State Codes and Statutes

Statutes > Texas > Tax-code > Title-2-state-taxation > Chapter-155-cigars-and-tobacco-products-tax

TAX CODE

TITLE 2. STATE TAXATION

SUBTITLE E. SALES, EXCISE, AND USE TAXES

CHAPTER 155. CIGARS AND TOBACCO PRODUCTS TAX

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 155.001. DEFINITIONS. In this chapter:

(1) "Bonded agent" means a person in this state who is an agent

of a person outside this state and receives cigars and tobacco

products in interstate commerce and stores the cigars and tobacco

products for distribution or delivery to distributors under

orders from the person outside this state.

(2) "Cigar" means a roll of fermented tobacco that is wrapped in

tobacco and the main stream of smoke from which produces an

alkaline reaction to litmus paper.

(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 tobacco products for

personal consumption.

(6) "Distributor" means a person who:

(A) receives tobacco products for the purpose of making a first

sale in this state from a manufacturer outside the state or

within the state or otherwise brings or causes to be brought into

this state tobacco products for sale, use, or consumption;

(B) manufactures or produces tobacco products; or

(C) is an importer or import broker.

(7) "Export warehouse" means a person in this state who receives

tobacco products from manufacturers and stores the tobacco

products for the purpose of making sales to authorized persons

for resale, use, or consumption outside the United States.

(8) "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 tobacco products in

intrastate commerce;

(B) the first use or consumption of tobacco products in this

state; or

(C) the loss of tobacco products in this state whether through

negligence, theft, or other unaccountable loss.

(9) "Importer" or "import broker" means a person who ships,

transports, or imports into this state tobacco products

manufactured or produced outside the United States for the

purpose of making a first sale in this state.

(10) "Manufacturer" means a person who manufactures or produces

tobacco products and sells tobacco products to a distributor.

(11) "Manufacturer's representative" means a person employed by

a manufacturer to sell or distribute the manufacturer's tobacco

products.

(12) "Permit holder" means a bonded agent, distributor,

wholesaler, manufacturer, importer, or retailer required to

obtain a permit under Section 155.041.

(13) "Place of business" means:

(A) a commercial business location where tobacco products are

sold;

(B) a commercial business location where tobacco products are

kept for sale or consumption or otherwise stored; or

(C) a vehicle from which tobacco products are sold.

(14) "Retailer" means a person who engages in the practice of

selling tobacco products to consumers and includes the owner of a

coin-operated vending machine.

(15) "Tobacco product" means:

(A) a cigar;

(B) smoking tobacco, including granulated, plug-cut, crimp-cut,

ready-rubbed, and any form of tobacco suitable for smoking in a

pipe or as a cigarette;

(C) chewing tobacco, including Cavendish, Twist, plug, scrap,

and any kind of tobacco suitable for chewing;

(D) snuff or other preparations of pulverized tobacco; or

(E) an article or product that is made of tobacco or a tobacco

substitute and that is not a cigarette.

(16) "Wholesaler" means a person, including a manufacturer's

representative, who sells or distributes tobacco products in this

state for resale but who is not a distributor.

Acts 1981, 67th Leg., p. 1666, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 2,

Sec. 7, eff. Oct. 2, 1984; Acts 1985, 69th Leg., ch. 58, Sec. 21,

eff. March 1, 1986; Acts 1991, 72nd Leg., ch. 409, Sec. 45, eff.

June 7, 1991; Acts 1995, 74th Leg., ch. 705, Sec. 11, eff. Sept.

1, 1995; Acts 1997, 75th Leg., ch. 165, Sec. 30.263, eff. Sept.

1, 1997; Acts 1997, 75th Leg., ch. 1040, Sec. 46, eff. Sept. 1,

1997; Acts 2001, 77th Leg., ch. 540, Sec. 4, eff. Sept. 1, 2001;

Acts 2001, 77th Leg., ch. 1263, Sec. 51, eff. Oct. 1, 2001.

Sec. 155.002. STORAGE. (a) The commercial business location

where tobacco products 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.

Added by Acts 2001, 77th Leg., ch. 540, Sec. 5, eff. Sept. 1,

2001. Amended by Acts 2003, 78th Leg., ch. 209, Sec. 27, eff.

Oct. 1, 2003.

SUBCHAPTER B. IMPOSITION AND RATE OF TAX

Sec. 155.021. TAX IMPOSED ON CIGARS. (a) A tax is imposed and

becomes due and payable when a permit holder receives cigars for

the purpose of making a first sale in this state.

(b) The tax rates are:

(1) one cent per 10 or fraction of 10 on cigars weighing three

pounds or less per thousand;

(2) $7.50 per thousand on cigars that:

(A) weigh more than three pounds per thousand; and

(B) sell at factory list price, exclusive of any trade discount,

special discount, or deal, for 3.3 cents or less each;

(3) $11 per thousand on cigars that:

(A) weigh more than three pounds per thousand;

(B) sell at factory list price, exclusive of any trade discount,

special discount, or deal, for more than 3.3 cents each; and

(C) contain no substantial amount of nontobacco ingredients; and

(4) $15 per thousand on cigars that:

(A) weigh more than three pounds per thousand;

(B) sell at factory list price, exclusive of any trade discount,

special discount, or deal, for more than 3.3 cents each; and

(C) contain a substantial amount of nontobacco ingredients.

(c) Cigars taxed under Subsections (b)(3) and (b)(4) of this

section are presumed to contain a substantial amount of

nontobacco ingredients unless the report on the cigars required

by Section 155.111 of this code is accompanied by an affidavit

stating that specific cigars described in the report do not

contain sheet wrapper, sheet binder, or sheet filler. If the

manufacturer prepares the report, the manufacturer shall make the

affidavit. If the distributor prepares the report, the

manufacturer and the distributor shall make the affidavit.

Acts 1981, 67th Leg., p. 1667, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 2,

Sec. 5, eff. Oct. 2, 1984; Acts 1991, 72nd Leg., ch. 409, Sec.

46, eff. June 7, 1991.

Sec. 155.0211. TAX IMPOSED ON TOBACCO PRODUCTS OTHER THAN

CIGARS. (a) A tax is imposed and becomes due and payable when a

permit holder receives tobacco products other than cigars, for

the purpose of making a first sale in this state.

(b) Except as provided by Subsection (c), the tax rate for each

can or package of a tobacco product other than cigars is $1.22

per ounce and a proportionate rate on all fractional parts of an

ounce.

(b-1) Notwithstanding Subsection (b) and except as provided by

Subsection (c), for the state fiscal year beginning September 1,

2012, the tax rate for each can or package of a tobacco product

other than cigars is $1.19 per ounce and a proportionate rate on

all fractional parts of an ounce. This subsection expires

December 1, 2013.

(b-2) Notwithstanding Subsection (b) and except as provided by

Subsection (c), for the state fiscal year beginning September 1,

2011, the tax rate for each can or package of a tobacco product

other than cigars is $1.16 per ounce and a proportionate rate on

all fractional parts of an ounce. This subsection expires

December 1, 2012.

(b-3) Notwithstanding Subsection (b) and except as provided by

Subsection (c), for the state fiscal year beginning September 1,

2010, the tax rate for each can or package of a tobacco product

other than cigars is $1.13 per ounce and a proportionate rate on

all fractional parts of an ounce. This subsection expires

December 1, 2011.

(b-4) Notwithstanding Subsection (b) and except as provided by

Subsection (c), for the state fiscal year beginning September 1,

2009, the tax rate for each can or package of a tobacco product

other than cigars is $1.10 per ounce and a proportionate rate on

all fractional parts of an ounce. This subsection expires

December 1, 2010.

(c) The tax imposed on a can or package of a tobacco product

other than cigars that weighs less than 1.2 ounces is equal to

the amount of the tax imposed on a can or package of a tobacco

product that weighs 1.2 ounces.

(d) The computation of the tax under this section and the

applicability of Subsection (c) shall be based on the net weight

as listed by the manufacturer. The total tax to be imposed on a

unit that contains multiple individual cans or packages is the

sum of the taxes imposed by this section on each individual can

or package intended for sale or distribution at retail.

(e) A change in the tax rate in effect for a state fiscal year

that occurs in accordance with this section does not affect taxes

imposed before that fiscal year, and the rate in effect when

those taxes were imposed continues in effect for purposes of the

liability for and collection of those taxes.

Added by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 2, Sec. 6,

eff. Oct. 2, 1984. Amended by Acts 1987, 70th Leg., 2nd C.S., ch.

5, art. 4, Sec. 2; Acts 1990, 71st Leg., 6th C.S., ch. 5, Sec.

2.02, eff. July 1, 1990; Acts 1991, 72nd Leg., ch. 409, Sec. 47,

eff. June 7, 1991.

Amended by:

Acts 2006, 79th Leg., 3rd C.S., Ch.

7, Sec. 2, eff. January 1, 2007.

Acts 2009, 81st Leg., R.S., Ch.

285, Sec. 10, eff. September 1, 2009.

Sec. 155.022. FIRST SALE OF TOBACCO PRODUCTS. A person who

receives or possesses tobacco products on which a tax of more

than $50 would be due if the receipt or possession were for the

purpose of making a first sale in this state is presumed to

receive or possess the tobacco products for the purpose of making

a first sale in this state. This presumption does not apply to

common carriers or to manufacturers. A tax is imposed on

manufacturers who manufacture tobacco products in this state at

the time the tobacco products are first transferred in connection

with a purchase, sale, or any exchange for value in intrastate

commerce. The distribution or delivery of tobacco products by a

bonded agent to a permitted distributor in this state, under

instructions received from outside this state, is not a first

sale.

Acts 1981, 67th Leg., p. 1668, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1991, 72nd Leg., ch. 409, Sec. 47, eff.

June 7, 1991.

Sec. 155.023. PAYMENT OF TAX. (a) A distributor shall pay the

tax on tobacco products received for the purpose of making a

first sale at the time the distributor files the report required

by Section 155.111. A distributor shall pay the tax by cashier's

check payable to the comptroller, by electronic funds transfer to

the comptroller or by any other method of payment authorized by

the comptroller.

(b) The person in possession of tobacco products has the burden

to prove payment of the tax on the products.

Acts 1981, 67th Leg., p. 1668, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1991, 72nd Leg., ch. 409, Sec. 47, eff.

June 7, 1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.77, eff.

Sept. 1, 1997.

Sec. 155.024. EXCEPTION FOR PERSONAL USE. A person who

personally transports cigars or tobacco products in quantities or

amounts that would ordinarily retail at 25 cents or less is not

required to pay the tax imposed by this chapter if the person

uses the cigars or tobacco products and does not sell them or

offer them for sale.

Acts 1981, 67th Leg., p. 1662, ch. 389, Sec. 1, eff. Jan. 1,

1982.

Sec. 155.026. PENALTY FOR FAILURE TO PAY TAX. (a) A

distributor who fails to timely pay the tax when due shall pay

five percent of the amount of tax then due as a penalty, and if

the distributor fails to pay the tax on or before the 30th day

after the day on which the tax is due, the distributor shall pay

an additional five percent.

(b) The minimum penalty imposed by this section is $50.

(c) The dishonor of a check delivered to the treasury for

payment of taxes constitutes a failure to pay the tax when due.

Acts 1981, 67th Leg., p. 1669, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1983, 68th Leg., p. 451, ch. 93, Sec. 3,

eff. Sept. 1, 1983; Acts 1991, 72nd Leg., ch. 409, Sec. 47, eff.

June 7, 1991.

Sec. 155.027. VENUE. Venue of a suit for collection of a

penalty for late payment of taxes is in Travis County.

Acts 1981, 67th Leg., p. 1669, ch. 389, Sec. 1, eff. Jan. 1,

1982.

SUBCHAPTER C. PERMITS

Sec. 155.041. PERMITS. (a) A person may not engage in business

as a distributor, wholesaler, bonded agent, manufacturer,

importer, or retailer unless the person has applied for and

received the applicable permit from the comptroller.

(b) Each distributor, wholesaler, bonded agent, manufacturer,

importer, or retailer shall obtain a permit for each place of

business owned or operated by the distributor, wholesaler, bonded

agent, manufacturer, importer, or retailer.

(c) The comptroller shall prescribe the form and content of an

application for a permit and shall furnish the form on request of

an applicant.

(d) The applicant shall accurately complete all information

required by the application and provide the comptroller with

additional information the comptroller considers necessary.

(e) The comptroller may require each corporation, association,

joint venture, syndicate, partnership, or proprietorship to

furnish financial information regarding the applicant and to

provide the identity of each officer, director, stockholder

owning 10 percent or more of the outstanding stock, partner,

member, owner, or managing employee.

(f) Each distributor, wholesaler, and retailer that applies for

a permit to sell tobacco products from a vehicle must provide the

make, model, vehicle identification number, registration number,

and any other information required by the comptroller.

(g) All financial information provided under this section is

confidential and not subject to Chapter 552, Government Code.

(h) Permits for engaging in business as a distributor,

wholesaler, bonded agent, manufacturer, importer, or retailer

shall be governed exclusively by the provisions of this code.

Acts 1981, 67th Leg., p. 1669, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1985, 69th Leg., ch. 58, Sec. 23, eff.

March 1, 1986; Acts 1989, 71st Leg., ch. 240, Sec. 54, eff. Oct.

1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 48, eff. June 7,

1991; Acts 1995, 74th Leg., ch. 76, Sec. 5.95(88), eff. Sept. 1,

1995; Acts 1995, 74th Leg., ch. 1000, Sec. 47, eff. Oct. 1, 1995;

Acts 1997, 75th Leg., ch. 1423, Sec. 19.78, eff. Sept. 1, 1997;

Acts 2001, 77th Leg., ch. 1263, Sec. 52, eff. Oct. 1, 2001.

Sec. 155.0415. SALES: PERMIT HOLDERS AND NONPERMIT HOLDERS. (a)

Except for retail sales to consumers, tobacco products may only

be sold or distributed by and between permit holders.

(b) A person who is not a permit holder may not sell or

distribute tobacco products on which a tax of more than $50 has

been paid or is due.

Added by Acts 1991, 72nd Leg., ch. 409, Sec. 49, eff. June 7,

1991.

Sec. 155.045. COMBINATION PERMIT. The comptroller may issue a

combination permit for cigarettes and tobacco products under

Section 154.102. A person who receives a combination permit is

subject to the provisions of this chapter in the same manner as a

person holding a single permit under this chapter.

Acts 1981, 67th Leg., p. 1670, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1985, 69th Leg., ch. 58, Sec. 24, eff.

March 1, 1986; Acts 1989, 71st Leg., ch. 240, Sec. 58, eff. Oct.

1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 50, eff. June 7,

1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.79, eff. Sept. 1,

1997.

Sec. 155.048. ISSUANCE OF PERMITS. (a) The comptroller shall

issue a permit to a distributor, wholesaler, bonded agent,

manufacturer, importer, or retailer if the comptroller:

(1) has received an application and fee, if required;

(2) does not reject the application and deny the permit under

Section 155.0481; and

(3) determines that issuing the permit will not jeopardize the

administration and enforcement of this chapter.

(b) The permit shall be issued for a designated place of

business, except as provided by Section 155.053.

(c) The permits are nonassignable.

(d) The permit must indicate the type of permit that it is and

authorize the sale of tobacco products in this state. The permit

must show that it is revocable and shall be forfeited or

suspended if the conditions of issuance, provisions of this

chapter, or rules of the comptroller are violated.

Acts 1981, 67th Leg., p. 1670, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1985, 69th Leg., ch. 58, Sec. 26, eff.

March 1, 1986; Acts 1989, 71st Leg., ch. 240, Sec. 61, eff. Oct.

1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 50, eff. June 7,

1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.80, eff. Sept. 1,

1997; Acts 2001, 77th Leg., ch. 1263, Sec. 53, eff. Oct. 1, 2001.

Sec. 155.0481. DENIAL OF PERMIT. The comptroller may reject an

application and deny a permit if the comptroller finds, after

notice and opportunity for hearing, any of the following:

(1) the premises where business will be conducted are not

adequate to protect the tobacco products; or

(2) the applicant or managing employee, or, if the applicant is

a corporation, an officer, director, manager, or any stockholder

who holds directly or through family or partner relationship 10

percent or more of the corporation's stock, or, if the applicant

is a partnership, a partner or manager:

(A) has failed to disclose any information required by Sections

155.041(d), (e), and (f), including prior business experience,

financial condition of the permit holder, present or previous

business affiliations, prior employment, and any conviction of a

felony, or has made a false statement in the application; or

(B) has previously violated provisions of this chapter.

Added by Acts 1991, 72nd Leg., ch. 409, Sec. 50, eff. June 7,

1991. Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 19.81, eff.

Sept. 1, 1997.

Sec. 155.049. LICENSING YEAR; FEES. (a) A permit required by

this chapter expires on the last day of February of each year,

except the retailer's permit required by Section 155.041 expires

on the last day of May of each even-numbered year.

(b) An application for a permit required by this chapter must be

accompanied by a fee of:

(1) $300 for a bonded agent's permit;

(2) $300 for a distributor's permit;

(3) $200 for a wholesaler's permit;

(4) $15 for each permit for a vehicle if the applicant is also

applying for a permit as a bonded agent, distributor, or

wholesaler or has received a current permit from the comptroller

under Sections 155.041 and 155.048; and

(5) $180 for a retailer's permit.

(c) Repealed by Acts 1997, 75th Leg., ch. 671, Sec. 4.06(b),

eff. Sept. 1, 1997.

(d) For a new or renewal permit required by Section 155.041, the

comptroller shall prorate the fee according to the number of

months remaining during the calendar year that the permit is to

be in effect.

(e) A person who does not obtain a permit each year in a timely

manner must pay a late fee of $50 in addition to the application

fee for the permit.

(f) If at the date of issuance a permit will expire within three

months, the comptroller may collect the prorated permit fee or

the fee for a current year and, with the consent of the permit

holder, may collect the fee for the next permit year and issue a

permit or permits for both periods, as applicable.

(g) Expired.

Acts 1981, 67th Leg., p. 1670, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1985, 69th Leg., ch. 58, Sec. 27, eff.

March 1, 1986; Acts 1989, 71st Leg., ch. 240, Sec. 62, eff. Oct.

1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 50, eff. June 7,

1991; Acts 1997, 75th Leg., ch. 671, Sec. 4.06, eff. Sept. 1,

1997; Acts 1997, 75th Leg., ch. 1423, Sec. 19.82, eff. Sept. 1,

1997.

Sec. 155.050. PAYMENT FOR PERMITS. (a) An applicant for a

permit required by Section 155.041 shall send the required fee

with the application.

(b) The payment must be in cash or by money order or check.

(c) A permit may not be issued in exchange for a check until

after the comptroller has received full payment on the check.

