission. |
|
(5) "Consumer" means a person who possesses cigarettes |
|
for personal consumption. |
|
(6) "Counterfeit stamp" means a sticker, label, print, |
|
tag, or token that is used or is intended to be used to simulate a |
|
stamp and that is not authorized or issued by the comptroller. |
|
(7) "Distributor" means a person who: |
|
(A) is authorized to purchase for the purpose of |
|
making a first sale in this state cigarettes in unstamped packages |
|
from manufacturers who distribute cigarettes in this state and to |
|
stamp cigarette packages; |
|
(B) ships, transports, imports into this state, |
|
acquires, or possesses cigarettes and makes a first sale of the |
|
cigarettes in this state; |
|
(C) manufactures or produces cigarettes; or |
|
(D) is an importer[ or import broker]. |
|
(8) "Engaged in business" means selling cigarettes in |
|
or into this state, using a warehouse or another location to store |
|
cigarettes, or physically conducting cigarette related business |
|
within this state by a person or a person's representative. |
|
(9)[8]"Export warehouse" means a person in this state |
|
who receives cigarettes in unstamped packages from manufacturers |
|
and stores the cigarettes for the purpose of making sales to |
|
authorized persons for resale, use, or consumption outside the |
|
United States. |
|
(10)[(9)] "First sale" means, except as otherwise |
|
provided by this chapter: |
|
(A) the first transfer of possession in |
|
connection with a purchase, sale, or any exchange for value of |
|
cigarettes in or into this state[ in intrastate commerce]; |
|
(B) the first use or consumption of cigarettes in |
|
this state; or |
|
(C) the loss of cigarettes in this state whether |
|
through negligence, theft, or other unaccountable loss. |
|
(11)[(10)] "Importer"[ or "import broker"] means a |
|
person who ships, transports, or imports into this state cigarettes |
|
manufactured or produced outside the United States for the purpose |
|
of making a first sale in this state. |
|
(12)[(11)] "Individual package of cigarettes" means a |
|
package that contains no[not] fewer than 20[10] cigarettes. |
|
(13)[(12)] "Manufacturer" means a person who |
|
manufactures, fabricates, or assembles cigarettes, or causes or |
|
arranges for the manufacture, fabrication, or assembly of |
|
cigarettes for sale or distribution[and sells cigarettes to a
|
|
distributor]. |
|
14[(13)] "Manufacturer's representative" means a |
|
person employed by a manufacturer to sell or distribute the |
|
manufacturer's stamped cigarette packages. |
|
15[(14)] "Permit holder" means a bonded agent, |
|
distributor, wholesaler, manufacturer, importer, export warehouse |
|
or retailer who[required to] obtains a permit under Section |
|
154.101. |
|
16[(15]) "Place of business" means: |
|
(A) a commercial business location where |
|
cigarettes are sold; |
|
(B) a commercial business location where |
|
cigarettes are kept for sale or consumption or otherwise stored; |
|
[or] |
|
(C) a vehicle from which cigarettes are sold; |
|
or[.] |
|
(D) a vending machine from which cigarettes are |
|
sold. |
|
17[(16)] "Previously used stamp" means a stamp that |
|
has been used to show payment of a tax imposed by this chapter and is |
|
again used, sold, or possessed for sale or use to show payment of a |
|
tax imposed by this chapter. |
|
18[(17)] "Retailer" means a person who engages in the |
|
practice of selling cigarettes to consumers and includes the owner |
|
of a [coin-operated] cigarette vending machine. |
|
(19) "Roll-your-own machine" means a machine for |
|
commercial use at a retail premise and is capable of producing |
|
cigarettes only in personal use quantities. |
|
20[(18)] "Stamp" includes only a stamp that: |
|
(A) is printed, manufactured, or made by |
|
authority of the comptroller; |
|
(B) shows payment of the tax imposed by this |
|
chapter; [and] |
|
(C) is consecutively numbered and uniquely |
|
identifiable as a Texas tax stamp[.]; and |
|
(D) is legible and undamaged. |
|
21[(19)] "Wholesaler" means a person, including a |
|
manufacturer's representative, who sells or distributes cigarettes |
|
in this state for resale but who is not a distributor. |
|
SECTION 2. Section 154.002, Tax Code, is amended to add |
|
subsection (b) as follows: |
|
Sec. 154.002. STORAGE. |
|
(a) The commercial business location where cigarettes are |
|
stored or kept cannot be a residence or a unit in a public storage |
|
facility. |
|
(b) This section does not apply to a manufacturer's |
|
representative. |
|
SECTION 3. Section 154.022, Tax Code, is amended to read as |
|
follows: |
|
Sec. 154.022. TAX IMPOSED ON FIRST SALE OF CIGARETTES. The |
|
cigarette tax is imposed and becomes due and payable when a person |
|
[in this state] receives cigarettes to make a first sale in this |
