87R19644 SRA-F
 
  By: Thierry, Burrows, Noble H.B. No. 211
 
  Substitute the following for H.B. No. 211:
 
  By:  Shine C.S.H.B. No. 211
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to sales and use taxes on e-cigarette vapor products and
  alternative nicotine products and the computation of taxes imposed
  on modified risk tobacco products; imposing taxes; reducing the
  rates of certain taxes imposed on modified risk tobacco products.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subtitle E, Title 2, Tax Code, is amended by
  adding Chapters 164 and 164A to read as follows:
  CHAPTER 164. TAX ON E-CIGARETTE VAPOR PRODUCTS AND ALTERNATIVE
  NICOTINE PRODUCTS
         Sec. 164.0001.  DEFINITIONS. In this chapter:
               (1)  "Alternative nicotine product" means a
  noncombustible product containing nicotine, but not containing
  tobacco leaf, that is intended for human consumption, whether
  chewed, absorbed, dissolved, inhaled, snorted, sniffed, or
  ingested by any other means. The term does not include an
  e-cigarette, a vapor product, a product regulated as a drug or
  device by the United States Food and Drug Administration, or a
  tobacco product as defined by Section 155.001.
               (2)  "E-cigarette" has the meaning assigned by Section
  161.081, Health and Safety Code.
               (3)  "Vapor product" means a consumable nicotine liquid
  solution or other material containing nicotine suitable for use in
  an e-cigarette.
         Sec. 164.0002.  E-CIGARETTE VAPOR PRODUCT SALES TAX. (a) A
  tax is imposed on each sale of a vapor product in this state.
         (b)  The tax rate is seven cents for each milliliter or
  fractional part of a milliliter of vapor product sold.
         (c)  The tax imposed under this section is in addition to the
  tax imposed under Subchapter C, Chapter 151. The 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 VAPOR PRODUCT USE TAX. (a)  A
  tax is imposed on the storage, use, or other consumption in this
  state of a vapor product purchased from a retailer for storage, use,
  or other consumption in this state.
         (b)  The tax rate is seven cents for each milliliter or
  fractional part of a milliliter of vapor product stored, used, or
  otherwise consumed in this state.
         (c)  The tax imposed under this section is in addition to the
  tax imposed under Subchapter D, Chapter 151. The tax imposed under
  this section does not apply to the storage, use, or other
  consumption of a vapor product unless the tax imposed under
  Subchapter D, Chapter 151, applies to the storage, use, or other
  consumption.
         Sec. 164.0004.  ALTERNATIVE NICOTINE PRODUCT SALES TAX. (a)
  A tax is imposed on each sale of an alternative nicotine product in
  this state.
         (b)  The tax rate is $1.22 for each ounce or fractional part
  of an ounce of alternative nicotine product sold.
         (c)  The computation of the tax under this section is based
  on the net weight of an alternative nicotine product as listed by
  the manufacturer.
         (d)  The tax imposed under this section is in addition to the
  tax imposed under Subchapter C, Chapter 151. The 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. 164.0005.  ALTERNATIVE NICOTINE PRODUCT USE TAX. (a) A
  tax is imposed on the storage, use, or other consumption in this
  state of an alternative nicotine product purchased from a retailer
  for storage, use, or other consumption in this state.
         (b)  The tax rate is $1.22 for each ounce or fractional part
  of an ounce of alternative nicotine product stored, used, or
  otherwise consumed in this state.
         (c)  The computation of the tax under this section is based
  on the net weight of an alternative nicotine product as listed by
  the manufacturer. 
         (d)  The tax imposed under this section is in addition to the
  tax imposed under Subchapter D, Chapter 151. The tax imposed under
  this section does not apply to the storage, use, or other
  consumption of an alternative nicotine product unless the tax
  imposed under Subchapter D, Chapter 151, applies to the storage,
  use, or other consumption.
         Sec. 164.0006.  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 a vapor product or alternative nicotine product under
  Chapter 151 also applies to the sales or use tax imposed under this
  chapter.
         Sec. 164.0007.  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 volume of vapor
  products and the net weight of alternative nicotine products sold
  by the seller during the reporting period;
               (2)  for use tax purposes, the volume of vapor products
  and the net weight of alternative nicotine products sold by the
  retailer during the reporting period for storage, use, or other
  consumption in this state;
               (3)  the volume of vapor products and the net weight of
  alternative nicotine 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. 164.0008.  RECORDS. 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)  the volume of vapor products and the net weight of
  alternative nicotine products sold in this state during each
  reporting period;
               (2)  the volume of vapor products, including the
  constituent parts of vapor products, and the net weight of
  alternative nicotine products purchased from every source during
  each reporting period;
               (3)  all sales and use taxes, and any money represented
  to be sales or use tax, collected during each reporting period; and
               (4)  any other information required by the comptroller.
         Sec. 164.0009.  DISPOSITION OF PROCEEDS. The comptroller
  shall deposit the proceeds from taxes imposed under this chapter in
  the general revenue fund.
  CHAPTER 164A. COMPUTATION OF TAX IMPOSED ON CERTAIN PRODUCTS
  CONTAINING TOBACCO OR NICOTINE 
         Sec. 164A.0001.  DEFINITION. In this chapter, "modified
  risk tobacco product" has the meaning assigned by 21 U.S.C. Section
  387k(b).
         Sec. 164A.0002.  TAX RATE APPLICABLE TO MODIFIED RISK
  TOBACCO PRODUCT. The rate of a tax applicable to a modified risk
  tobacco product for which an order under 21 U.S.C. Section 387k(g)
  is effective is one-half the rate provided by Section 154.021(b),
  155.021(b), 155.0211(b) or (c), 164.0002(b), 164.0003(b),
  164.0004(b), or 164.0005(b) that would otherwise apply to the
  product, notwithstanding the rates specified by those sections.
         Sec. 164A.0003.  RULES. The comptroller may adopt rules to
  implement this chapter.
         SECTION 2.  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 3.  This Act takes effect September 1, 2021.