Acts 1981, 67th Leg., p. 1671, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 63, eff.

Oct. 1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 50, eff. June

7, 1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.83, eff. Sept.

1, 1997.

Sec. 155.053. DISPLAY OF PERMIT. (a) Each permit holder shall

keep the permit on public display at the place of business for

which the permit was issued.

(b) Each permit holder who has a permit assigned to a vehicle

shall post the permit in a conspicuous place on the vehicle.

(c) Each retailer who operates a vending machine that includes

tobacco products shall place a retailer's permit on the machine.

Acts 1981, 67th Leg., p. 1671, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1985, 69th Leg., ch. 58, Sec. 29, eff.

March 1, 1986; Acts 1991, 72nd Leg., ch. 409, Sec. 50, eff. June

7, 1991.

Sec. 155.058. REVENUE. (a) Except as provided by Subsection

(b), revenue from the sale of permits to distributors,

wholesalers, and bonded agents is allocated in the same manner

that other revenue is allocated by Subchapter H.

(b) Revenue from the sale of retailer's permits shall be

deposited to the general revenue fund and may be appropriated

only as provided by this section. The money may be appropriated

first to the comptroller for administration of licensing of

retailers under this chapter or Chapter 154.

(c) If, after any appropriation is made under Subsection (b),

revenue remains from the sale of retailer's permits, the

remaining money may be appropriated to the comptroller for

administration and enforcement of Subchapters H, K, and N,

Chapter 161, Health and Safety Code, and to the Texas Department

of Health, for the administration and enforcement of Section

161.253, Health and Safety Code.

(d) If, after any appropriation is made under Subsections (b)

and (c), revenue remains from the sale of retailer's permits, the

remaining money may be appropriated to the Texas Department of

Health to administer the commissioner of public health's

responsibilities under Section 161.301, Health and Safety Code.

(e) If, after any appropriation is made under Subsections (b),

(c), and (d), revenue remains from the sale of retailer's

permits, the remaining money may be appropriated to the

appropriate entity to administer that entity's responsibilities

under Section 161.302, Health and Safety Code.

Acts 1981, 67th Leg., p. 1672, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1985, 69th Leg., ch. 58, Sec. 33, eff.

March 1, 1986; Acts 1991, 72nd Leg., ch. 409, Sec. 50, eff. June

7, 1991; Acts 1997, 75th Leg., ch. 671, Sec. 4.07, eff. Sept. 1,

1997.

Sec. 155.059. FINAL SUSPENSION OR REVOCATION OF PERMIT. (a)

The comptroller may revoke or suspend a person's permit if the

comptroller finds, after notice and hearing as provided by this

section, that the permit holder violated this chapter or an

administrative rule made under this chapter.

(b) If the comptroller intends to suspend or revoke a permit,

the comptroller shall provide the permit holder with written

notice that includes a statement:

(1) of the reason for the intended revocation or suspension;

(2) that the permit holder is entitled to a hearing by the

comptroller on the proposed suspension or revocation; and

(3) of the date, time, and place of the hearing.

(c) The comptroller shall deliver the written notice by personal

service or by mail to the permit holder's mailing address as it

appears in the comptroller's records. Service by mail is complete

when the notice is deposited with the United States Postal

Service.

(d) The comptroller shall give the permit holder not less than

10 days' notice of a final hearing.

(e) A permit holder may appeal the decision of the comptroller

to a district court in Travis County not later than the 30th day

after the date the comptroller's decision becomes final.

(f) A person whose permit is suspended or revoked may not sell,

offer for sale, or distribute tobacco products from the place of

business to which the permit applied until a new permit is

granted or the suspension is removed.

(g) If the comptroller suspends or revokes a permit, the

comptroller shall provide written notice of the suspension or

revocation, within a reasonable time, to each permit holder in

the state. A permit holder violates Section 155.0415(a) by

selling or distributing tobacco products to a person whose permit

has been suspended or revoked only after the permit holder

receives written notice of the suspension or revocation from the

comptroller.

Acts 1981, 67th Leg., p. 1672, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1985, 69th Leg., ch. 58, Sec. 34, eff.

March 1, 1986; Acts 1989, 71st Leg., ch. 240, Sec. 67, eff. Oct.

1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 50, eff. June 7,

1991; Acts 1995, 74th Leg., ch. 1000, Sec. 48, eff. Oct. 1, 1995;

Acts 1997, 75th Leg., ch. 1423, Sec. 19.84, eff. Sept. 1, 1997;

Acts 1999, 76th Leg., ch. 1467, Sec. 2.43, eff. Oct. 1, 1999.

Sec. 155.0591. SUMMARY SUSPENSION OF A PERMIT. (a) The

comptroller may suspend a person's permit without notice or a

hearing for the person's failure to comply with this chapter or a

rule adopted under this chapter if the person's continued

operation constitutes an immediate and substantial threat to the

collection of taxes imposed by this chapter and attributable to

the person's operation.

(b) If the comptroller summarily suspends a person's permit,

proceedings for a preliminary hearing before the comptroller or

the comptroller's representative must be initiated simultaneously

with the summary suspension. The preliminary hearing shall be set

for a date not later than 10 days after the date of the summary

suspension, unless the parties agree to a later date.

(c) At the preliminary hearing, the permit holder must show

cause why the permit should not remain suspended pending a final

hearing on suspension or revocation.

(d) Chapter 2001, Government Code, does not apply to a summary

suspension under this section.

(e) To initiate a proceeding to suspend summarily a person's

permit, the comptroller shall serve notice on the permit holder

informing the permit holder of the right to a preliminary hearing

before the comptroller or the comptroller's representative and of

the time and place of the preliminary hearing. The notice must be

personally served on the permit holder or an officer, employee,

or agent of the permit holder or sent by certified or registered

mail, return receipt requested, to the permit holder's mailing

address as it appears in the comptroller's records. The notice

must state the alleged violations that constitute the grounds for

summary suspension. The suspension is effective at the time the

notice is served. If notice is served in person, the permit

holder shall immediately surrender the permit to the comptroller.

If notice is served by mail, the permit holder shall immediately

return the permit to the comptroller.

(f) Section 155.059, governing hearings for final suspension or

revocation of a permit under this chapter, governs a final

administrative hearing.

Added by Acts 1995, 74th Leg., ch. 1000, Sec. 49, eff. Oct. 1,

1995. Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 19.85, eff.

Sept. 1, 1997.

Sec. 155.0592. DISCIPLINARY ACTION FOR CERTAIN VIOLATIONS. (a)

A retailer is subject to disciplinary action as provided by this

section if:

(1) an agent or employee of the retailer commits an offense

under Subchapter H, Chapter 161, Health and Safety Code; and

(2) the retailer, 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 as provided by this subchapter, that a permit

holder has violated Subchapter H or K, Chapter 161, Health and

Safety Code, at a place of business for which a permit is issued,

the comptroller may suspend the permit for that place of business

or administratively assess a fine as follows:

(1) if the permit holder has not been found to have violated

Subchapter H or K, Chapter 161, Health and Safety Code, at that

place of business during the preceding 12 months, the comptroller

may require the permit holder to pay a fine in an amount not to

exceed $500;

(2) if the permit holder has been found to have violated

Subchapter H or K, Chapter 161, Health and Safety Code, at that

place of business once during the preceding 12 months, the

comptroller may require the permit holder to pay a fine in an

amount not to exceed $750; and

(3) if the permit holder has been found to have violated

Subchapter H or K, Chapter 161, Health and Safety Code, at that

place of business at least twice during the preceding 12 months,

the comptroller may require the permit holder to pay a fine in an

amount not to exceed $1,000 or suspend the permit for that place

of business for not more than three days.

(c) Except as provided by Section 155.0593, if the permit holder

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 12 months, the

comptroller shall revoke the permit.

(d) A retailer whose permit has been revoked under this section

may not apply for a retailer's permit for the same place of

business before the expiration of six months after the effective

date of the revocation.

Added by Acts 1997, 75th Leg., ch. 671, Sec. 4.08, eff. Sept. 1,

1997. Amended by Acts 1999, 76th Leg., ch. 1157, Sec. 2, eff.

Sept. 1, 1999.

Sec. 155.0593. ACTIONS OF EMPLOYEE. (a) For purposes of

Subchapter H, Chapter 161, Health and Safety Code, and the

provisions of this code relating to the sale or delivery of

cigarettes or tobacco products to a minor, the comptroller may

suspend a permit but may not revoke the permit under Section

155.0592 if the comptroller finds that:

(1) the employer has not violated Section 161.082(b), Health and

Safety Code, more than seven times at the place of business for

which the permit is issued in the 24-month period preceding the

violation in question;

(2) the employer 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 employer 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 permit holder for the purpose of

training its employees without regard to whether the employees

are located at the same place of business. This subsection

applies only to a permit holder who employs at least 100 persons

at any one time during the permit year who sell cigarettes or

tobacco products.

Added by Acts 1997, 75th Leg., ch. 671, Sec. 4.09, eff. Sept. 1,

1997.

Sec. 155.0595. HEARINGS. Unless otherwise provided by this

chapter, the comptroller shall conduct all hearings required by

this chapter in accordance with Chapter 2001, Government Code.

The comptroller may designate one or more representatives to

conduct the hearings and may prescribe the rules of procedure

governing the hearings.

Added by Acts 1991, 72nd Leg., ch. 409, Sec. 50, eff. June 7,

1991. Amended by Acts 1995, 74th Leg., ch. 76, Sec. 5.95(49),

eff. Sept. 1, 1995; Acts 1995, 74th Leg., ch. 1000, Sec. 50, eff.

Oct. 1, 1995; Acts 1997, 75th Leg., ch. 1423, Sec. 19.86, eff.

Sept. 1, 1997.

SUBCHAPTER D. RECORDS AND REPORTS

Sec. 155.101. RECORD OF PURCHASE OR RECEIPT. Each distributor,

wholesaler, bonded agent, and export warehouse shall keep records

at each place of business of all tobacco products purchased or

received. Each retailer shall keep records at a single location,

which the retailer shall designate as its principal place of

business in the state, of all tobacco products purchased and

received. These records must include the following, except that

Subdivision (7) applies to distributors only and Subdivision (8)

applies only to the purchase or receipt of tobacco products other

than cigars:

(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 tobacco

product shipment;

(4) the date and the name of the place of arrival of the tobacco

product shipment;

(5) a statement of the number, kind, and price paid for the

tobacco products;

(6) the name, address, permit number, and tax identification

number of the seller;

(7) the manufacturer's list price for the tobacco products;

(8) the net weight as listed by the manufacturer for each unit;

and

(9) any other information required by rules of the comptroller.

Acts 1981, 67th Leg., p. 1674, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1985, 69th Leg., ch. 58, Sec. 35, eff.

March 1, 1986; Acts 1991, 72nd Leg., ch. 409, Sec. 51, eff. June

7, 1991; Acts 1995, 74th Leg., ch. 1000, Sec. 51, eff. Oct. 1,

1995; Acts 1997, 75th Leg., ch. 1040, Sec. 47, eff. Sept. 1,

1997; Acts 1997, 75th Leg., ch. 1423, Sec. 19.87, eff. Sept. 1,

1997.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

285, Sec. 11, eff. September 1, 2009.

Sec. 155.102. REPORT OF SALE OR USE. (a) Each distributor and

wholesaler shall keep at each place of business in this state

records of each sale, distribution, exchange, or use of tobacco

products whether taxed under this chapter or not. Each

distributor and wholesaler shall prepare and retain an original

invoice for each transaction involving tobacco products. Each

distributor or wholesaler shall keep any supporting

documentation, including bills of lading, showing shipment and

receipt used in preparing the invoices at the place of business

of the distributor or wholesaler. The distributor or wholesaler

shall prepare and deliver a duplicate invoice to the purchaser.

(b) The records for each sale, distribution, exchange, or use of

tobacco products must show:

(1) the purchaser's name and address, permit number, or tax

identification number;

(2) the method of delivery and the name of the common carrier or

other person delivering the tobacco products;

(3) the date, amount, and type of tobacco products sold,

distributed, exchanged, or used;

(4) the price received for the tobacco products;

(5) the number and kind of tobacco products on which the tax has

been paid; and

(6) for sales from a manufacturer to a distributor, the

manufacturer's list price for the tobacco products.

(c) In addition to the information required under Subsection

(b), the records for each sale, distribution, exchange, or use of

tobacco products other than cigars must show the net weight as

listed by the manufacturer for each unit.

Acts 1981, 67th Leg., p. 1674, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1991, 72nd Leg., ch. 409, Sec. 51, eff.

June 7, 1991; Acts 1997, 75th Leg., ch. 1040, Sec. 48, eff. Sept.

1, 1997.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

285, Sec. 12, eff. September 1, 2009.

Sec. 155.103. MANUFACTURER'S RECORDS AND REPORTS. (a) A

manufacturer who sells tobacco products to a permit holder in

this state shall keep records showing:

(1) the number and kind of tobacco products sold;

(2) the date the tobacco products were sold;

(3) the name and permit number of the permit holder;

(4) the manufacturer's list price for the tobacco products;

(5) the place where the tobacco products were shipped; and

(6) the name of the common carrier.

(a-1) In addition to the information required under Subsection

(a), the records for each sale of tobacco products other than

cigars must show the net weight as listed by the manufacturer for

each unit.

(b) A manufacturer who sells tobacco products to a permit holder

in this state shall file with the comptroller, on or before the

last day of each month, a report showing the information required

to be listed by Subsections (a) and (a-1), if applicable, for the

previous month.

Acts 1981, 67th Leg., p. 1675, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1991, 72nd Leg., ch. 409, Sec. 51, eff.

June 7, 1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.88, eff.

Sept. 1, 1997; Acts 1999, 76th Leg., ch. 1467, Sec. 2.44, eff.

Oct. 1, 1999.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

285, Sec. 13, eff. September 1, 2009.

Sec. 155.104. MANUFACTURER'S REPRESENTATIVE'S RECORDS. A

manufacturer's representative shall keep the same records that

are required of a wholesaler. The manufacturer's representative

shall deliver a duplicate of the invoice required by Section

155.102 to the purchaser or recipient of the tobacco products.

Acts 1981, 67th Leg., p. 1675, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1991, 72nd Leg., ch. 409, Sec. 51, eff.

June 7, 1991.

Sec. 155.105. REPORTS BY WHOLESALERS AND DISTRIBUTORS OF CIGARS

AND TOBACCO PRODUCTS. (a) The comptroller may, when considered

necessary by the comptroller for the administration of a tax

under this chapter, require each wholesaler or distributor of

cigars and tobacco products to file with the comptroller a report

each month of sales to retailers in this state.

(b) The wholesaler or distributor shall file the report on or

before the 25th day of each month. The report must contain the

following information for the preceding calendar month's sales in

relation to each retailer:

(1) the name of the retailer and the address of the retailer's

outlet location to which the wholesaler or distributor delivered

cigars or tobacco products, including the city and zip code;

(2) the taxpayer number assigned by the comptroller to the

retailer, if the wholesaler or distributor is in possession of

the number;

(3) the tobacco permit number of the outlet location to which

the wholesaler or distributor delivered cigars or tobacco

products; and

(4) the monthly net sales made to the retailer by the wholesaler

or distributor, including:

(A) the quantity and units of cigars and tobacco products sold

to the retailer; and

(B) for each unit of tobacco products other than cigars, the net

weight as listed by the manufacturer.

(c) Except as provided by this subsection, the wholesaler or

distributor shall file the report with the comptroller

electronically. The comptroller may establish procedures for

allowing an alternative method of filing for a wholesaler or

distributor who demonstrates to the comptroller an inability to

comply with the electronic reporting requirement. If the

comptroller determines that another technological method of

filing the report is more efficient than electronic filing, the

comptroller may establish procedures requiring its use by

wholesalers and distributors.

(d) Except as provided by Section 111.006, information contained

in a report required to be filed by this section is confidential

and not subject to disclosure under Chapter 552, Government Code.

Added by Acts 2007, 80th Leg., R.S., Ch.

129, Sec. 3, eff. September 1, 2007.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

285, Sec. 14, eff. September 1, 2009.

Sec. 155.107. COMMON CARRIER RECORDS. (a) Each common carrier

shall keep records of tobacco products transported in this state.

(b) The comptroller and the attorney general are entitled to

access during regular business hours to all records pertaining to

tobacco products that are transported.

(c) The records must show for each transaction:

(1) the names and addresses of the consignor and consignee;

(2) the date of delivery; and

(3) the amount and type of tobacco products transported or

handled.

Acts 1981, 67th Leg., p. 1670, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 72, eff.

Oct. 1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 51, eff. June

7, 1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.89, eff. Sept.

1, 1997.

Sec. 155.108. BONDED AGENT'S RECORDS. (a) Each bonded agent

shall keep, at each place of business in this state, records of

all tobacco products 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 or delivery.

Acts 1981, 67th Leg., p. 1676, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1991, 72nd Leg., ch. 409, Sec. 51, eff.

June 7, 1991.

Sec. 155.110. AVAILABILITY OF RECORDS. (a) Each permit holder

shall keep records available for inspection and copying by the

comptroller and the attorney general for four years.

(b) If a permit holder's place of business is a vehicle or

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.

(c) Each permit holder who is required to keep records under

this chapter shall provide the comptroller with copies of the

records on demand.

Acts 1981, 67th Leg., p. 1676, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1985, 69th Leg., ch. 58, Sec. 38, eff.

March 1, 1986; Acts 1989, 71st Leg., ch. 240, Sec. 73, eff. Oct.

1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 51, eff. June 7,

1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.90, eff. Sept. 1,

1997; Acts 2001, 77th Leg., ch. 540, Sec. 6, eff. Sept. 1, 2001.

Sec. 155.111. DISTRIBUTOR'S REPORT. (a) A distributor shall

file with the comptroller on or before the last day of each

month, a report for the preceding month.

(b) The report must show:

(1) the date the report was made;

(2) the distributor's name and address;

(3) the month the report covers;

(4) the amount of tobacco products purchased, received, and

acquired;

(5) the manufacturer's list price of tobacco products purchased,

received, and acquired;

(6) the amount of tobacco products sold, distributed, used,

lost, or otherwise disposed of;

(7) the amount of tobacco products on hand at the beginning and

the end of the month; and

(8) any other information the comptroller requires relating to

tobacco products and to the payment of taxes due on them.

(b-1) In addition to the information required under Subsection

(b), the report must show the net weight as listed by the

manufacturer for each unit of tobacco products other than cigars

that is purchased, received, or acquired.

(c) The comptroller shall prescribe the form and content of the

report.

(d) If more than 50 percent of all untaxed tobacco products

received by the distributor in this state are actually sold

outside of this state, the distributor shall include in the

report only tobacco products that are sold in this state.

Acts 1981, 67th Leg., p. 1677, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 74, eff.