|
state. |
|
(A) A first sale includes: |
|
(1) the sale of cigarettes by a distributor located |
|
outside of this state to a distributor, wholesaler, or a retailer |
|
within this state; |
|
(2) the sale of cigarettes by a distributor inside |
|
this state who sells to a distributor, wholesaler, or a retailer |
|
within this state; or |
|
(3) the sale of cigarettes by a manufacturer located |
|
in this state who transfers the cigarettes in this state. |
|
(B) A first sale does not include: |
|
(1) the sale of cigarettes by a manufacturer located |
|
outside of this state to a distributor in this state; or |
|
(2) the transfer of cigarettes from a manufacturer to |
|
a bonded agent in this state. |
|
SECTION 4. Section 154.024, Tax Code, is amended to read as |
|
follows: |
|
Sec. 154.024. IMPORTATION OF SMALL QUANTITIES. |
|
(a) A person who imports and personally transports 200 or |
|
fewer cigarettes into this state from another state or Indian |
|
reservation is not required to pay the tax imposed by this chapter |
|
if the person uses the cigarettes and does not sell them or offer |
|
them for sale. A person who imports and personally transports 200 or |
|
fewer cigarettes into this state from a foreign country shall pay |
|
the tax imposed by this chapter and have affixed on each individual |
|
package of cigarettes a stamp to show payment of the tax. |
|
(b) Employees of the Texas Alcoholic Beverage Commission |
|
who collect taxes on alcoholic beverages at ports of entry shall |
|
collect at the ports of entry the tax imposed by this chapter on |
|
cigarettes imported into this state. In computing the amount of |
|
taxes to be collected, the commission may round the total amount up |
|
to the nearest quarter of a dollar. |
|
(c) The comptroller and the Texas Alcoholic Beverage |
|
Commission shall make rules for the administration of this section. |
|
SECTION 5. Section 154.041(d), and (f), Tax Code, are |
|
amended to read as follows: |
|
Sec. 154.041. STAMP REQUIRED. |
|
(a) A person who pays a tax imposed by this chapter shall |
|
securely affix a stamp to each individual package of cigarettes to |
|
show payment of the tax. |
|
(b) Except as provided by Section 154.152, each distributor |
|
shall obtain the necessary stamps before receiving or accepting |
|
delivery of unstamped packages of cigarettes. The possession of |
|
unstamped packages of cigarettes without the possession of the |
|
requisite amount or number of stamps is prima facie evidence that |
|
the cigarettes are possessed for the purpose of making a first sale |
|
without stamps and without payment of the tax imposed by this |
|
chapter |
|
(c) The absence of a stamp on an individual package of |
|
cigarettes is notice that the tax has not been paid. |
|
(d) A manufacturer of cigarettes outside this state may |
|
purchase a stamp and affix it to the individual package and no |
|
further payment of the tax is required. |
|
(e) The transfer of possession of cigarettes by a bonded |
|
agent to a distributor in this state, under instructions received |
|
from outside this state, is not a first sale. |
|
SECTION 6. Section 154.060, Tax Code, is amended to read as |
|
follows: |
|
Sec. 154.060. CANCELLATION. No person may cancel, mark, |
|
alter, or mutilate a stamp on a package of cigarettes so that the |
|
comptroller is prevented from or hindered in examining the |
|
genuineness of the stamp. |
|
SECTION 7. Section 154.101(b), and (g) through (k), Tax |
|
Code, are amended to read as follows: |
|
Sec. 154.101. PERMITS. |
|
(b) Each distributor, wholesaler, bonded agent, |
|
manufacturer, export warehouse, importer, or retailer shall obtain |
|
a permit for each place of business owned or operated by the |
|
distributor, wholesaler, bonded agent, manufacturer, export |
|
warehouse, importer, or retailer. |
|
(g) A research facility that only possesses and uses |
|
cigarettes for experimental purposes is not subject to the |
|
provisions of this section. |
|
(h) A person engaged in the business of selling cigarettes |
|
for commercial purposes and who provides a roll-your-own machine |
|
available for use by consumers must obtain a manufacturer's, |
|
distributor's, and a retailer's permit. |
|
(i) A person cannot be issued a permit under this chapter for |
|
a residence or a unit in a public storage facility. |
|
(j) [(g)] All financial information provided under this |
|
section is confidential and not subject to Chapter 552, Government |
|
Code. |
|
(k) [(h)] Permits for engaging in business as a distributor, |
|
wholesaler, bonded agent, manufacturer, export warehouse, |
|
importer, or retailer shall be governed exclusively by the |
|
provisions of this code. |
|
SECTION 8. Section 154.1015, Tax Code, is amended to read as |
|