Oct. 1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 51, eff. June

7, 1991; Acts 1997, 75th Leg., ch. 1040, Sec. 49, eff. Sept. 1,

1997; Acts 1997, 75th Leg., ch. 1423, Sec. 19.91, eff. Sept. 1,

1997; Acts 1999, 76th Leg., ch. 1467, Sec. 2.45, eff. Oct. 1,

1999; Acts 2001, 77th Leg., ch. 1263, Sec. 54, eff. Oct. 1, 2001.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

285, Sec. 15, eff. September 1, 2009.

Sec. 155.112. FAILURE TO PRODUCE RECORDS. (a) A person's

failure to produce the records required by this subchapter or a

person's inability to provide other proof of tax payment, on

demand by the comptroller, is prima facie evidence that tobacco

products possessed by the person were received for the purpose of

making a first sale without payment of the tax imposed by this

chapter.

(b) This section does not apply to a person who possesses

tobacco products on which a tax of less than $50 is due, as

provided by Section 155.022.

(c) This section does not apply to a failure to produce records

or provide other proof of tax payment under Subsection (a) if the

failure results from an occurrence beyond the person's control.

Added by Acts 1991, 72nd Leg., ch. 409, Sec. 52, eff. June 7,

1991. Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 19.92, eff.

Sept. 1, 1997.

SUBCHAPTER E. ENFORCEMENT OF TAX

Sec. 155.141. DONATIONS. The comptroller may accept gifts,

grants, and donations for the administration and enforcement of

this chapter.

Added by Acts 1989, 71st Leg., ch. 240, Sec. 75, eff. Oct. 1,

1989. Amended by Acts 1997, 75th Leg., ch. 1040, Sec. 50, Sept.

1, 1997; Acts 1997, 75th Leg., ch. 1423, Sec. 19.93, eff. Sept.

1, 1997.

Sec. 155.143. SEIZURE. (a) The comptroller with or without

process may seize:

(1) tobacco products taxed under this chapter that are possessed

or controlled by a person for the purpose of selling or removing

the tobacco products in violation of this chapter;

(2) tobacco products that are removed, deposited, or concealed

by a person intending to avoid payment of taxes imposed by this

chapter;

(3) an automobile, truck, boat, conveyance, or other type of

vehicle used to remove or transport tobacco products by a person

intending to avoid payment of taxes imposed by this chapter; and

(4) equipment, paraphernalia, or other tangible personal

property used by a person intending to avoid payment of taxes

imposed by this chapter found in the place where the tobacco

products are found.

(b) An item seized under this section is forfeited to the state

and remains in the custody of the comptroller for disposition as

provided by this chapter. The seized item is not subject to

replevin.

Acts 1981, 67th Leg., p. 1678, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 76, eff.

Oct. 1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 53, eff. June

7, 1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.94, eff. Sept.

1, 1997.

Sec. 155.144. COMPTROLLER'S REPORT. (a) If the comptroller

seizes property under Section 155.143, the comptroller shall

immediately make a written report showing:

(1) the name of the person making the seizure;

(2) the place where the property was seized;

(3) the person from whom the property was seized; and

(4) an inventory of the property seized.

(b) The comptroller shall prepare the report in duplicate. The

person who seized the property shall sign the report. The

comptroller shall give the original to the person from whom the

property was seized and shall file a duplicate copy open for

public inspection in the comptroller's office.

Acts 1981, 67th Leg., p. 1678, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 77, eff.

Oct. 1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 54, eff. June

7, 1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.95, eff. Sept.

1, 1997.

Sec. 155.1445. SALE OF SEIZED TOBACCO PRODUCTS. (a) Tobacco

products are perishable items.

(b) If the seized tobacco products are in a salable condition,

the comptroller may sell the tobacco products, return the tobacco

products to the manufacturer for credit, or destroy or dispose of

the tobacco products.

(c) The price obtained at the sale is the market value for the

tobacco products sold.

(d) The comptroller shall place the proceeds from the sale of

seized tobacco products in escrow in a treasury suspense account,

pending the outcome of the forfeiture proceeding provided for in

this chapter.

(e) If a determination is made that the comptroller wrongfully

seized the tobacco products, the person entitled to the tobacco

products at the time of seizure may recover the money held in

escrow in the treasury suspense account.

Added by Acts 1991, 72nd Leg., ch. 409, Sec. 55, eff. June 7,

1991. Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 19.96, eff.

Sept. 1, 1997.

Sec. 155.145. FORFEITURE PROCEEDING. (a) The owner of property

seized under this chapter is entitled to written notice of the

seizure.

(b) The comptroller shall give the notice by certified mail,

return receipt requested, not later than the 15th day after the

date of seizure and shall include with the notice an inventory of

the property seized and a statement that the owner of property

seized is entitled to a hearing on the seizure. Service by mail

is complete when the notice is received, as evidenced by return

receipt from the U.S. Postal Service.

(c) After providing the notice and a hearing, if a hearing is

requested under Subsection (b), the comptroller may order the

forfeiture to the state of any property seized under this chapter

or the proceeds of the sale of any tobacco products seized under

this chapter if the comptroller finds that the property was used,

controlled, possessed, or concealed for the purpose of violating

any provision of this chapter.

(d) The comptroller shall hold property or proceeds forfeited

under this section in escrow until the comptroller's

determination is final and the period for filing a petition for

judicial review has expired.

Acts 1981, 67th Leg., p. 1679, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 78, eff.

Oct. 1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 56, eff. June

7, 1991; Acts 1997, 75th Leg., ch. 1040, Sec. 51, eff. Sept. 1,

1997; Acts 1997, 75th Leg., ch. 1423, Sec. 19.97, eff. Sept. 1,

1997.

Sec. 155.1451. DISPOSITION OF FORFEITED PROPERTY. (a) The

comptroller may sell property forfeited to the state at public or

private sale in any commercially reasonable manner.

(b) Subject to the provisions of Section 155.153, the

comptroller shall deposit the sale proceeds, less expenses of

seizure, court costs, and any investigation and audit costs, in

the state treasury.

(c) The comptroller shall use the sale proceeds to operate and

administer the tobacco products tax program up to the amount

appropriated by the legislature for this purpose. The comptroller

shall allocate any sale proceeds that exceed the legislative

appropriation as provided by Subchapter H. Any unused

appropriations remain in the general revenue fund.

Added by Acts 1991, 72nd Leg., ch. 409, Sec. 57, eff. June 7,

1991. Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 19.98, eff.

Sept. 1, 1997.

Sec. 155.150. SEIZURE OR SALE NO DEFENSE. The seizure,

forfeiture, and sale of tobacco products or property under this

chapter, with or without court action, is not a defense to

criminal prosecution for an offense or from liability for a

penalty under this chapter.

Acts 1981, 67th Leg., p. 1680, ch. 389, Sec. 1, eff. Jan. 1,

1982.

Sec. 155.151. WAIVER PERMITTED. (a) The comptroller may waive

a forfeiture proceeding for property seized under Section 155.143

of this code if the owner or possessor of the property:

(1) pays the tax due; and

(2) pays to the state through the comptroller an additional sum

equal to the tax due.

(b) The comptroller may make a compromise with a person before

or after a claim is filed in court. The comptroller shall keep a

record open for public inspection of compromises and waivers of

forfeiture made under this section.

Acts 1981, 67th Leg., p. 1680, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 81, eff.

Oct. 1, 1989; Acts 1997, 75th Leg., ch. 1423, Sec. 19.99, eff.

Sept. 1, 1997.

Sec. 155.152. PAYMENT TO TREASURY. The comptroller shall

deposit all taxes collected under this chapter, after payment of

costs, in the treasury to be allocated as provided by Subchapter

H.

Acts 1981, 67th Leg., p. 1680, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 82, eff.

Oct. 1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 58, eff. June

7, 1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.100, eff. Sept.

1, 1997.

Sec. 155.153. PREFERRED STATE TAX LIEN. (a) All taxes, fines,

interest, penalties, and costs due under this chapter are secured

by a preferred lien in favor of the state, first and prior to all

other existing or future liens, contractual or statutory, legal

or equitable, regardless of the time the lien originated, on any

property seized and forfeited under this chapter.

(b) A lienholder who establishes an interest in the property is

entitled to recover any proceeds remaining after payment of all

taxes, interest, penalties, and costs due to the state.

Added by Acts 1991, 72nd Leg., ch. 409, Sec. 59, eff. June 7,

1991.

Sec. 155.154. DONATIONS. The comptroller may accept gifts,

grants, and donations for the administration and enforcement of

this chapter.

Added by Acts 1991, 72nd Leg., ch. 409, Sec. 59, eff. June 7,

1991. Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 19.101,

eff. Sept. 1, 1997.

Sec. 155.155. RECIPROCAL AGREEMENTS. (a) The comptroller may

enter into a reciprocal agreement with a tax official of another

state or an official of the United States allowing the exchange

of information received by, recorded by, prepared by, furnished

to, or collected by the comptroller with respect to the

investigation and enforcement of this chapter for any tax,

penalty, interest, fine, forfeiture, or offense.

(b) This section does not permit the exchange of information

made confidential by this chapter.

Added by Acts 1991, 72nd Leg., ch. 409, Sec. 59, eff. June 7,

1991. Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 19.102,

eff. Sept. 1, 1997.

SUBCHAPTER F. ADMINISTRATION BY COMPTROLLER

Sec. 155.181. COMPLIANCE INVESTIGATION AND RECOVERY OF COSTS.

(a) If the comptroller has reason to believe that a person has

failed to pay a tax or penalty in the proper manner when due or

otherwise failed to comply with this chapter, the comptroller may

employ auditors and investigators to determine compliance and any

amount due. If the comptroller determines that the person has not

paid the tax or penalty or has failed to comply with this

chapter, the comptroller may require the person to pay the

reasonable expenses incurred in the compliance investigation and

audit as an additional penalty.

(b) The comptroller shall deposit funds paid under this section

to the credit of the general revenue fund in the treasury to be

used for making audits, conducting investigations, or as

otherwise appropriated. The comptroller may use other funds

available for audits as appropriated by the legislature.

Acts 1981, 67th Leg., p. 1681, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 83, eff.

Oct. 1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 61, eff. June

7, 1991; Acts 1995, 74th Leg., ch. 1000, Sec. 52, eff. Oct. 1,

1995; Acts 1997, 75th Leg., ch. 1423, Sec. 19.104, eff. Sept. 1,

1997.

Sec. 155.182. PAYMENT OF DOUBLE AMOUNT. (a) If the comptroller

finds that a person has sold tobacco products without the tax

having been paid, the comptroller may require the person to pay

the state through the comptroller a sum equal to twice the amount

of tax due.

(b) If a person does not furnish the comptroller with any

evidence showing payment of the tax on tobacco products purchased

by the person, it is presumed that the tobacco products were sold

without reporting and paying the tax.

Acts 1981, 67th Leg., p. 1681, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 84, eff.

Oct. 1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 62, eff. June

7, 1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.105, eff. Sept.

1, 1997.

Sec. 155.183. INSPECTION. (a) To determine the tax liability

of a person dealing in tobacco products or compliance by the

person with this chapter, the comptroller may:

(1) inspect any premises, including a vending machine and its

contents, where tobacco products are manufactured, produced,

stored, transported, sold, or offered for sale or exchange;

(2) remain on the premises as long as necessary to determine the

tax liability or compliance with this chapter;

(3) examine the records required by this chapter or other

records, books, documents, papers, accounts, and objects that the

comptroller determines are necessary for conducting a complete

examination; and

(4) examine stocks of tobacco products.

(b) A person dealing in tobacco products may not:

(1) fail to produce, on the comptroller's demand, records

required by this chapter; or

(2) hinder or prevent the inspection of records or the

examination of the premises.

Acts 1981, 67th Leg., p. 1681, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 85, eff.

Oct. 1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 63, eff. June

7, 1991; Acts 1995, 74th Leg., ch. 1000, Sec. 53, eff. Oct. 1,

1995; Acts 1997, 75th Leg., ch. 1423, Sec. 19.106, eff. Sept. 1,

1997.

Sec. 155.184. CREDIT FOR TAX PAID. (a) The comptroller may

adopt rules providing for a credit or refund for tax paid on

tobacco products if the tobacco products have become unfit for

use or consumption or unsalable.

(b) The comptroller may not allow a credit or refund under this

section unless the comptroller is satisfied that the tobacco

products are unfit for use or consumption or unsalable or have

been returned to the manufacturer.

Acts 1981, 67th Leg., p. 1682, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 86, eff.

Oct. 1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 63, eff. June

7, 1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.107, eff. Sept.

1, 1997.

Sec. 155.185. DEFICIENCY DETERMINATION, PENALTIES, AND INTEREST.

(a) If the comptroller has reasonable cause to believe that a

tax report or the amount of tax is inaccurate, the comptroller

may compute and determine the amount of tax, penalty, and

interest to be paid from information contained in the report or

from any other information available to the comptroller.

(b) On making a deficiency determination, the comptroller shall

notify the person by personal service or by mail. Service by mail

is complete when the notice is deposited with the U.S. Postal

Service.

Added by Acts 1991, 72nd Leg., ch. 409, Sec. 64, eff. June 7,

1991. Amended by Acts 1995, 74th Leg., ch. 1000, Sec. 54, eff.

Oct. 1, 1995; Acts 1997, 75th Leg., ch. 1423, Sec. 19.108, eff.

Sept. 1, 1997; Acts 1999, 76th Leg., ch. 1467, Sec. 2.46, eff.

Oct.

State Codes and Statutes

Statutes > Texas > Tax-code > Title-2-state-taxation > Chapter-155-cigars-and-tobacco-products-tax

TAX CODE

TITLE 2. STATE TAXATION

SUBTITLE E. SALES, EXCISE, AND USE TAXES

CHAPTER 155. CIGARS AND TOBACCO PRODUCTS TAX

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 155.001. DEFINITIONS. In this chapter:

(1) "Bonded agent" means a person in this state who is an agent

of a person outside this state and receives cigars and tobacco

products in interstate commerce and stores the cigars and tobacco

products for distribution or delivery to distributors under

orders from the person outside this state.

(2) "Cigar" means a roll of fermented tobacco that is wrapped in

tobacco and the main stream of smoke from which produces an

alkaline reaction to litmus paper.

(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 tobacco products for

personal consumption.

(6) "Distributor" means a person who:

(A) receives tobacco products for the purpose of making a first

sale in this state from a manufacturer outside the state or

within the state or otherwise brings or causes to be brought into

this state tobacco products for sale, use, or consumption;

(B) manufactures or produces tobacco products; or

(C) is an importer or import broker.

(7) "Export warehouse" means a person in this state who receives

tobacco products from manufacturers and stores the tobacco

products for the purpose of making sales to authorized persons

for resale, use, or consumption outside the United States.

(8) "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 tobacco products in

intrastate commerce;

(B) the first use or consumption of tobacco products in this

state; or

(C) the loss of tobacco products in this state whether through

negligence, theft, or other unaccountable loss.

(9) "Importer" or "import broker" means a person who ships,

transports, or imports into this state tobacco products

manufactured or produced outside the United States for the

purpose of making a first sale in this state.

(10) "Manufacturer" means a person who manufactures or produces

tobacco products and sells tobacco products to a distributor.

(11) "Manufacturer's representative" means a person employed by

a manufacturer to sell or distribute the manufacturer's tobacco

products.

(12) "Permit holder" means a bonded agent, distributor,

wholesaler, manufacturer, importer, or retailer required to

obtain a permit under Section 155.041.

(13) "Place of business" means:

(A) a commercial business location where tobacco products are

sold;

(B) a commercial business location where tobacco products are

kept for sale or consumption or otherwise stored; or

(C) a vehicle from which tobacco products are sold.

(14) "Retailer" means a person who engages in the practice of

selling tobacco products to consumers and includes the owner of a

coin-operated vending machine.

(15) "Tobacco product" means:

(A) a cigar;

(B) smoking tobacco, including granulated, plug-cut, crimp-cut,

ready-rubbed, and any form of tobacco suitable for smoking in a

pipe or as a cigarette;

(C) chewing tobacco, including Cavendish, Twist, plug, scrap,

and any kind of tobacco suitable for chewing;

(D) snuff or other preparations of pulverized tobacco; or

(E) an article or product that is made of tobacco or a tobacco

substitute and that is not a cigarette.

(16) "Wholesaler" means a person, including a manufacturer's

representative, who sells or distributes tobacco products in this

state for resale but who is not a distributor.

Acts 1981, 67th Leg., p. 1666, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 2,

Sec. 7, eff. Oct. 2, 1984; Acts 1985, 69th Leg., ch. 58, Sec. 21,

eff. March 1, 1986; Acts 1991, 72nd Leg., ch. 409, Sec. 45, eff.

June 7, 1991; Acts 1995, 74th Leg., ch. 705, Sec. 11, eff. Sept.

1, 1995; Acts 1997, 75th Leg., ch. 165, Sec. 30.263, eff. Sept.

1, 1997; Acts 1997, 75th Leg., ch. 1040, Sec. 46, eff. Sept. 1,

1997; Acts 2001, 77th Leg., ch. 540, Sec. 4, eff. Sept. 1, 2001;

Acts 2001, 77th Leg., ch. 1263, Sec. 51, eff. Oct. 1, 2001.

Sec. 155.002. STORAGE. (a) The commercial business location

where tobacco products 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.

Added by Acts 2001, 77th Leg., ch. 540, Sec. 5, eff. Sept. 1,

2001. Amended by Acts 2003, 78th Leg., ch. 209, Sec. 27, eff.

Oct. 1, 2003.

SUBCHAPTER B. IMPOSITION AND RATE OF TAX

Sec. 155.021. TAX IMPOSED ON CIGARS. (a) A tax is imposed and

becomes due and payable when a permit holder receives cigars for

the purpose of making a first sale in this state.

(b) The tax rates are:

(1) one cent per 10 or fraction of 10 on cigars weighing three

pounds or less per thousand;

(2) $7.50 per thousand on cigars that:

(A) weigh more than three pounds per thousand; and

(B) sell at factory list price, exclusive of any trade discount,

special discount, or deal, for 3.3 cents or less each;

(3) $11 per thousand on cigars that:

(A) weigh more than three pounds per thousand;

(B) sell at factory list price, exclusive of any trade discount,

special discount, or deal, for more than 3.3 cents each; and

(C) contain no substantial amount of nontobacco ingredients; and

(4) $15 per thousand on cigars that:

(A) weigh more than three pounds per thousand;

(B) sell at factory list price, exclusive of any trade discount,

special discount, or deal, for more than 3.3 cents each; and

(C) contain a substantial amount of nontobacco ingredients.