follows: |
|
Sec. 154.1015. SALES; PERMIT HOLDERS AND NONPERMIT HOLDERS. |
|
(a) Except for retail sales to consumers, cigarettes may |
|
only be sold or distributed by and between permit holders. |
|
(b) An out of state manufacturer who is not a permitted |
|
distributor may only sell to a permitted distributor. |
|
(c) A permitted distributor may only sell to another |
|
permitted distributor, wholesaler, or retailer. |
|
(d) An importer may only sell to a permitted distributor, |
|
wholesaler, or retailer. |
|
(e) A permitted wholesaler may only sell to a permitted |
|
distributor, wholesaler, or retailer. |
|
(f) A permitted retailer may only sell to the consumer, and |
|
may only purchase from a distributor or wholesaler permitted in |
|
this state. |
|
(g) A permitted distributor who makes a first sale to a |
|
permitted distributor in this state is liable for and shall pay the |
|
tax. |
|
(h) A person who operates an export warehouse may only sell |
|
to persons authorized to sell or consume unstamped cigarettes |
|
outside the United States. |
|
(i) A manufacturer's representative may only sell to a |
|
permitted distributor, wholesaler, or retailer. |
|
(j) [(b)] A person who is not a permit holder may not sell or |
|
distribute more than 200 individual cigarettes to any person. |
|
SECTION 9. Section 154.110(a), Tax Code, is amended to read |
|
as follows: |
|
Sec. 154.110. ISSUANCE OF PERMIT. |
|
(a) The comptroller shall issue a permit to a distributor, |
|
wholesaler, bonded agent, manufacturer, importer, export |
|
warehouse, or retailer if the comptroller: |
|
(1) has received an application and fee, if required; |
|
(2) believes that the applicant has complied with |
|
Section 154.101; and |
|
(3) determines that issuing the permit will not |
|
jeopardize the administration and enforcement of this chapter. |
|
SECTION 10. Section 154.111(g),(h) and (i), Tax Code, are |
|
amended to read as follows: |
|
Sec. 154.111. PERMIT YEAR; FEES. |
|
(g) Permitted locations that close before the permit |
|
expiration date are not eligible for a refund. |
|
(h) No fee is required for a person who has applied for and |
|
received an export warehouse permit. |
|
(i)[(g)] expired. |
|
SECTION 11. Section 154.201, Tax Code, is amended to read as |
|
follows: |
|
Each distributor, wholesaler, bonded agent, and export |
|
warehouse shall keep records at each place of business of all |
|
cigarettes purchased or received, including records of those |
|
cigarettes for which no tax is due under federal law. Each retailer |
|
shall keep records at a single commercial location, which the |
|
retailer shall designate as its principal place of business in this |
|
state, of all cigarettes purchased or received. These records must |
|
include: |
|
(1) the name and address of the shipper or carrier and |
|
the mode of transportation; |
|
(2) all shipping records or copies of records, |
|
including invoices, bills of lading, waybills, freight bills, and |
|
express receipts; |
|
(3) the date and the name of the place of origin of the |
|
cigarette shipment; |
|
(4) the date and the name of the place of arrival of |
|
the cigarette shipment; |
|
(5) a statement of the number, kind, and price paid for |
|
cigarettes, including cigarettes in stamped and unstamped |
|
packages; |
|
(6) the name, address, permit number, and tax |
|
identification number of the seller; |
|
(7) in the case of a distributor, copies of the customs |
|
certificates required by 19 U.S.C. Section 1681a(c), as amended, |
|
for all cigarettes imported into the United States to which the |
|
distributor has affixed a tax stamp; and |
|
(8) any other information required by rules of the |
|
comptroller. |
|
SECTION 12. Section 154.204(b), Tax Code, is amended to |
|
read as follows: |
|
Sec. 154.204. MANUFACTURER'S RECORDS AND REPORTS. |
|
(b) A manufacturer who sells cigarettes to a permit holder |
|
in this state shall file with the comptroller, on or before the 25th |
|
[end]of each month, a report showing the information listed in |
|
Subdivisions (1), (2), (3), and (5) of Subsection (a) for the |
|
previous month. Information related to the manufacturer's list |
|
prices must be submitted by the manufacturer 15 days prior to any |
|
scheduled changes. |
|
SECTION 13. Section 154.207(b), Tax Code, is amended to |
|
read as follows: |
|
(b) The comptroller and the attorney general are entitled to |
|
access during regular business hours [to] all records pertaining to |
|
cigarettes that are transported. |
|
SECTION 14. Section 154.208(a), Tax Code, is amended to |
|
read as follows: |
|
(a) Each bonded agent shall keep, at each of its places of |
|
business in this state, records of all cigarettes received, |
|
distributed, and delivered. |
|
SECTION 15. Section 154.209(b), Tax Code, is amended to |
|
read as follows: |
|
(b) If a permit holder's place of business is a vehicle or a |
|
vending machine, the permit holder shall designate in the |
|
application for a permit a permanent place of business to keep the |
|
records. The permit holder shall keep the records in the designated |
|
place. |
|
SECTION 16. Section 154.213, Tax Code, is added to read as |
|
follows: |
|
Sec. 154.213 EXPORT WAREHOUSE'S RECORDS. (a) Each export |
|
warehouse shall keep, at each of its places of business in this |
|
state, records of all cigarettes received, distributed, and |
|
delivered. |
|
(b) The records must include: |
|
(1) invoices for receipts and deliveries; |
|
(2) orders for receipts and deliveries; |
|
(3) shipping records for receipts and deliveries; and |
|
(4) shipping records for distribution and delivery. |
|
SECTION 17. Section 154.501, Tax Code, is amended to read as |
|
follows: |
|
(a) A person violates this chapter if the person: |
|
(1) is a distributor, wholesaler, manufacturer, |
|
importer, export warehouse, bonded agent, manufacturer's |
|
representative, or retailer and fails to keep records required by |
|
this chapter; |
|
(2) engages in the business of a bonded agent, |
|
distributor, wholesaler, manufacturer, importer, export |
|
warehouse, or retailer without a valid permit; |
|
(3) is a distributor, wholesaler, manufacturer, |
|
importer, export warehouse, bonded agent, or retailer and fails to |
|
make a report or makes a false or incomplete report or application |
|
required by this chapter to the comptroller; or |
|
(4) is a person affected by this chapter and fails or |
|
refuses to abide by or violates a provision of this chapter or a |
|
rule adopted by the comptroller under this chapter. |
|
(b) A person who violates this section [forfeits and] shall |
|
pay to the state a penalty of not more than $2,000 for each |
|
violation. |
|
(c) Each day on which a violation occurs is a separate |
|
offense. |
|
(d) The attorney general shall bring a suit[s] to recover |
|
penalties under this section. |
|
(e) A suit under this section may be brought in a court of |
|
competent jurisdiction in Travis County or in any court having |
|
jurisdiction. |
|
SECTION 18. Section 154.502, Tax Code, is amended to read as |
|
follows: |
|
Sec. 154.502. UNSTAMPED CIGARETTES. Except as provided by |
|
Section 154.026(b), a person commits an offense if the person: |
|
(1) makes a first sale of unstamped cigarettes; |
|
(2) sells, offers for sale, or presents as a prize or |
|
gift unstamped cigarettes; or |
|
(3) knowingly consumes, uses, or smokes cigarettes |
|
subject to tax [taxed] under this chapter without a stamp affixed to |
|
each individual package. |
|
SECTION 19. Section 154.509, Tax Code, is amended to read as |
|
follows: |
|
Sec. 154.509. PERMITS. A person commits an offense if the |
|
person acting: |
|
(1) as a distributor, wholesaler, or retailer, |
|
receives or possesses cigarettes without having a valid permit; |
|
(2) as a distributor, wholesaler, or retailer, |
|
receives or possesses cigarettes without having a permit posted |
|
where it can be easily seen by the public; |
|
(3) as a distributor or wholesaler, does not deliver |
|
an invoice to the purchaser as required by Section 154.203; |
|
(4) as a distributor, wholesaler, or retailer, sells |
|
cigarettes without having a valid permit; or |
|
(5) as a bonded agent[,] or export warehouse, stores, |
|
distributes, or delivers cigarettes in unstamped packages without |
|
having a valid permit. |
|
SECTION 20. Section 154.520, Tax Code, is amended to read as |
|
follows: |
|
Sec. 154.520. COUNTERFEIT STAMPS. |
|
(a) A person commits an offense if the person: |
|
(1) prints, engraves, makes, duplicates, issues, |
|
sells, or circulates counterfeit stamps; |
|
(2) possesses, with intent to use, sell, circulate, or |
|
pass a counterfeit stamp; |
|
(3) uses or consents to the use of a counterfeit stamp |
|
in the sale or offering for sale of cigarettes; or |
|
(4) places or causes to be placed a counterfeit stamp |
|
on an individual package of cigarettes. |
|
(b) An offense under this section is a felony punishable by |
|
confinement in the Texas Department of Criminal Justice for not |
|
less than 2 years nor more than 20 years. |
|
(c) Venue of a prosecution under this section is in Travis |
|
County. |
|
SECTION 21. The change in law made by this Act does not |
|
affect tax liability accruing before the effective date of this |
|
Act. That liability continues in effect as if this Act had not been |
|
enacted, and the former law is continued in effect for the |
|
collection of taxes due and for civil and criminal enforcement of |
|
the liability for those taxes. |
|
SECTION 22. This Act takes effect September 1, 2019. |