(c) Cigars taxed under Subsections (b)(3) and (b)(4) of this

section are presumed to contain a substantial amount of

nontobacco ingredients unless the report on the cigars required

by Section 155.111 of this code is accompanied by an affidavit

stating that specific cigars described in the report do not

contain sheet wrapper, sheet binder, or sheet filler. If the

manufacturer prepares the report, the manufacturer shall make the

affidavit. If the distributor prepares the report, the

manufacturer and the distributor shall make the affidavit.

Acts 1981, 67th Leg., p. 1667, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 2,

Sec. 5, eff. Oct. 2, 1984; Acts 1991, 72nd Leg., ch. 409, Sec.

46, eff. June 7, 1991.

Sec. 155.0211. TAX IMPOSED ON TOBACCO PRODUCTS OTHER THAN

CIGARS. (a) A tax is imposed and becomes due and payable when a

permit holder receives tobacco products other than cigars, for

the purpose of making a first sale in this state.

(b) Except as provided by Subsection (c), the tax rate for each

can or package of a tobacco product other than cigars is $1.22

per ounce and a proportionate rate on all fractional parts of an

ounce.

(b-1) Notwithstanding Subsection (b) and except as provided by

Subsection (c), for the state fiscal year beginning September 1,

2012, the tax rate for each can or package of a tobacco product

other than cigars is $1.19 per ounce and a proportionate rate on

all fractional parts of an ounce. This subsection expires

December 1, 2013.

(b-2) Notwithstanding Subsection (b) and except as provided by

Subsection (c), for the state fiscal year beginning September 1,

2011, the tax rate for each can or package of a tobacco product

other than cigars is $1.16 per ounce and a proportionate rate on

all fractional parts of an ounce. This subsection expires

December 1, 2012.

(b-3) Notwithstanding Subsection (b) and except as provided by

Subsection (c), for the state fiscal year beginning September 1,

2010, the tax rate for each can or package of a tobacco product

other than cigars is $1.13 per ounce and a proportionate rate on

all fractional parts of an ounce. This subsection expires

December 1, 2011.

(b-4) Notwithstanding Subsection (b) and except as provided by

Subsection (c), for the state fiscal year beginning September 1,

2009, the tax rate for each can or package of a tobacco product

other than cigars is $1.10 per ounce and a proportionate rate on

all fractional parts of an ounce. This subsection expires

December 1, 2010.

(c) The tax imposed on a can or package of a tobacco product

other than cigars that weighs less than 1.2 ounces is equal to

the amount of the tax imposed on a can or package of a tobacco

product that weighs 1.2 ounces.

(d) The computation of the tax under this section and the

applicability of Subsection (c) shall be based on the net weight

as listed by the manufacturer. The total tax to be imposed on a

unit that contains multiple individual cans or packages is the

sum of the taxes imposed by this section on each individual can

or package intended for sale or distribution at retail.

(e) A change in the tax rate in effect for a state fiscal year

that occurs in accordance with this section does not affect taxes

imposed before that fiscal year, and the rate in effect when

those taxes were imposed continues in effect for purposes of the

liability for and collection of those taxes.

Added by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 2, Sec. 6,

eff. Oct. 2, 1984. Amended by Acts 1987, 70th Leg., 2nd C.S., ch.

5, art. 4, Sec. 2; Acts 1990, 71st Leg., 6th C.S., ch. 5, Sec.

2.02, eff. July 1, 1990; Acts 1991, 72nd Leg., ch. 409, Sec. 47,

eff. June 7, 1991.

Amended by:

Acts 2006, 79th Leg., 3rd C.S., Ch.

7, Sec. 2, eff. January 1, 2007.

Acts 2009, 81st Leg., R.S., Ch.

285, Sec. 10, eff. September 1, 2009.

Sec. 155.022. FIRST SALE OF TOBACCO PRODUCTS. A person who

receives or possesses tobacco products on which a tax of more

than $50 would be due if the receipt or possession were for the

purpose of making a first sale in this state is presumed to

receive or possess the tobacco products for the purpose of making

a first sale in this state. This presumption does not apply to

common carriers or to manufacturers. A tax is imposed on

manufacturers who manufacture tobacco products in this state at

the time the tobacco products are first transferred in connection

with a purchase, sale, or any exchange for value in intrastate

commerce. The distribution or delivery of tobacco products by a

bonded agent to a permitted distributor in this state, under

instructions received from outside this state, is not a first

sale.

Acts 1981, 67th Leg., p. 1668, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1991, 72nd Leg., ch. 409, Sec. 47, eff.

June 7, 1991.

Sec. 155.023. PAYMENT OF TAX. (a) A distributor shall pay the

tax on tobacco products received for the purpose of making a

first sale at the time the distributor files the report required

by Section 155.111. A distributor shall pay the tax by cashier's

check payable to the comptroller, by electronic funds transfer to

the comptroller or by any other method of payment authorized by

the comptroller.

(b) The person in possession of tobacco products has the burden

to prove payment of the tax on the products.

Acts 1981, 67th Leg., p. 1668, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1991, 72nd Leg., ch. 409, Sec. 47, eff.

June 7, 1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.77, eff.

Sept. 1, 1997.

Sec. 155.024. EXCEPTION FOR PERSONAL USE. A person who

personally transports cigars or tobacco products in quantities or

amounts that would ordinarily retail at 25 cents or less is not

required to pay the tax imposed by this chapter if the person

uses the cigars or tobacco products and does not sell them or

offer them for sale.

Acts 1981, 67th Leg., p. 1662, ch. 389, Sec. 1, eff. Jan. 1,

1982.

Sec. 155.026. PENALTY FOR FAILURE TO PAY TAX. (a) A

distributor who fails to timely pay the tax when due shall pay

five percent of the amount of tax then due as a penalty, and if

the distributor fails to pay the tax on or before the 30th day

after the day on which the tax is due, the distributor shall pay

an additional five percent.

(b) The minimum penalty imposed by this section is $50.

(c) The dishonor of a check delivered to the treasury for

payment of taxes constitutes a failure to pay the tax when due.

Acts 1981, 67th Leg., p. 1669, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1983, 68th Leg., p. 451, ch. 93, Sec. 3,

eff. Sept. 1, 1983; Acts 1991, 72nd Leg., ch. 409, Sec. 47, eff.

June 7, 1991.

Sec. 155.027. VENUE. Venue of a suit for collection of a

penalty for late payment of taxes is in Travis County.

Acts 1981, 67th Leg., p. 1669, ch. 389, Sec. 1, eff. Jan. 1,

1982.

SUBCHAPTER C. PERMITS

Sec. 155.041. PERMITS. (a) A person may not engage in business

as a distributor, wholesaler, bonded agent, manufacturer,

importer, or retailer unless the person has applied for and

received the applicable permit from the comptroller.

(b) Each distributor, wholesaler, bonded agent, manufacturer,

importer, or retailer shall obtain a permit for each place of

business owned or operated by the distributor, wholesaler, bonded

agent, manufacturer, importer, or retailer.

(c) The comptroller shall prescribe the form and content of an

application for a permit and shall furnish the form on request of

an applicant.

(d) The applicant shall accurately complete all information

required by the application and provide the comptroller with

additional information the comptroller considers necessary.

(e) The comptroller may require each corporation, association,

joint venture, syndicate, partnership, or proprietorship to

furnish financial information regarding the applicant and to

provide the identity of each officer, director, stockholder

owning 10 percent or more of the outstanding stock, partner,

member, owner, or managing employee.

(f) Each distributor, wholesaler, and retailer that applies for

a permit to sell tobacco products from a vehicle must provide the

make, model, vehicle identification number, registration number,

and any other information required by the comptroller.

(g) All financial information provided under this section is

confidential and not subject to Chapter 552, Government Code.

(h) Permits for engaging in business as a distributor,

wholesaler, bonded agent, manufacturer, importer, or retailer

shall be governed exclusively by the provisions of this code.

Acts 1981, 67th Leg., p. 1669, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1985, 69th Leg., ch. 58, Sec. 23, eff.

March 1, 1986; Acts 1989, 71st Leg., ch. 240, Sec. 54, eff. Oct.

1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 48, eff. June 7,

1991; Acts 1995, 74th Leg., ch. 76, Sec. 5.95(88), eff. Sept. 1,

1995; Acts 1995, 74th Leg., ch. 1000, Sec. 47, eff. Oct. 1, 1995;

Acts 1997, 75th Leg., ch. 1423, Sec. 19.78, eff. Sept. 1, 1997;

Acts 2001, 77th Leg., ch. 1263, Sec. 52, eff. Oct. 1, 2001.

Sec. 155.0415. SALES: PERMIT HOLDERS AND NONPERMIT HOLDERS. (a)

Except for retail sales to consumers, tobacco products may only

be sold or distributed by and between permit holders.

(b) A person who is not a permit holder may not sell or

distribute tobacco products on which a tax of more than $50 has

been paid or is due.

Added by Acts 1991, 72nd Leg., ch. 409, Sec. 49, eff. June 7,

1991.

Sec. 155.045. COMBINATION PERMIT. The comptroller may issue a

combination permit for cigarettes and tobacco products under

Section 154.102. A person who receives a combination permit is

subject to the provisions of this chapter in the same manner as a

person holding a single permit under this chapter.

Acts 1981, 67th Leg., p. 1670, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1985, 69th Leg., ch. 58, Sec. 24, eff.

March 1, 1986; Acts 1989, 71st Leg., ch. 240, Sec. 58, eff. Oct.

1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 50, eff. June 7,

1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.79, eff. Sept. 1,

1997.

Sec. 155.048. ISSUANCE OF PERMITS. (a) The comptroller shall

issue a permit to a distributor, wholesaler, bonded agent,

manufacturer, importer, or retailer if the comptroller:

(1) has received an application and fee, if required;

(2) does not reject the application and deny the permit under

Section 155.0481; and

(3) determines that issuing the permit will not jeopardize the

administration and enforcement of this chapter.

(b) The permit shall be issued for a designated place of

business, except as provided by Section 155.053.

(c) The permits are nonassignable.

(d) The permit must indicate the type of permit that it is and

authorize the sale of tobacco products in this state. The permit

must show that it is revocable and shall be forfeited or

suspended if the conditions of issuance, provisions of this

chapter, or rules of the comptroller are violated.

Acts 1981, 67th Leg., p. 1670, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1985, 69th Leg., ch. 58, Sec. 26, eff.

March 1, 1986; Acts 1989, 71st Leg., ch. 240, Sec. 61, eff. Oct.

1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 50, eff. June 7,

1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.80, eff. Sept. 1,

1997; Acts 2001, 77th Leg., ch. 1263, Sec. 53, eff. Oct. 1, 2001.

Sec. 155.0481. DENIAL OF PERMIT. The comptroller may reject an

application and deny a permit if the comptroller finds, after

notice and opportunity for hearing, any of the following:

(1) the premises where business will be conducted are not

adequate to protect the tobacco products; or

(2) the applicant or managing employee, or, if the applicant is

a corporation, an officer, director, manager, or any stockholder

who holds directly or through family or partner relationship 10

percent or more of the corporation's stock, or, if the applicant

is a partnership, a partner or manager:

(A) has failed to disclose any information required by Sections

155.041(d), (e), and (f), including prior business experience,

financial condition of the permit holder, present or previous

business affiliations, prior employment, and any conviction of a

felony, or has made a false statement in the application; or

(B) has previously violated provisions of this chapter.

Added by Acts 1991, 72nd Leg., ch. 409, Sec. 50, eff. June 7,

1991. Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 19.81, eff.

Sept. 1, 1997.

Sec. 155.049. LICENSING YEAR; FEES. (a) A permit required by

this chapter expires on the last day of February of each year,

except the retailer's permit required by Section 155.041 expires

on the last day of May of each even-numbered year.

(b) An application for a permit required by this chapter must be

accompanied by a fee of:

(1) $300 for a bonded agent's permit;

(2) $300 for a distributor's permit;

(3) $200 for a wholesaler's permit;

(4) $15 for each permit for a vehicle if the applicant is also

applying for a permit as a bonded agent, distributor, or

wholesaler or has received a current permit from the comptroller

under Sections 155.041 and 155.048; and

(5) $180 for a retailer's permit.

(c) Repealed by Acts 1997, 75th Leg., ch. 671, Sec. 4.06(b),

eff. Sept. 1, 1997.

(d) For a new or renewal permit required by Section 155.041, the

comptroller shall prorate the fee according to the number of

months remaining during the calendar year that the permit is to

be in effect.

(e) A person who does not obtain a permit each year in a timely

manner must pay a late fee of $50 in addition to the application

fee for the permit.

(f) If at the date of issuance a permit will expire within three

months, the comptroller may collect the prorated permit fee or

the fee for a current year and, with the consent of the permit

holder, may collect the fee for the next permit year and issue a

permit or permits for both periods, as applicable.

(g) Expired.

Acts 1981, 67th Leg., p. 1670, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1985, 69th Leg., ch. 58, Sec. 27, eff.

March 1, 1986; Acts 1989, 71st Leg., ch. 240, Sec. 62, eff. Oct.

1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 50, eff. June 7,

1991; Acts 1997, 75th Leg., ch. 671, Sec. 4.06, eff. Sept. 1,

1997; Acts 1997, 75th Leg., ch. 1423, Sec. 19.82, eff. Sept. 1,

1997.

Sec. 155.050. PAYMENT FOR PERMITS. (a) An applicant for a

permit required by Section 155.041 shall send the required fee

with the application.

(b) The payment must be in cash or by money order or check.

(c) A permit may not be issued in exchange for a check until

after the comptroller has received full payment on the check.

Acts 1981, 67th Leg., p. 1671, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 63, eff.

Oct. 1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 50, eff. June

7, 1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.83, eff. Sept.

1, 1997.

Sec. 155.053. DISPLAY OF PERMIT. (a) Each permit holder shall

keep the permit on public display at the place of business for

which the permit was issued.

(b) Each permit holder who has a permit assigned to a vehicle

shall post the permit in a conspicuous place on the vehicle.

(c) Each retailer who operates a vending machine that includes

tobacco products shall place a retailer's permit on the machine.

Acts 1981, 67th Leg., p. 1671, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1985, 69th Leg., ch. 58, Sec. 29, eff.

March 1, 1986; Acts 1991, 72nd Leg., ch. 409, Sec. 50, eff. June

7, 1991.

Sec. 155.058. REVENUE. (a) Except as provided by Subsection

(b), revenue from the sale of permits to distributors,

wholesalers, and bonded agents is allocated in the same manner

that other revenue is allocated by Subchapter H.

(b) Revenue from the sale of retailer's permits shall be

deposited to the general revenue fund and may be appropriated

only as provided by this section. The money may be appropriated

first to the comptroller for administration of licensing of

retailers under this chapter or Chapter 154.

(c) If, after any appropriation is made under Subsection (b),

revenue remains from the sale of retailer's permits, the

remaining money may be appropriated to the comptroller for

administration and enforcement of Subchapters H, K, and N,

Chapter 161, Health and Safety Code, and to the Texas Department

of Health, for the administration and enforcement of Section

161.253, Health and Safety Code.

(d) If, after any appropriation is made under Subsections (b)

and (c), revenue remains from the sale of retailer's permits, the

remaining money may be appropriated to the Texas Department of

Health to administer the commissioner of public health's

responsibilities under Section 161.301, Health and Safety Code.

(e) If, after any appropriation is made under Subsections (b),

(c), and (d), revenue remains from the sale of retailer's

permits, the remaining money may be appropriated to the

appropriate entity to administer that entity's responsibilities

under Section 161.302, Health and Safety Code.

Acts 1981, 67th Leg., p. 1672, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1985, 69th Leg., ch. 58, Sec. 33, eff.

March 1, 1986; Acts 1991, 72nd Leg., ch. 409, Sec. 50, eff. June

7, 1991; Acts 1997, 75th Leg., ch. 671, Sec. 4.07, eff. Sept. 1,

1997.

Sec. 155.059. FINAL SUSPENSION OR REVOCATION OF PERMIT. (a)

The comptroller may revoke or suspend a person's permit if the

comptroller finds, after notice and hearing as provided by this

section, that the permit holder violated this chapter or an

administrative rule made under this chapter.

(b) If the comptroller intends to suspend or revoke a permit,

the comptroller shall provide the permit holder with written

notice that includes a statement:

(1) of the reason for the intended revocation or suspension;

(2) that the permit holder is entitled to a hearing by the

comptroller on the proposed suspension or revocation; and

(3) of the date, time, and place of the hearing.

(c) The comptroller shall deliver the written notice by personal

service or by mail to the permit holder's mailing address as it

appears in the comptroller's records. Service by mail is complete

when the notice is deposited with the United States Postal

Service.

(d) The comptroller shall give the permit holder not less than

10 days' notice of a final hearing.

(e) A permit holder may appeal the decision of the comptroller

to a district court in Travis County not later than the 30th day

after the date the comptroller's decision becomes final.

(f) A person whose permit is suspended or revoked may not sell,

offer for sale, or distribute tobacco products from the place of

business to which the permit applied until a new permit is

granted or the suspension is removed.

(g) If the comptroller suspends or revokes a permit, the

comptroller shall provide written notice of the suspension or

revocation, within a reasonable time, to each permit holder in

the state. A permit holder violates Section 155.0415(a) by

selling or distributing tobacco products to a person whose permit

has been suspended or revoked only after the permit holder

receives written notice of the suspension or revocation from the

comptroller.

Acts 1981, 67th Leg., p. 1672, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1985, 69th Leg., ch. 58, Sec. 34, eff.

March 1, 1986; Acts 1989, 71st Leg., ch. 240, Sec. 67, eff. Oct.

1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 50, eff. June 7,

1991; Acts 1995, 74th Leg., ch. 1000, Sec. 48, eff. Oct. 1, 1995;

Acts 1997, 75th Leg., ch. 1423, Sec. 19.84, eff. Sept. 1, 1997;

Acts 1999, 76th Leg., ch. 1467, Sec. 2.43, eff. Oct. 1, 1999.

Sec. 155.0591. SUMMARY SUSPENSION OF A PERMIT. (a) The

comptroller may suspend a person's permit without notice or a

hearing for the person's failure to comply with this chapter or a

rule adopted under this chapter if the person's continued

operation constitutes an immediate and substantial threat to the

collection of taxes imposed by this chapter and attributable to

the person's operation.

(b) If the comptroller summarily suspends a person's permit,

proceedings for a preliminary hearing before the comptroller or

the comptroller's representative must be initiated simultaneously

with the summary suspension. The preliminary hearing shall be set

for a date not later than 10 days after the date of the summary

suspension, unless the parties agree to a later date.

(c) At the preliminary hearing, the permit holder must show

cause why the permit should not remain suspended pending a final

hearing on suspension or revocation.

(d) Chapter 2001, Government Code, does not apply to a summary

suspension under this section.

(e) To initiate a proceeding to suspend summarily a person's

permit, the comptroller shall serve notice on the permit holder

informing the permit holder of the right to a preliminary hearing

before the comptroller or the comptroller's representative and of

the time and place of the preliminary hearing. The notice must be

personally served on the permit holder or an officer, employee,

or agent of the permit holder or sent by certified or registered

mail, return receipt requested, to the permit holder's mailing

address as it appears in the comptroller's records. The notice

must state the alleged violations that constitute the grounds for

summary suspension. The suspension is effective at the time the

notice is served. If notice is served in person, the permit

holder shall immediately surrender the permit to the comptroller.

If notice is served by mail, the permit holder shall immediately

return the permit to the comptroller.

(f) Section 155.059, governing hearings for final suspension or

revocation of a permit under this chapter, governs a final

administrative hearing.

Added by Acts 1995, 74th Leg., ch. 1000, Sec. 49, eff. Oct. 1,

1995. Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 19.85, eff.

Sept. 1, 1997.

Sec. 155.0592. DISCIPLINARY ACTION FOR CERTAIN VIOLATIONS. (a)

A retailer is subject to disciplinary action as provided by this

section if:

(1) an agent or employee of the retailer commits an offense

under Subchapter H, Chapter 161, Health and Safety Code; and

(2) the retailer, 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 as provided by this subchapter, that a permit

holder has violated Subchapter H or K, Chapter 161, Health and

Safety Code, at a place of business for which a permit is issued,

the comptroller may suspend the permit for that place of business

or administratively assess a fine as follows:

(1) if the permit holder has not been found to have violated

Subchapter H or K, Chapter 161, Health and Safety Code, at that

place of business during the preceding 12 months, the comptroller

may require the permit holder to pay a fine in an amount not to

exceed $500;

(2) if the permit holder has been found to have violated

Subchapter H or K, Chapter 161, Health and Safety Code, at that

place of business once during the preceding 12 months, the

comptroller may require the permit holder to pay a fine in an

amount not to exceed $750; and

(3) if the permit holder has been found to have violated

Subchapter H or K, Chapter 161, Health and Safety Code, at that

place of business at least twice during the preceding 12 months,

the comptroller may require the permit holder to pay a fine in an

amount not to exceed $1,000 or suspend the permit for that place

of business for not more than three days.

(c) Except as provided by Section 155.0593, if the permit holder

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 12 months, the

comptroller shall revoke the permit.

(d) A retailer whose permit has been revoked under this section

may not apply for a retailer's permit for the same place of

business before the expiration of six months after the effective

date of the revocation.

Added by Acts 1997, 75th Leg., ch. 671, Sec. 4.08, eff. Sept. 1,

1997. Amended by Acts 1999, 76th Leg., ch. 1157, Sec. 2, eff.

Sept. 1, 1999.

Sec. 155.0593. ACTIONS OF EMPLOYEE. (a) For purposes of

Subchapter H, Chapter 161, Health and Safety Code, and the

provisions of this code relating to the sale or delivery of

cigarettes or tobacco products to a minor, the comptroller may

suspend a permit but may not revoke the permit under Section

155.0592 if the comptroller finds that:

(1) the employer has not violated Section 161.082(b), Health and

Safety Code, more than seven times at the place of business for

which the permit is issued in the 24-month period preceding the

violation in question;

(2) the employer 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 employer 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 permit holder for the purpose of

training its employees without regard to whether the employees

are located at the same place of business. This subsection

applies only to a permit holder who employs at least 100 persons

at any one time during the permit year who sell cigarettes or

tobacco products.

Added by Acts 1997, 75th Leg., ch. 671, Sec. 4.09, eff. Sept. 1,

1997.

Sec. 155.0595. HEARINGS. Unless otherwise provided by this

chapter, the comptroller shall conduct all hearings required by

this chapter in accordance with Chapter 2001, Government Code.

The comptroller may designate one or more representatives to

conduct the hearings and may prescribe the rules of procedure

governing the hearings.

Added by Acts 1991, 72nd Leg., ch. 409, Sec. 50, eff. June 7,

1991. Amended by Acts 1995, 74th Leg., ch. 76, Sec. 5.95(49),

eff. Sept. 1, 1995; Acts 1995, 74th Leg., ch. 1000, Sec. 50, eff.

Oct. 1, 1995; Acts 1997, 75th Leg., ch. 1423, Sec. 19.86, eff.

Sept. 1, 1997.

SUBCHAPTER D. RECORDS AND REPORTS

Sec. 155.101. RECORD OF PURCHASE OR RECEIPT. Each distributor,

wholesaler, bonded agent, and export warehouse shall keep records

at each place of business of all tobacco products purchased or

received. Each retailer shall keep records at a single location,

which the retailer shall designate as its principal place of

business in the state, of all tobacco products purchased and

received. These records must include the following, except that

Subdivision (7) applies to distributors only and Subdivision (8)

applies only to the purchase or receipt of tobacco products other

than cigars:

(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 tobacco

product shipment;

(4) the date and the name of the place of arrival of the tobacco

product shipment;

(5) a statement of the number, kind, and price paid for the

tobacco products;

(6) the name, address, permit number, and tax identification

number of the seller;

(7) the manufacturer's list price for the tobacco products;

(8) the net weight as listed by the manufacturer for each unit;

and

(9) any other information required by rules of the comptroller.

Acts 1981, 67th Leg., p. 1674, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1985, 69th Leg., ch. 58, Sec. 35, eff.

March 1, 1986; Acts 1991, 72nd Leg., ch. 409, Sec. 51, eff. June

7, 1991; Acts 1995, 74th Leg., ch. 1000, Sec. 51, eff. Oct. 1,

1995; Acts 1997, 75th Leg., ch. 1040, Sec. 47, eff. Sept. 1,

1997; Acts 1997, 75th Leg., ch. 1423, Sec. 19.87, eff. Sept. 1,

1997.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

285, Sec. 11, eff. September 1, 2009.

Sec. 155.102. REPORT OF SALE OR USE. (a) Each distributor and

wholesaler shall keep at each place of business in this state

records of each sale, distribution, exchange, or use of tobacco

products whether taxed under this chapter or not. Each

distributor and wholesaler shall prepare and retain an original

invoice for each transaction involving tobacco products. Each

distributor or wholesaler shall keep any supporting

documentation, including bills of lading, showing shipment and

receipt used in preparing the invoices at the place of business

of the distributor or wholesaler. The distributor or wholesaler

shall prepare and deliver a duplicate invoice to the purchaser.

(b) The records for each sale, distribution, exchange, or use of

tobacco products must show:

(1) the purchaser's name and address, permit number, or tax

identification number;

(2) the method of delivery and the name of the common carrier or

other person delivering the tobacco products;

(3) the date, amount, and type of tobacco products sold,

distributed, exchanged, or used;

(4) the price received for the tobacco products;

(5) the number and kind of tobacco products on which the tax has

been paid; and

(6) for sales from a manufacturer to a distributor, the

manufacturer's list price for the tobacco products.

(c) In addition to the information required under Subsection

(b), the records for each sale, distribution, exchange, or use of

tobacco products other than cigars must show the net weight as

listed by the manufacturer for each unit.

Acts 1981, 67th Leg., p. 1674, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1991, 72nd Leg., ch. 409, Sec. 51, eff.

June 7, 1991; Acts 1997, 75th Leg., ch. 1040, Sec. 48, eff. Sept.

1, 1997.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

285, Sec. 12, eff. September 1, 2009.

Sec. 155.103. MANUFACTURER'S RECORDS AND REPORTS. (a) A

manufacturer who sells tobacco products to a permit holder in

this state shall keep records showing:

(1) the number and kind of tobacco products sold;

(2) the date the tobacco products were sold;

(3) the name and permit number of the permit holder;

(4) the manufacturer's list price for the tobacco products;

(5) the place where the tobacco products were shipped; and

(6) the name of the common carrier.

(a-1) In addition to the information required under Subsection

(a), the records for each sale of tobacco products other than

cigars must show the net weight as listed by the manufacturer for

each unit.

(b) A manufacturer who sells tobacco products to a permit holder

in this state shall file with the comptroller, on or before the

last day of each month, a report showing the information required

to be listed by Subsections (a) and (a-1), if applicable, for the

previous month.

Acts 1981, 67th Leg., p. 1675, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1991, 72nd Leg., ch. 409, Sec. 51, eff.

June 7, 1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.88, eff.

Sept. 1, 1997; Acts 1999, 76th Leg., ch. 1467, Sec. 2.44, eff.

Oct. 1, 1999.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

285, Sec. 13, eff. September 1, 2009.

Sec. 155.104. MANUFACTURER'S REPRESENTATIVE'S RECORDS. A

manufacturer's representative shall keep the same records that

are required of a wholesaler. The manufacturer's representative

shall deliver a duplicate of the invoice required by Section

155.102 to the purchaser or recipient of the tobacco products.

Acts 1981, 67th Leg., p. 1675, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1991, 72nd Leg., ch. 409, Sec. 51, eff.

June 7, 1991.

Sec. 155.105. REPORTS BY WHOLESALERS AND DISTRIBUTORS OF CIGARS

AND TOBACCO PRODUCTS. (a) The comptroller may, when considered

necessary by the comptroller for the administration of a tax

under this chapter, require each wholesaler or distributor of

cigars and tobacco products to file with the comptroller a report

each month of sales to retailers in this state.

(b) The wholesaler or distributor shall file the report on or

before the 25th day of each month. The report must contain the

following information for the preceding calendar month's sales in

relation to each retailer:

(1) the name of the retailer and the address of the retailer's

outlet location to which the wholesaler or distributor delivered

cigars or tobacco products, including the city and zip code;

(2) the taxpayer number assigned by the comptroller to the

retailer, if the wholesaler or distributor is in possession of

the number;

(3) the tobacco permit number of the outlet location to which

the wholesaler or distributor delivered cigars or tobacco

products; and

(4) the monthly net sales made to the retailer by the wholesaler

or distributor, including:

(A) the quantity and units of cigars and tobacco products sold

to the retailer; and

(B) for each unit of tobacco products other than cigars, the net

weight as listed by the manufacturer.

(c) Except as provided by this subsection, the wholesaler or

distributor shall file the report with the comptroller

electronically. The comptroller may establish procedures for

allowing an alternative method of filing for a wholesaler or

distributor who demonstrates to the comptroller an inability to

comply with the electronic reporting requirement. If the

comptroller determines that another technological method of

filing the report is more efficient than electronic filing, the

comptroller may establish procedures requiring its use by

wholesalers and distributors.

(d) Except as provided by Section 111.006, information contained

in a report required to be filed by this section is confidential

and not subject to disclosure under Chapter 552, Government Code.

Added by Acts 2007, 80th Leg., R.S., Ch.

129, Sec. 3, eff. September 1, 2007.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

285, Sec. 14, eff. September 1, 2009.

Sec. 155.107. COMMON CARRIER RECORDS. (a) Each common carrier

shall keep records of tobacco products transported in this state.

(b) The comptroller and the attorney general are entitled to

access during regular business hours to all records pertaining to

tobacco products that are transported.

(c) The records must show for each transaction:

(1) the names and addresses of the consignor and consignee;

(2) the date of delivery; and

(3) the amount and type of tobacco products transported or

handled.

Acts 1981, 67th Leg., p. 1670, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 72, eff.

Oct. 1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 51, eff. June

7, 1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.89, eff. Sept.

1, 1997.

Sec. 155.108. BONDED AGENT'S RECORDS. (a) Each bonded agent

shall keep, at each place of business in this state, records of

all tobacco products 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 or delivery.

Acts 1981, 67th Leg., p. 1676, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1991, 72nd Leg., ch. 409, Sec. 51, eff.

June 7, 1991.

Sec. 155.110. AVAILABILITY OF RECORDS. (a) Each permit holder

shall keep records available for inspection and copying by the

comptroller and the attorney general for four years.

(b) If a permit holder's place of business is a vehicle or

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.

(c) Each permit holder who is required to keep records under

this chapter shall provide the comptroller with copies of the

records on demand.

Acts 1981, 67th Leg., p. 1676, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1985, 69th Leg., ch. 58, Sec. 38, eff.

March 1, 1986; Acts 1989, 71st Leg., ch. 240, Sec. 73, eff. Oct.

1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 51, eff. June 7,

1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.90, eff. Sept. 1,

1997; Acts 2001, 77th Leg., ch. 540, Sec. 6, eff. Sept. 1, 2001.

Sec. 155.111. DISTRIBUTOR'S REPORT. (a) A distributor shall

file with the comptroller on or before the last day of each

month, a report for the preceding month.

(b) The report must show:

(1) the date the report was made;

(2) the distributor's name and address;

(3) the month the report covers;

(4) the amount of tobacco products purchased, received, and

acquired;

(5) the manufacturer's list price of tobacco products purchased,

received, and acquired;

(6) the amount of tobacco products sold, distributed, used,

lost, or otherwise disposed of;

(7) the amount of tobacco products on hand at the beginning and

the end of the month; and

(8) any other information the comptroller requires relating to

tobacco products and to the payment of taxes due on them.

(b-1) In addition to the information required under Subsection

(b), the report must show the net weight as listed by the

manufacturer for each unit of tobacco products other than cigars

that is purchased, received, or acquired.

(c) The comptroller shall prescribe the form and content of the

report.

(d) If more than 50 percent of all untaxed tobacco products

received by the distributor in this state are actually sold

outside of this state, the distributor shall include in the

report only tobacco products that are sold in this state.

Acts 1981, 67th Leg., p. 1677, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 74, eff.

Oct. 1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 51, eff. June

7, 1991; Acts 1997, 75th Leg., ch. 1040, Sec. 49, eff. Sept. 1,

1997; Acts 1997, 75th Leg., ch. 1423, Sec. 19.91, eff. Sept. 1,

1997; Acts 1999, 76th Leg., ch. 1467, Sec. 2.45, eff. Oct. 1,

1999; Acts 2001, 77th Leg., ch. 1263, Sec. 54, eff. Oct. 1, 2001.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

285, Sec. 15, eff. September 1, 2009.

Sec. 155.112. FAILURE TO PRODUCE RECORDS. (a) A person's

failure to produce the records required by this subchapter or a

person's inability to provide other proof of tax payment, on

demand by the comptroller, is prima facie evidence that tobacco

products possessed by the person were received for the purpose of

making a first sale without payment of the tax imposed by this

chapter.

(b) This section does not apply to a person who possesses

tobacco products on which a tax of less than $50 is due, as

provided by Section 155.022.

(c) This section does not apply to a failure to produce records

or provide other proof of tax payment under Subsection (a) if the

failure results from an occurrence beyond the person's control.

Added by Acts 1991, 72nd Leg., ch. 409, Sec. 52, eff. June 7,

1991. Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 19.92, eff.

Sept. 1, 1997.

SUBCHAPTER E. ENFORCEMENT OF TAX

Sec. 155.141. DONATIONS. The comptroller may accept gifts,

grants, and donations for the administration and enforcement of

this chapter.

Added by Acts 1989, 71st Leg., ch. 240, Sec. 75, eff. Oct. 1,

1989. Amended by Acts 1997, 75th Leg., ch. 1040, Sec. 50, Sept.

1, 1997; Acts 1997, 75th Leg., ch. 1423, Sec. 19.93, eff. Sept.

1, 1997.

Sec. 155.143. SEIZURE. (a) The comptroller with or without

process may seize:

(1) tobacco products taxed under this chapter that are possessed

or controlled by a person for the purpose of selling or removing

the tobacco products in violation of this chapter;

(2) tobacco products that are removed, deposited, or concealed

by a person intending to avoid payment of taxes imposed by this

chapter;

(3) an automobile, truck, boat, conveyance, or other type of

vehicle used to remove or transport tobacco products by a person

intending to avoid payment of taxes imposed by this chapter; and

(4) equipment, paraphernalia, or other tangible personal

property used by a person intending to avoid payment of taxes

imposed by this chapter found in the place where the tobacco

products are found.

(b) An item seized under this section is forfeited to the state

and remains in the custody of the comptroller for disposition as

provided by this chapter. The seized item is not subject to

replevin.

Acts 1981, 67th Leg., p. 1678, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 76, eff.

Oct. 1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 53, eff. June

7, 1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.94, eff. Sept.

1, 1997.

Sec. 155.144. COMPTROLLER'S REPORT. (a) If the comptroller

seizes property under Section 155.143, the comptroller shall

immediately make a written report showing:

(1) the name of the person making the seizure;

(2) the place where the property was seized;

(3) the person from whom the property was seized; and

(4) an inventory of the property seized.

(b) The comptroller shall prepare the report in duplicate. The

person who seized the property shall sign the report. The

comptroller shall give the original to the person from whom the

property was seized and shall file a duplicate copy open for

public inspection in the comptroller's office.

Acts 1981, 67th Leg., p. 1678, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 77, eff.

Oct. 1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 54, eff. June

7, 1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.95, eff. Sept.

1, 1997.

Sec. 155.1445. SALE OF SEIZED TOBACCO PRODUCTS. (a) Tobacco

products are perishable items.

(b) If the seized tobacco products are in a salable condition,

the comptroller may sell the tobacco products, return the tobacco

products to the manufacturer for credit, or destroy or dispose of

the tobacco products.

(c) The price obtained at the sale is the market value for the

tobacco products sold.

(d) The comptroller shall place the proceeds from the sale of

seized tobacco products in escrow in a treasury suspense account,

pending the outcome of the forfeiture proceeding provided for in

this chapter.

(e) If a determination is made that the comptroller wrongfully

seized the tobacco products, the person entitled to the tobacco

products at the time of seizure may recover the money held in

escrow in the treasury suspense account.

Added by Acts 1991, 72nd Leg., ch. 409, Sec. 55, eff. June 7,

1991. Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 19.96, eff.

Sept. 1, 1997.

Sec. 155.145. FORFEITURE PROCEEDING. (a) The owner of property

seized under this chapter is entitled to written notice of the

seizure.

(b) The comptroller shall give the notice by certified mail,

return receipt requested, not later than the 15th day after the

date of seizure and shall include with the notice an inventory of

the property seized and a statement that the owner of property

seized is entitled to a hearing on the seizure. Service by mail

is complete when the notice is received, as evidenced by return

receipt from the U.S. Postal Service.

(c) After providing the notice and a hearing, if a hearing is

requested under Subsection (b), the comptroller may order the

forfeiture to the state of any property seized under this chapter

or the proceeds of the sale of any tobacco products seized under

this chapter if the comptroller finds that the property was used,

controlled, possessed, or concealed for the purpose of violating

any provision of this chapter.

(d) The comptroller shall hold property or proceeds forfeited

under this section in escrow until the comptroller's

determination is final and the period for filing a petition for

judicial review has expired.

Acts 1981, 67th Leg., p. 1679, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 78, eff.

Oct. 1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 56, eff. June

7, 1991; Acts 1997, 75th Leg., ch. 1040, Sec. 51, eff. Sept. 1,

1997; Acts 1997, 75th Leg., ch. 1423, Sec. 19.97, eff. Sept. 1,

1997.

Sec. 155.1451. DISPOSITION OF FORFEITED PROPERTY. (a) The

comptroller may sell property forfeited to the state at public or

private sale in any commercially reasonable manner.

(b) Subject to the provisions of Section 155.153, the

comptroller shall deposit the sale proceeds, less expenses of

seizure, court costs, and any investigation and audit costs, in

the state treasury.

(c) The comptroller shall use the sale proceeds to operate and

administer the tobacco products tax program up to the amount

appropriated by the legislature for this purpose. The comptroller

shall allocate any sale proceeds that exceed the legislative

appropriation as provided by Subchapter H. Any unused

appropriations remain in the general revenue fund.

Added by Acts 1991, 72nd Leg., ch. 409, Sec. 57, eff. June 7,

1991. Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 19.98, eff.

Sept. 1, 1997.

Sec. 155.150. SEIZURE OR SALE NO DEFENSE. The seizure,

forfeiture, and sale of tobacco products or property under this

chapter, with or without court action, is not a defense to

criminal prosecution for an offense or from liability for a

penalty under this chapter.

Acts 1981, 67th Leg., p. 1680, ch. 389, Sec. 1, eff. Jan. 1,

1982.

Sec. 155.151. WAIVER PERMITTED. (a) The comptroller may waive

a forfeiture proceeding for property seized under Section 155.143

of this code if the owner or possessor of the property:

(1) pays the tax due; and

(2) pays to the state through the comptroller an additional sum

equal to the tax due.

(b) The comptroller may make a compromise with a person before

or after a claim is filed in court. The comptroller shall keep a

record open for public inspection of compromises and waivers of

forfeiture made under this section.

Acts 1981, 67th Leg., p. 1680, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 81, eff.

Oct. 1, 1989; Acts 1997, 75th Leg., ch. 1423, Sec. 19.99, eff.

Sept. 1, 1997.

Sec. 155.152. PAYMENT TO TREASURY. The comptroller shall

deposit all taxes collected under this chapter, after payment of

costs, in the treasury to be allocated as provided by Subchapter

H.

Acts 1981, 67th Leg., p. 1680, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 82, eff.

Oct. 1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 58, eff. June

7, 1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.100, eff. Sept.

1, 1997.

Sec. 155.153. PREFERRED STATE TAX LIEN. (a) All taxes, fines,

interest, penalties, and costs due under this chapter are secured

by a preferred lien in favor of the state, first and prior to all

other existing or future liens, contractual or statutory, legal

or equitable, regardless of the time the lien originated, on any

property seized and forfeited under this chapter.

(b) A lienholder who establishes an interest in the property is

entitled to recover any proceeds remaining after payment of all

taxes, interest, penalties, and costs due to the state.

Added by Acts 1991, 72nd Leg., ch. 409, Sec. 59, eff. June 7,

1991.

Sec. 155.154. DONATIONS. The comptroller may accept gifts,

grants, and donations for the administration and enforcement of

this chapter.

Added by Acts 1991, 72nd Leg., ch. 409, Sec. 59, eff. June 7,

1991. Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 19.101,

eff. Sept. 1, 1997.

Sec. 155.155. RECIPROCAL AGREEMENTS. (a) The comptroller may

enter into a reciprocal agreement with a tax official of another

state or an official of the United States allowing the exchange

of information received by, recorded by, prepared by, furnished

to, or collected by the comptroller with respect to the

investigation and enforcement of this chapter for any tax,

penalty, interest, fine, forfeiture, or offense.

(b) This section does not permit the exchange of information

made confidential by this chapter.

Added by Acts 1991, 72nd Leg., ch. 409, Sec. 59, eff. June 7,

1991. Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 19.102,

eff. Sept. 1, 1997.

SUBCHAPTER F. ADMINISTRATION BY COMPTROLLER

Sec. 155.181. COMPLIANCE INVESTIGATION AND RECOVERY OF COSTS.

(a) If the comptroller has reason to believe that a person has

failed to pay a tax or penalty in the proper manner when due or

otherwise failed to comply with this chapter, the comptroller may

employ auditors and investigators to determine compliance and any

amount due. If the comptroller determines that the person has not

paid the tax or penalty or has failed to comply with this

chapter, the comptroller may require the person to pay the

reasonable expenses incurred in the compliance investigation and

audit as an additional penalty.

(b) The comptroller shall deposit funds paid under this section

to the credit of the general revenue fund in the treasury to be

used for making audits, conducting investigations, or as

otherwise appropriated. The comptroller may use other funds

available for audits as appropriated by the legislature.

Acts 1981, 67th Leg., p. 1681, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 83, eff.

Oct. 1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 61, eff. June

7, 1991; Acts 1995, 74th Leg., ch. 1000, Sec. 52, eff. Oct. 1,

1995; Acts 1997, 75th Leg., ch. 1423, Sec. 19.104, eff. Sept. 1,

1997.

Sec. 155.182. PAYMENT OF DOUBLE AMOUNT. (a) If the comptroller

finds that a person has sold tobacco products without the tax

having been paid, the comptroller may require the person to pay

the state through the comptroller a sum equal to twice the amount

of tax due.

(b) If a person does not furnish the comptroller with any

evidence showing payment of the tax on tobacco products purchased

by the person, it is presumed that the tobacco products were sold

without reporting and paying the tax.

Acts 1981, 67th Leg., p. 1681, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 84, eff.

Oct. 1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 62, eff. June

7, 1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.105, eff. Sept.

1, 1997.

Sec. 155.183. INSPECTION. (a) To determine the tax liability

of a person dealing in tobacco products or compliance by the

person with this chapter, the comptroller may:

(1) inspect any premises, including a vending machine and its

contents, where tobacco products are manufactured, produced,

stored, transported, sold, or offered for sale or exchange;

(2) remain on the premises as long as necessary to determine the

tax liability or compliance with this chapter;

(3) examine the records required by this chapter or other

records, books, documents, papers, accounts, and objects that the

comptroller determines are necessary for conducting a complete

examination; and

(4) examine stocks of tobacco products.

(b) A person dealing in tobacco products may not:

(1) fail to produce, on the comptroller's demand, records

required by this chapter; or

(2) hinder or prevent the inspection of records or the

examination of the premises.

Acts 1981, 67th Leg., p. 1681, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 85, eff.

Oct. 1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 63, eff. June

7, 1991; Acts 1995, 74th Leg., ch. 1000, Sec. 53, eff. Oct. 1,

1995; Acts 1997, 75th Leg., ch. 1423, Sec. 19.106, eff. Sept. 1,

1997.

Sec. 155.184. CREDIT FOR TAX PAID. (a) The comptroller may

adopt rules providing for a credit or refund for tax paid on

tobacco products if the tobacco products have become unfit for

use or consumption or unsalable.

(b) The comptroller may not allow a credit or refund under this

section unless the comptroller is satisfied that the tobacco

products are unfit for use or consumption or unsalable or have

been returned to the manufacturer.

Acts 1981, 67th Leg., p. 1682, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 86, eff.

Oct. 1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 63, eff. June

7, 1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.107, eff. Sept.

1, 1997.

Sec. 155.185. DEFICIENCY DETERMINATION, PENALTIES, AND INTEREST.

(a) If the comptroller has reasonable cause to believe that a

tax report or the amount of tax is inaccurate, the comptroller

may compute and determine the amount of tax, penalty, and

interest to be paid from information contained in the report or

from any other information available to the comptroller.

(b) On making a deficiency determination, the comptroller shall

notify the person by personal service or by mail. Service by mail

is complete when the notice is deposited with the U.S. Postal

Service.

Added by Acts 1991, 72nd Leg., ch. 409, Sec. 64, eff. June 7,

1991. Amended by Acts 1995, 74th Leg., ch. 1000, Sec. 54, eff.

Oct. 1, 1995; Acts 1997, 75th Leg., ch. 1423, Sec. 19.108, eff.

Sept. 1, 1997; Acts 1999, 76th Leg., ch. 1467, Sec. 2.46, eff.

Oct.


State Codes and Statutes

State Codes and Statutes

Statutes > Texas > Tax-code > Title-2-state-taxation > Chapter-155-cigars-and-tobacco-products-tax

TAX CODE

TITLE 2. STATE TAXATION

SUBTITLE E. SALES, EXCISE, AND USE TAXES

CHAPTER 155. CIGARS AND TOBACCO PRODUCTS TAX

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 155.001. DEFINITIONS. In this chapter:

(1) "Bonded agent" means a person in this state who is an agent

of a person outside this state and receives cigars and tobacco

products in interstate commerce and stores the cigars and tobacco

products for distribution or delivery to distributors under

orders from the person outside this state.

(2) "Cigar" means a roll of fermented tobacco that is wrapped in

tobacco and the main stream of smoke from which produces an

alkaline reaction to litmus paper.

(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 tobacco products for

personal consumption.

(6) "Distributor" means a person who:

(A) receives tobacco products for the purpose of making a first

sale in this state from a manufacturer outside the state or

within the state or otherwise brings or causes to be brought into

this state tobacco products for sale, use, or consumption;

(B) manufactures or produces tobacco products; or

(C) is an importer or import broker.

(7) "Export warehouse" means a person in this state who receives

tobacco products from manufacturers and stores the tobacco

products for the purpose of making sales to authorized persons

for resale, use, or consumption outside the United States.

(8) "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 tobacco products in

intrastate commerce;

(B) the first use or consumption of tobacco products in this

state; or

(C) the loss of tobacco products in this state whether through

negligence, theft, or other unaccountable loss.

(9) "Importer" or "import broker" means a person who ships,

transports, or imports into this state tobacco products

manufactured or produced outside the United States for the

purpose of making a first sale in this state.

(10) "Manufacturer" means a person who manufactures or produces

tobacco products and sells tobacco products to a distributor.

(11) "Manufacturer's representative" means a person employed by

a manufacturer to sell or distribute the manufacturer's tobacco

products.

(12) "Permit holder" means a bonded agent, distributor,

wholesaler, manufacturer, importer, or retailer required to

obtain a permit under Section 155.041.

(13) "Place of business" means:

(A) a commercial business location where tobacco products are

sold;

(B) a commercial business location where tobacco products are

kept for sale or consumption or otherwise stored; or

(C) a vehicle from which tobacco products are sold.

(14) "Retailer" means a person who engages in the practice of

selling tobacco products to consumers and includes the owner of a

coin-operated vending machine.

(15) "Tobacco product" means:

(A) a cigar;

(B) smoking tobacco, including granulated, plug-cut, crimp-cut,

ready-rubbed, and any form of tobacco suitable for smoking in a

pipe or as a cigarette;

(C) chewing tobacco, including Cavendish, Twist, plug, scrap,

and any kind of tobacco suitable for chewing;

(D) snuff or other preparations of pulverized tobacco; or

(E) an article or product that is made of tobacco or a tobacco

substitute and that is not a cigarette.

(16) "Wholesaler" means a person, including a manufacturer's

representative, who sells or distributes tobacco products in this

state for resale but who is not a distributor.

Acts 1981, 67th Leg., p. 1666, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 2,

Sec. 7, eff. Oct. 2, 1984; Acts 1985, 69th Leg., ch. 58, Sec. 21,

eff. March 1, 1986; Acts 1991, 72nd Leg., ch. 409, Sec. 45, eff.

June 7, 1991; Acts 1995, 74th Leg., ch. 705, Sec. 11, eff. Sept.

1, 1995; Acts 1997, 75th Leg., ch. 165, Sec. 30.263, eff. Sept.

1, 1997; Acts 1997, 75th Leg., ch. 1040, Sec. 46, eff. Sept. 1,

1997; Acts 2001, 77th Leg., ch. 540, Sec. 4, eff. Sept. 1, 2001;

Acts 2001, 77th Leg., ch. 1263, Sec. 51, eff. Oct. 1, 2001.

Sec. 155.002. STORAGE. (a) The commercial business location

where tobacco products 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.

Added by Acts 2001, 77th Leg., ch. 540, Sec. 5, eff. Sept. 1,

2001. Amended by Acts 2003, 78th Leg., ch. 209, Sec. 27, eff.

Oct. 1, 2003.

SUBCHAPTER B. IMPOSITION AND RATE OF TAX

Sec. 155.021. TAX IMPOSED ON CIGARS. (a) A tax is imposed and

becomes due and payable when a permit holder receives cigars for

the purpose of making a first sale in this state.

(b) The tax rates are:

(1) one cent per 10 or fraction of 10 on cigars weighing three

pounds or less per thousand;

(2) $7.50 per thousand on cigars that:

(A) weigh more than three pounds per thousand; and

(B) sell at factory list price, exclusive of any trade discount,

special discount, or deal, for 3.3 cents or less each;

(3) $11 per thousand on cigars that:

(A) weigh more than three pounds per thousand;

(B) sell at factory list price, exclusive of any trade discount,

special discount, or deal, for more than 3.3 cents each; and

(C) contain no substantial amount of nontobacco ingredients; and

(4) $15 per thousand on cigars that:

(A) weigh more than three pounds per thousand;

(B) sell at factory list price, exclusive of any trade discount,

special discount, or deal, for more than 3.3 cents each; and

(C) contain a substantial amount of nontobacco ingredients.

(c) Cigars taxed under Subsections (b)(3) and (b)(4) of this

section are presumed to contain a substantial amount of

nontobacco ingredients unless the report on the cigars required

by Section 155.111 of this code is accompanied by an affidavit

stating that specific cigars described in the report do not

contain sheet wrapper, sheet binder, or sheet filler. If the

manufacturer prepares the report, the manufacturer shall make the

affidavit. If the distributor prepares the report, the

manufacturer and the distributor shall make the affidavit.

Acts 1981, 67th Leg., p. 1667, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 2,

Sec. 5, eff. Oct. 2, 1984; Acts 1991, 72nd Leg., ch. 409, Sec.

46, eff. June 7, 1991.

Sec. 155.0211. TAX IMPOSED ON TOBACCO PRODUCTS OTHER THAN

CIGARS. (a) A tax is imposed and becomes due and payable when a

permit holder receives tobacco products other than cigars, for

the purpose of making a first sale in this state.

(b) Except as provided by Subsection (c), the tax rate for each

can or package of a tobacco product other than cigars is $1.22

per ounce and a proportionate rate on all fractional parts of an

ounce.

(b-1) Notwithstanding Subsection (b) and except as provided by

Subsection (c), for the state fiscal year beginning September 1,

2012, the tax rate for each can or package of a tobacco product

other than cigars is $1.19 per ounce and a proportionate rate on

all fractional parts of an ounce. This subsection expires

December 1, 2013.

(b-2) Notwithstanding Subsection (b) and except as provided by

Subsection (c), for the state fiscal year beginning September 1,

2011, the tax rate for each can or package of a tobacco product

other than cigars is $1.16 per ounce and a proportionate rate on

all fractional parts of an ounce. This subsection expires

December 1, 2012.

(b-3) Notwithstanding Subsection (b) and except as provided by

Subsection (c), for the state fiscal year beginning September 1,

2010, the tax rate for each can or package of a tobacco product

other than cigars is $1.13 per ounce and a proportionate rate on

all fractional parts of an ounce. This subsection expires

December 1, 2011.

(b-4) Notwithstanding Subsection (b) and except as provided by

Subsection (c), for the state fiscal year beginning September 1,

2009, the tax rate for each can or package of a tobacco product

other than cigars is $1.10 per ounce and a proportionate rate on

all fractional parts of an ounce. This subsection expires

December 1, 2010.

(c) The tax imposed on a can or package of a tobacco product

other than cigars that weighs less than 1.2 ounces is equal to

the amount of the tax imposed on a can or package of a tobacco

product that weighs 1.2 ounces.

(d) The computation of the tax under this section and the

applicability of Subsection (c) shall be based on the net weight

as listed by the manufacturer. The total tax to be imposed on a

unit that contains multiple individual cans or packages is the

sum of the taxes imposed by this section on each individual can

or package intended for sale or distribution at retail.

(e) A change in the tax rate in effect for a state fiscal year

that occurs in accordance with this section does not affect taxes

imposed before that fiscal year, and the rate in effect when

those taxes were imposed continues in effect for purposes of the

liability for and collection of those taxes.

Added by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 2, Sec. 6,

eff. Oct. 2, 1984. Amended by Acts 1987, 70th Leg., 2nd C.S., ch.

5, art. 4, Sec. 2; Acts 1990, 71st Leg., 6th C.S., ch. 5, Sec.

2.02, eff. July 1, 1990; Acts 1991, 72nd Leg., ch. 409, Sec. 47,

eff. June 7, 1991.

Amended by:

Acts 2006, 79th Leg., 3rd C.S., Ch.

7, Sec. 2, eff. January 1, 2007.

Acts 2009, 81st Leg., R.S., Ch.

285, Sec. 10, eff. September 1, 2009.

Sec. 155.022. FIRST SALE OF TOBACCO PRODUCTS. A person who

receives or possesses tobacco products on which a tax of more

than $50 would be due if the receipt or possession were for the

purpose of making a first sale in this state is presumed to

receive or possess the tobacco products for the purpose of making

a first sale in this state. This presumption does not apply to

common carriers or to manufacturers. A tax is imposed on

manufacturers who manufacture tobacco products in this state at

the time the tobacco products are first transferred in connection

with a purchase, sale, or any exchange for value in intrastate

commerce. The distribution or delivery of tobacco products by a

bonded agent to a permitted distributor in this state, under

instructions received from outside this state, is not a first

sale.

Acts 1981, 67th Leg., p. 1668, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1991, 72nd Leg., ch. 409, Sec. 47, eff.

June 7, 1991.

Sec. 155.023. PAYMENT OF TAX. (a) A distributor shall pay the

tax on tobacco products received for the purpose of making a

first sale at the time the distributor files the report required

by Section 155.111. A distributor shall pay the tax by cashier's

check payable to the comptroller, by electronic funds transfer to

the comptroller or by any other method of payment authorized by

the comptroller.

(b) The person in possession of tobacco products has the burden

to prove payment of the tax on the products.

Acts 1981, 67th Leg., p. 1668, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1991, 72nd Leg., ch. 409, Sec. 47, eff.

June 7, 1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.77, eff.

Sept. 1, 1997.

Sec. 155.024. EXCEPTION FOR PERSONAL USE. A person who

personally transports cigars or tobacco products in quantities or

amounts that would ordinarily retail at 25 cents or less is not

required to pay the tax imposed by this chapter if the person

uses the cigars or tobacco products and does not sell them or

offer them for sale.

Acts 1981, 67th Leg., p. 1662, ch. 389, Sec. 1, eff. Jan. 1,

1982.

Sec. 155.026. PENALTY FOR FAILURE TO PAY TAX. (a) A

distributor who fails to timely pay the tax when due shall pay

five percent of the amount of tax then due as a penalty, and if

the distributor fails to pay the tax on or before the 30th day

after the day on which the tax is due, the distributor shall pay

an additional five percent.

(b) The minimum penalty imposed by this section is $50.

(c) The dishonor of a check delivered to the treasury for

payment of taxes constitutes a failure to pay the tax when due.

Acts 1981, 67th Leg., p. 1669, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1983, 68th Leg., p. 451, ch. 93, Sec. 3,

eff. Sept. 1, 1983; Acts 1991, 72nd Leg., ch. 409, Sec. 47, eff.

June 7, 1991.

Sec. 155.027. VENUE. Venue of a suit for collection of a

penalty for late payment of taxes is in Travis County.

Acts 1981, 67th Leg., p. 1669, ch. 389, Sec. 1, eff. Jan. 1,

1982.

SUBCHAPTER C. PERMITS

Sec. 155.041. PERMITS. (a) A person may not engage in business

as a distributor, wholesaler, bonded agent, manufacturer,

importer, or retailer unless the person has applied for and

received the applicable permit from the comptroller.

(b) Each distributor, wholesaler, bonded agent, manufacturer,

importer, or retailer shall obtain a permit for each place of

business owned or operated by the distributor, wholesaler, bonded

agent, manufacturer, importer, or retailer.

(c) The comptroller shall prescribe the form and content of an

application for a permit and shall furnish the form on request of

an applicant.

(d) The applicant shall accurately complete all information

required by the application and provide the comptroller with

additional information the comptroller considers necessary.

(e) The comptroller may require each corporation, association,

joint venture, syndicate, partnership, or proprietorship to

furnish financial information regarding the applicant and to

provide the identity of each officer, director, stockholder

owning 10 percent or more of the outstanding stock, partner,

member, owner, or managing employee.

(f) Each distributor, wholesaler, and retailer that applies for

a permit to sell tobacco products from a vehicle must provide the

make, model, vehicle identification number, registration number,

and any other information required by the comptroller.

(g) All financial information provided under this section is

confidential and not subject to Chapter 552, Government Code.

(h) Permits for engaging in business as a distributor,

wholesaler, bonded agent, manufacturer, importer, or retailer

shall be governed exclusively by the provisions of this code.

Acts 1981, 67th Leg., p. 1669, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1985, 69th Leg., ch. 58, Sec. 23, eff.

March 1, 1986; Acts 1989, 71st Leg., ch. 240, Sec. 54, eff. Oct.

1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 48, eff. June 7,

1991; Acts 1995, 74th Leg., ch. 76, Sec. 5.95(88), eff. Sept. 1,

1995; Acts 1995, 74th Leg., ch. 1000, Sec. 47, eff. Oct. 1, 1995;

Acts 1997, 75th Leg., ch. 1423, Sec. 19.78, eff. Sept. 1, 1997;

Acts 2001, 77th Leg., ch. 1263, Sec. 52, eff. Oct. 1, 2001.

Sec. 155.0415. SALES: PERMIT HOLDERS AND NONPERMIT HOLDERS. (a)

Except for retail sales to consumers, tobacco products may only

be sold or distributed by and between permit holders.

(b) A person who is not a permit holder may not sell or

distribute tobacco products on which a tax of more than $50 has

been paid or is due.

Added by Acts 1991, 72nd Leg., ch. 409, Sec. 49, eff. June 7,

1991.

Sec. 155.045. COMBINATION PERMIT. The comptroller may issue a

combination permit for cigarettes and tobacco products under

Section 154.102. A person who receives a combination permit is

subject to the provisions of this chapter in the same manner as a

person holding a single permit under this chapter.

Acts 1981, 67th Leg., p. 1670, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1985, 69th Leg., ch. 58, Sec. 24, eff.

March 1, 1986; Acts 1989, 71st Leg., ch. 240, Sec. 58, eff. Oct.

1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 50, eff. June 7,

1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.79, eff. Sept. 1,

1997.

Sec. 155.048. ISSUANCE OF PERMITS. (a) The comptroller shall

issue a permit to a distributor, wholesaler, bonded agent,

manufacturer, importer, or retailer if the comptroller:

(1) has received an application and fee, if required;

(2) does not reject the application and deny the permit under

Section 155.0481; and

(3) determines that issuing the permit will not jeopardize the

administration and enforcement of this chapter.

(b) The permit shall be issued for a designated place of

business, except as provided by Section 155.053.

(c) The permits are nonassignable.

(d) The permit must indicate the type of permit that it is and

authorize the sale of tobacco products in this state. The permit

must show that it is revocable and shall be forfeited or

suspended if the conditions of issuance, provisions of this

chapter, or rules of the comptroller are violated.

Acts 1981, 67th Leg., p. 1670, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1985, 69th Leg., ch. 58, Sec. 26, eff.

March 1, 1986; Acts 1989, 71st Leg., ch. 240, Sec. 61, eff. Oct.

1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 50, eff. June 7,

1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.80, eff. Sept. 1,

1997; Acts 2001, 77th Leg., ch. 1263, Sec. 53, eff. Oct. 1, 2001.

Sec. 155.0481. DENIAL OF PERMIT. The comptroller may reject an

application and deny a permit if the comptroller finds, after

notice and opportunity for hearing, any of the following:

(1) the premises where business will be conducted are not

adequate to protect the tobacco products; or

(2) the applicant or managing employee, or, if the applicant is

a corporation, an officer, director, manager, or any stockholder

who holds directly or through family or partner relationship 10

percent or more of the corporation's stock, or, if the applicant

is a partnership, a partner or manager:

(A) has failed to disclose any information required by Sections

155.041(d), (e), and (f), including prior business experience,

financial condition of the permit holder, present or previous

business affiliations, prior employment, and any conviction of a

felony, or has made a false statement in the application; or

(B) has previously violated provisions of this chapter.

Added by Acts 1991, 72nd Leg., ch. 409, Sec. 50, eff. June 7,

1991. Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 19.81, eff.

Sept. 1, 1997.

Sec. 155.049. LICENSING YEAR; FEES. (a) A permit required by

this chapter expires on the last day of February of each year,

except the retailer's permit required by Section 155.041 expires

on the last day of May of each even-numbered year.

(b) An application for a permit required by this chapter must be

accompanied by a fee of:

(1) $300 for a bonded agent's permit;

(2) $300 for a distributor's permit;

(3) $200 for a wholesaler's permit;

(4) $15 for each permit for a vehicle if the applicant is also

applying for a permit as a bonded agent, distributor, or

wholesaler or has received a current permit from the comptroller

under Sections 155.041 and 155.048; and

(5) $180 for a retailer's permit.

(c) Repealed by Acts 1997, 75th Leg., ch. 671, Sec. 4.06(b),

eff. Sept. 1, 1997.

(d) For a new or renewal permit required by Section 155.041, the

comptroller shall prorate the fee according to the number of

months remaining during the calendar year that the permit is to

be in effect.

(e) A person who does not obtain a permit each year in a timely

manner must pay a late fee of $50 in addition to the application

fee for the permit.

(f) If at the date of issuance a permit will expire within three

months, the comptroller may collect the prorated permit fee or

the fee for a current year and, with the consent of the permit

holder, may collect the fee for the next permit year and issue a

permit or permits for both periods, as applicable.

(g) Expired.

Acts 1981, 67th Leg., p. 1670, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1985, 69th Leg., ch. 58, Sec. 27, eff.

March 1, 1986; Acts 1989, 71st Leg., ch. 240, Sec. 62, eff. Oct.

1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 50, eff. June 7,

1991; Acts 1997, 75th Leg., ch. 671, Sec. 4.06, eff. Sept. 1,

1997; Acts 1997, 75th Leg., ch. 1423, Sec. 19.82, eff. Sept. 1,

1997.

Sec. 155.050. PAYMENT FOR PERMITS. (a) An applicant for a

permit required by Section 155.041 shall send the required fee

with the application.

(b) The payment must be in cash or by money order or check.

(c) A permit may not be issued in exchange for a check until

after the comptroller has received full payment on the check.

Acts 1981, 67th Leg., p. 1671, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 63, eff.

Oct. 1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 50, eff. June

7, 1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.83, eff. Sept.

1, 1997.

Sec. 155.053. DISPLAY OF PERMIT. (a) Each permit holder shall

keep the permit on public display at the place of business for

which the permit was issued.

(b) Each permit holder who has a permit assigned to a vehicle

shall post the permit in a conspicuous place on the vehicle.

(c) Each retailer who operates a vending machine that includes

tobacco products shall place a retailer's permit on the machine.

Acts 1981, 67th Leg., p. 1671, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1985, 69th Leg., ch. 58, Sec. 29, eff.

March 1, 1986; Acts 1991, 72nd Leg., ch. 409, Sec. 50, eff. June

7, 1991.

Sec. 155.058. REVENUE. (a) Except as provided by Subsection

(b), revenue from the sale of permits to distributors,

wholesalers, and bonded agents is allocated in the same manner

that other revenue is allocated by Subchapter H.

(b) Revenue from the sale of retailer's permits shall be

deposited to the general revenue fund and may be appropriated

only as provided by this section. The money may be appropriated

first to the comptroller for administration of licensing of

retailers under this chapter or Chapter 154.

(c) If, after any appropriation is made under Subsection (b),

revenue remains from the sale of retailer's permits, the

remaining money may be appropriated to the comptroller for

administration and enforcement of Subchapters H, K, and N,

Chapter 161, Health and Safety Code, and to the Texas Department

of Health, for the administration and enforcement of Section

161.253, Health and Safety Code.

(d) If, after any appropriation is made under Subsections (b)

and (c), revenue remains from the sale of retailer's permits, the

remaining money may be appropriated to the Texas Department of

Health to administer the commissioner of public health's

responsibilities under Section 161.301, Health and Safety Code.

(e) If, after any appropriation is made under Subsections (b),

(c), and (d), revenue remains from the sale of retailer's

permits, the remaining money may be appropriated to the

appropriate entity to administer that entity's responsibilities

under Section 161.302, Health and Safety Code.

Acts 1981, 67th Leg., p. 1672, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1985, 69th Leg., ch. 58, Sec. 33, eff.

March 1, 1986; Acts 1991, 72nd Leg., ch. 409, Sec. 50, eff. June

7, 1991; Acts 1997, 75th Leg., ch. 671, Sec. 4.07, eff. Sept. 1,

1997.

Sec. 155.059. FINAL SUSPENSION OR REVOCATION OF PERMIT. (a)

The comptroller may revoke or suspend a person's permit if the

comptroller finds, after notice and hearing as provided by this

section, that the permit holder violated this chapter or an

administrative rule made under this chapter.

(b) If the comptroller intends to suspend or revoke a permit,

the comptroller shall provide the permit holder with written

notice that includes a statement:

(1) of the reason for the intended revocation or suspension;

(2) that the permit holder is entitled to a hearing by the

comptroller on the proposed suspension or revocation; and

(3) of the date, time, and place of the hearing.

(c) The comptroller shall deliver the written notice by personal

service or by mail to the permit holder's mailing address as it

appears in the comptroller's records. Service by mail is complete

when the notice is deposited with the United States Postal

Service.

(d) The comptroller shall give the permit holder not less than

10 days' notice of a final hearing.

(e) A permit holder may appeal the decision of the comptroller

to a district court in Travis County not later than the 30th day

after the date the comptroller's decision becomes final.

(f) A person whose permit is suspended or revoked may not sell,

offer for sale, or distribute tobacco products from the place of

business to which the permit applied until a new permit is

granted or the suspension is removed.

(g) If the comptroller suspends or revokes a permit, the

comptroller shall provide written notice of the suspension or

revocation, within a reasonable time, to each permit holder in

the state. A permit holder violates Section 155.0415(a) by

selling or distributing tobacco products to a person whose permit

has been suspended or revoked only after the permit holder

receives written notice of the suspension or revocation from the

comptroller.

Acts 1981, 67th Leg., p. 1672, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1985, 69th Leg., ch. 58, Sec. 34, eff.

March 1, 1986; Acts 1989, 71st Leg., ch. 240, Sec. 67, eff. Oct.

1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 50, eff. June 7,

1991; Acts 1995, 74th Leg., ch. 1000, Sec. 48, eff. Oct. 1, 1995;

Acts 1997, 75th Leg., ch. 1423, Sec. 19.84, eff. Sept. 1, 1997;

Acts 1999, 76th Leg., ch. 1467, Sec. 2.43, eff. Oct. 1, 1999.

Sec. 155.0591. SUMMARY SUSPENSION OF A PERMIT. (a) The

comptroller may suspend a person's permit without notice or a

hearing for the person's failure to comply with this chapter or a

rule adopted under this chapter if the person's continued

operation constitutes an immediate and substantial threat to the

collection of taxes imposed by this chapter and attributable to

the person's operation.

(b) If the comptroller summarily suspends a person's permit,

proceedings for a preliminary hearing before the comptroller or

the comptroller's representative must be initiated simultaneously

with the summary suspension. The preliminary hearing shall be set

for a date not later than 10 days after the date of the summary

suspension, unless the parties agree to a later date.

(c) At the preliminary hearing, the permit holder must show

cause why the permit should not remain suspended pending a final

hearing on suspension or revocation.

(d) Chapter 2001, Government Code, does not apply to a summary

suspension under this section.

(e) To initiate a proceeding to suspend summarily a person's

permit, the comptroller shall serve notice on the permit holder

informing the permit holder of the right to a preliminary hearing

before the comptroller or the comptroller's representative and of

the time and place of the preliminary hearing. The notice must be

personally served on the permit holder or an officer, employee,

or agent of the permit holder or sent by certified or registered

mail, return receipt requested, to the permit holder's mailing

address as it appears in the comptroller's records. The notice

must state the alleged violations that constitute the grounds for

summary suspension. The suspension is effective at the time the

notice is served. If notice is served in person, the permit

holder shall immediately surrender the permit to the comptroller.

If notice is served by mail, the permit holder shall immediately

return the permit to the comptroller.

(f) Section 155.059, governing hearings for final suspension or

revocation of a permit under this chapter, governs a final

administrative hearing.

Added by Acts 1995, 74th Leg., ch. 1000, Sec. 49, eff. Oct. 1,

1995. Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 19.85, eff.

Sept. 1, 1997.

Sec. 155.0592. DISCIPLINARY ACTION FOR CERTAIN VIOLATIONS. (a)

A retailer is subject to disciplinary action as provided by this

section if:

(1) an agent or employee of the retailer commits an offense

under Subchapter H, Chapter 161, Health and Safety Code; and

(2) the retailer, 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 as provided by this subchapter, that a permit

holder has violated Subchapter H or K, Chapter 161, Health and

Safety Code, at a place of business for which a permit is issued,

the comptroller may suspend the permit for that place of business

or administratively assess a fine as follows:

(1) if the permit holder has not been found to have violated

Subchapter H or K, Chapter 161, Health and Safety Code, at that

place of business during the preceding 12 months, the comptroller

may require the permit holder to pay a fine in an amount not to

exceed $500;

(2) if the permit holder has been found to have violated

Subchapter H or K, Chapter 161, Health and Safety Code, at that

place of business once during the preceding 12 months, the

comptroller may require the permit holder to pay a fine in an

amount not to exceed $750; and

(3) if the permit holder has been found to have violated

Subchapter H or K, Chapter 161, Health and Safety Code, at that

place of business at least twice during the preceding 12 months,

the comptroller may require the permit holder to pay a fine in an

amount not to exceed $1,000 or suspend the permit for that place

of business for not more than three days.

(c) Except as provided by Section 155.0593, if the permit holder

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 12 months, the

comptroller shall revoke the permit.

(d) A retailer whose permit has been revoked under this section

may not apply for a retailer's permit for the same place of

business before the expiration of six months after the effective

date of the revocation.

Added by Acts 1997, 75th Leg., ch. 671, Sec. 4.08, eff. Sept. 1,

1997. Amended by Acts 1999, 76th Leg., ch. 1157, Sec. 2, eff.

Sept. 1, 1999.

Sec. 155.0593. ACTIONS OF EMPLOYEE. (a) For purposes of

Subchapter H, Chapter 161, Health and Safety Code, and the

provisions of this code relating to the sale or delivery of

cigarettes or tobacco products to a minor, the comptroller may

suspend a permit but may not revoke the permit under Section

155.0592 if the comptroller finds that:

(1) the employer has not violated Section 161.082(b), Health and

Safety Code, more than seven times at the place of business for

which the permit is issued in the 24-month period preceding the

violation in question;

(2) the employer 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 employer 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 permit holder for the purpose of

training its employees without regard to whether the employees

are located at the same place of business. This subsection

applies only to a permit holder who employs at least 100 persons

at any one time during the permit year who sell cigarettes or

tobacco products.

Added by Acts 1997, 75th Leg., ch. 671, Sec. 4.09, eff. Sept. 1,

1997.

Sec. 155.0595. HEARINGS. Unless otherwise provided by this

chapter, the comptroller shall conduct all hearings required by

this chapter in accordance with Chapter 2001, Government Code.

The comptroller may designate one or more representatives to

conduct the hearings and may prescribe the rules of procedure

governing the hearings.

Added by Acts 1991, 72nd Leg., ch. 409, Sec. 50, eff. June 7,

1991. Amended by Acts 1995, 74th Leg., ch. 76, Sec. 5.95(49),

eff. Sept. 1, 1995; Acts 1995, 74th Leg., ch. 1000, Sec. 50, eff.

Oct. 1, 1995; Acts 1997, 75th Leg., ch. 1423, Sec. 19.86, eff.

Sept. 1, 1997.

SUBCHAPTER D. RECORDS AND REPORTS

Sec. 155.101. RECORD OF PURCHASE OR RECEIPT. Each distributor,

wholesaler, bonded agent, and export warehouse shall keep records

at each place of business of all tobacco products purchased or

received. Each retailer shall keep records at a single location,

which the retailer shall designate as its principal place of

business in the state, of all tobacco products purchased and

received. These records must include the following, except that

Subdivision (7) applies to distributors only and Subdivision (8)

applies only to the purchase or receipt of tobacco products other

than cigars:

(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 tobacco

product shipment;

(4) the date and the name of the place of arrival of the tobacco

product shipment;

(5) a statement of the number, kind, and price paid for the

tobacco products;

(6) the name, address, permit number, and tax identification

number of the seller;

(7) the manufacturer's list price for the tobacco products;

(8) the net weight as listed by the manufacturer for each unit;

and

(9) any other information required by rules of the comptroller.

Acts 1981, 67th Leg., p. 1674, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1985, 69th Leg., ch. 58, Sec. 35, eff.

March 1, 1986; Acts 1991, 72nd Leg., ch. 409, Sec. 51, eff. June

7, 1991; Acts 1995, 74th Leg., ch. 1000, Sec. 51, eff. Oct. 1,

1995; Acts 1997, 75th Leg., ch. 1040, Sec. 47, eff. Sept. 1,

1997; Acts 1997, 75th Leg., ch. 1423, Sec. 19.87, eff. Sept. 1,

1997.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

285, Sec. 11, eff. September 1, 2009.

Sec. 155.102. REPORT OF SALE OR USE. (a) Each distributor and

wholesaler shall keep at each place of business in this state

records of each sale, distribution, exchange, or use of tobacco

products whether taxed under this chapter or not. Each

distributor and wholesaler shall prepare and retain an original

invoice for each transaction involving tobacco products. Each

distributor or wholesaler shall keep any supporting

documentation, including bills of lading, showing shipment and

receipt used in preparing the invoices at the place of business

of the distributor or wholesaler. The distributor or wholesaler

shall prepare and deliver a duplicate invoice to the purchaser.

(b) The records for each sale, distribution, exchange, or use of

tobacco products must show:

(1) the purchaser's name and address, permit number, or tax

identification number;

(2) the method of delivery and the name of the common carrier or

other person delivering the tobacco products;

(3) the date, amount, and type of tobacco products sold,

distributed, exchanged, or used;

(4) the price received for the tobacco products;

(5) the number and kind of tobacco products on which the tax has

been paid; and

(6) for sales from a manufacturer to a distributor, the

manufacturer's list price for the tobacco products.

(c) In addition to the information required under Subsection

(b), the records for each sale, distribution, exchange, or use of

tobacco products other than cigars must show the net weight as

listed by the manufacturer for each unit.

Acts 1981, 67th Leg., p. 1674, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1991, 72nd Leg., ch. 409, Sec. 51, eff.

June 7, 1991; Acts 1997, 75th Leg., ch. 1040, Sec. 48, eff. Sept.

1, 1997.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

285, Sec. 12, eff. September 1, 2009.

Sec. 155.103. MANUFACTURER'S RECORDS AND REPORTS. (a) A

manufacturer who sells tobacco products to a permit holder in

this state shall keep records showing:

(1) the number and kind of tobacco products sold;

(2) the date the tobacco products were sold;

(3) the name and permit number of the permit holder;

(4) the manufacturer's list price for the tobacco products;

(5) the place where the tobacco products were shipped; and

(6) the name of the common carrier.

(a-1) In addition to the information required under Subsection

(a), the records for each sale of tobacco products other than

cigars must show the net weight as listed by the manufacturer for

each unit.

(b) A manufacturer who sells tobacco products to a permit holder

in this state shall file with the comptroller, on or before the

last day of each month, a report showing the information required

to be listed by Subsections (a) and (a-1), if applicable, for the

previous month.

Acts 1981, 67th Leg., p. 1675, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1991, 72nd Leg., ch. 409, Sec. 51, eff.

June 7, 1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.88, eff.

Sept. 1, 1997; Acts 1999, 76th Leg., ch. 1467, Sec. 2.44, eff.

Oct. 1, 1999.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

285, Sec. 13, eff. September 1, 2009.

Sec. 155.104. MANUFACTURER'S REPRESENTATIVE'S RECORDS. A

manufacturer's representative shall keep the same records that

are required of a wholesaler. The manufacturer's representative

shall deliver a duplicate of the invoice required by Section

155.102 to the purchaser or recipient of the tobacco products.

Acts 1981, 67th Leg., p. 1675, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1991, 72nd Leg., ch. 409, Sec. 51, eff.

June 7, 1991.

Sec. 155.105. REPORTS BY WHOLESALERS AND DISTRIBUTORS OF CIGARS

AND TOBACCO PRODUCTS. (a) The comptroller may, when considered

necessary by the comptroller for the administration of a tax

under this chapter, require each wholesaler or distributor of

cigars and tobacco products to file with the comptroller a report

each month of sales to retailers in this state.

(b) The wholesaler or distributor shall file the report on or

before the 25th day of each month. The report must contain the

following information for the preceding calendar month's sales in

relation to each retailer:

(1) the name of the retailer and the address of the retailer's

outlet location to which the wholesaler or distributor delivered

cigars or tobacco products, including the city and zip code;

(2) the taxpayer number assigned by the comptroller to the

retailer, if the wholesaler or distributor is in possession of

the number;

(3) the tobacco permit number of the outlet location to which

the wholesaler or distributor delivered cigars or tobacco

products; and

(4) the monthly net sales made to the retailer by the wholesaler

or distributor, including:

(A) the quantity and units of cigars and tobacco products sold

to the retailer; and

(B) for each unit of tobacco products other than cigars, the net

weight as listed by the manufacturer.

(c) Except as provided by this subsection, the wholesaler or

distributor shall file the report with the comptroller

electronically. The comptroller may establish procedures for

allowing an alternative method of filing for a wholesaler or

distributor who demonstrates to the comptroller an inability to

comply with the electronic reporting requirement. If the

comptroller determines that another technological method of

filing the report is more efficient than electronic filing, the

comptroller may establish procedures requiring its use by

wholesalers and distributors.

(d) Except as provided by Section 111.006, information contained

in a report required to be filed by this section is confidential

and not subject to disclosure under Chapter 552, Government Code.

Added by Acts 2007, 80th Leg., R.S., Ch.

129, Sec. 3, eff. September 1, 2007.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

285, Sec. 14, eff. September 1, 2009.

Sec. 155.107. COMMON CARRIER RECORDS. (a) Each common carrier

shall keep records of tobacco products transported in this state.

(b) The comptroller and the attorney general are entitled to

access during regular business hours to all records pertaining to

tobacco products that are transported.

(c) The records must show for each transaction:

(1) the names and addresses of the consignor and consignee;

(2) the date of delivery; and

(3) the amount and type of tobacco products transported or

handled.

Acts 1981, 67th Leg., p. 1670, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 72, eff.

Oct. 1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 51, eff. June

7, 1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.89, eff. Sept.

1, 1997.

Sec. 155.108. BONDED AGENT'S RECORDS. (a) Each bonded agent

shall keep, at each place of business in this state, records of

all tobacco products 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 or delivery.

Acts 1981, 67th Leg., p. 1676, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1991, 72nd Leg., ch. 409, Sec. 51, eff.

June 7, 1991.

Sec. 155.110. AVAILABILITY OF RECORDS. (a) Each permit holder

shall keep records available for inspection and copying by the

comptroller and the attorney general for four years.

(b) If a permit holder's place of business is a vehicle or

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.

(c) Each permit holder who is required to keep records under

this chapter shall provide the comptroller with copies of the

records on demand.

Acts 1981, 67th Leg., p. 1676, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1985, 69th Leg., ch. 58, Sec. 38, eff.

March 1, 1986; Acts 1989, 71st Leg., ch. 240, Sec. 73, eff. Oct.

1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 51, eff. June 7,

1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.90, eff. Sept. 1,

1997; Acts 2001, 77th Leg., ch. 540, Sec. 6, eff. Sept. 1, 2001.

Sec. 155.111. DISTRIBUTOR'S REPORT. (a) A distributor shall

file with the comptroller on or before the last day of each

month, a report for the preceding month.

(b) The report must show:

(1) the date the report was made;

(2) the distributor's name and address;

(3) the month the report covers;

(4) the amount of tobacco products purchased, received, and

acquired;

(5) the manufacturer's list price of tobacco products purchased,

received, and acquired;

(6) the amount of tobacco products sold, distributed, used,

lost, or otherwise disposed of;

(7) the amount of tobacco products on hand at the beginning and

the end of the month; and

(8) any other information the comptroller requires relating to

tobacco products and to the payment of taxes due on them.

(b-1) In addition to the information required under Subsection

(b), the report must show the net weight as listed by the

manufacturer for each unit of tobacco products other than cigars

that is purchased, received, or acquired.

(c) The comptroller shall prescribe the form and content of the

report.

(d) If more than 50 percent of all untaxed tobacco products

received by the distributor in this state are actually sold

outside of this state, the distributor shall include in the

report only tobacco products that are sold in this state.

Acts 1981, 67th Leg., p. 1677, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 74, eff.

Oct. 1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 51, eff. June

7, 1991; Acts 1997, 75th Leg., ch. 1040, Sec. 49, eff. Sept. 1,

1997; Acts 1997, 75th Leg., ch. 1423, Sec. 19.91, eff. Sept. 1,

1997; Acts 1999, 76th Leg., ch. 1467, Sec. 2.45, eff. Oct. 1,

1999; Acts 2001, 77th Leg., ch. 1263, Sec. 54, eff. Oct. 1, 2001.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

285, Sec. 15, eff. September 1, 2009.

Sec. 155.112. FAILURE TO PRODUCE RECORDS. (a) A person's

failure to produce the records required by this subchapter or a

person's inability to provide other proof of tax payment, on

demand by the comptroller, is prima facie evidence that tobacco

products possessed by the person were received for the purpose of

making a first sale without payment of the tax imposed by this

chapter.

(b) This section does not apply to a person who possesses

tobacco products on which a tax of less than $50 is due, as

provided by Section 155.022.

(c) This section does not apply to a failure to produce records

or provide other proof of tax payment under Subsection (a) if the

failure results from an occurrence beyond the person's control.

Added by Acts 1991, 72nd Leg., ch. 409, Sec. 52, eff. June 7,

1991. Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 19.92, eff.

Sept. 1, 1997.

SUBCHAPTER E. ENFORCEMENT OF TAX

Sec. 155.141. DONATIONS. The comptroller may accept gifts,

grants, and donations for the administration and enforcement of

this chapter.

Added by Acts 1989, 71st Leg., ch. 240, Sec. 75, eff. Oct. 1,

1989. Amended by Acts 1997, 75th Leg., ch. 1040, Sec. 50, Sept.

1, 1997; Acts 1997, 75th Leg., ch. 1423, Sec. 19.93, eff. Sept.

1, 1997.

Sec. 155.143. SEIZURE. (a) The comptroller with or without

process may seize:

(1) tobacco products taxed under this chapter that are possessed

or controlled by a person for the purpose of selling or removing

the tobacco products in violation of this chapter;

(2) tobacco products that are removed, deposited, or concealed

by a person intending to avoid payment of taxes imposed by this

chapter;

(3) an automobile, truck, boat, conveyance, or other type of

vehicle used to remove or transport tobacco products by a person

intending to avoid payment of taxes imposed by this chapter; and

(4) equipment, paraphernalia, or other tangible personal

property used by a person intending to avoid payment of taxes

imposed by this chapter found in the place where the tobacco

products are found.

(b) An item seized under this section is forfeited to the state

and remains in the custody of the comptroller for disposition as

provided by this chapter. The seized item is not subject to

replevin.

Acts 1981, 67th Leg., p. 1678, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 76, eff.

Oct. 1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 53, eff. June

7, 1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.94, eff. Sept.

1, 1997.

Sec. 155.144. COMPTROLLER'S REPORT. (a) If the comptroller

seizes property under Section 155.143, the comptroller shall

immediately make a written report showing:

(1) the name of the person making the seizure;

(2) the place where the property was seized;

(3) the person from whom the property was seized; and

(4) an inventory of the property seized.

(b) The comptroller shall prepare the report in duplicate. The

person who seized the property shall sign the report. The

comptroller shall give the original to the person from whom the

property was seized and shall file a duplicate copy open for

public inspection in the comptroller's office.

Acts 1981, 67th Leg., p. 1678, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 77, eff.

Oct. 1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 54, eff. June

7, 1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.95, eff. Sept.

1, 1997.

Sec. 155.1445. SALE OF SEIZED TOBACCO PRODUCTS. (a) Tobacco

products are perishable items.

(b) If the seized tobacco products are in a salable condition,

the comptroller may sell the tobacco products, return the tobacco

products to the manufacturer for credit, or destroy or dispose of

the tobacco products.

(c) The price obtained at the sale is the market value for the

tobacco products sold.

(d) The comptroller shall place the proceeds from the sale of

seized tobacco products in escrow in a treasury suspense account,

pending the outcome of the forfeiture proceeding provided for in

this chapter.

(e) If a determination is made that the comptroller wrongfully

seized the tobacco products, the person entitled to the tobacco

products at the time of seizure may recover the money held in

escrow in the treasury suspense account.

Added by Acts 1991, 72nd Leg., ch. 409, Sec. 55, eff. June 7,

1991. Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 19.96, eff.

Sept. 1, 1997.

Sec. 155.145. FORFEITURE PROCEEDING. (a) The owner of property

seized under this chapter is entitled to written notice of the

seizure.

(b) The comptroller shall give the notice by certified mail,

return receipt requested, not later than the 15th day after the

date of seizure and shall include with the notice an inventory of

the property seized and a statement that the owner of property

seized is entitled to a hearing on the seizure. Service by mail

is complete when the notice is received, as evidenced by return

receipt from the U.S. Postal Service.

(c) After providing the notice and a hearing, if a hearing is

requested under Subsection (b), the comptroller may order the

forfeiture to the state of any property seized under this chapter

or the proceeds of the sale of any tobacco products seized under

this chapter if the comptroller finds that the property was used,

controlled, possessed, or concealed for the purpose of violating

any provision of this chapter.

(d) The comptroller shall hold property or proceeds forfeited

under this section in escrow until the comptroller's

determination is final and the period for filing a petition for

judicial review has expired.

Acts 1981, 67th Leg., p. 1679, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 78, eff.

Oct. 1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 56, eff. June

7, 1991; Acts 1997, 75th Leg., ch. 1040, Sec. 51, eff. Sept. 1,

1997; Acts 1997, 75th Leg., ch. 1423, Sec. 19.97, eff. Sept. 1,

1997.

Sec. 155.1451. DISPOSITION OF FORFEITED PROPERTY. (a) The

comptroller may sell property forfeited to the state at public or

private sale in any commercially reasonable manner.

(b) Subject to the provisions of Section 155.153, the

comptroller shall deposit the sale proceeds, less expenses of

seizure, court costs, and any investigation and audit costs, in

the state treasury.

(c) The comptroller shall use the sale proceeds to operate and

administer the tobacco products tax program up to the amount

appropriated by the legislature for this purpose. The comptroller

shall allocate any sale proceeds that exceed the legislative

appropriation as provided by Subchapter H. Any unused

appropriations remain in the general revenue fund.

Added by Acts 1991, 72nd Leg., ch. 409, Sec. 57, eff. June 7,

1991. Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 19.98, eff.

Sept. 1, 1997.

Sec. 155.150. SEIZURE OR SALE NO DEFENSE. The seizure,

forfeiture, and sale of tobacco products or property under this

chapter, with or without court action, is not a defense to

criminal prosecution for an offense or from liability for a

penalty under this chapter.

Acts 1981, 67th Leg., p. 1680, ch. 389, Sec. 1, eff. Jan. 1,

1982.

Sec. 155.151. WAIVER PERMITTED. (a) The comptroller may waive

a forfeiture proceeding for property seized under Section 155.143

of this code if the owner or possessor of the property:

(1) pays the tax due; and

(2) pays to the state through the comptroller an additional sum

equal to the tax due.

(b) The comptroller may make a compromise with a person before

or after a claim is filed in court. The comptroller shall keep a

record open for public inspection of compromises and waivers of

forfeiture made under this section.

Acts 1981, 67th Leg., p. 1680, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 81, eff.

Oct. 1, 1989; Acts 1997, 75th Leg., ch. 1423, Sec. 19.99, eff.

Sept. 1, 1997.

Sec. 155.152. PAYMENT TO TREASURY. The comptroller shall

deposit all taxes collected under this chapter, after payment of

costs, in the treasury to be allocated as provided by Subchapter

H.

Acts 1981, 67th Leg., p. 1680, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 82, eff.

Oct. 1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 58, eff. June

7, 1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.100, eff. Sept.

1, 1997.

Sec. 155.153. PREFERRED STATE TAX LIEN. (a) All taxes, fines,

interest, penalties, and costs due under this chapter are secured

by a preferred lien in favor of the state, first and prior to all

other existing or future liens, contractual or statutory, legal

or equitable, regardless of the time the lien originated, on any

property seized and forfeited under this chapter.

(b) A lienholder who establishes an interest in the property is

entitled to recover any proceeds remaining after payment of all

taxes, interest, penalties, and costs due to the state.

Added by Acts 1991, 72nd Leg., ch. 409, Sec. 59, eff. June 7,

1991.

Sec. 155.154. DONATIONS. The comptroller may accept gifts,

grants, and donations for the administration and enforcement of

this chapter.

Added by Acts 1991, 72nd Leg., ch. 409, Sec. 59, eff. June 7,

1991. Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 19.101,

eff. Sept. 1, 1997.

Sec. 155.155. RECIPROCAL AGREEMENTS. (a) The comptroller may

enter into a reciprocal agreement with a tax official of another

state or an official of the United States allowing the exchange

of information received by, recorded by, prepared by, furnished

to, or collected by the comptroller with respect to the

investigation and enforcement of this chapter for any tax,

penalty, interest, fine, forfeiture, or offense.

(b) This section does not permit the exchange of information

made confidential by this chapter.

Added by Acts 1991, 72nd Leg., ch. 409, Sec. 59, eff. June 7,

1991. Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 19.102,

eff. Sept. 1, 1997.

SUBCHAPTER F. ADMINISTRATION BY COMPTROLLER

Sec. 155.181. COMPLIANCE INVESTIGATION AND RECOVERY OF COSTS.

(a) If the comptroller has reason to believe that a person has

failed to pay a tax or penalty in the proper manner when due or

otherwise failed to comply with this chapter, the comptroller may

employ auditors and investigators to determine compliance and any

amount due. If the comptroller determines that the person has not

paid the tax or penalty or has failed to comply with this

chapter, the comptroller may require the person to pay the

reasonable expenses incurred in the compliance investigation and

audit as an additional penalty.

(b) The comptroller shall deposit funds paid under this section

to the credit of the general revenue fund in the treasury to be

used for making audits, conducting investigations, or as

otherwise appropriated. The comptroller may use other funds

available for audits as appropriated by the legislature.

Acts 1981, 67th Leg., p. 1681, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 83, eff.

Oct. 1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 61, eff. June

7, 1991; Acts 1995, 74th Leg., ch. 1000, Sec. 52, eff. Oct. 1,

1995; Acts 1997, 75th Leg., ch. 1423, Sec. 19.104, eff. Sept. 1,

1997.

Sec. 155.182. PAYMENT OF DOUBLE AMOUNT. (a) If the comptroller

finds that a person has sold tobacco products without the tax

having been paid, the comptroller may require the person to pay

the state through the comptroller a sum equal to twice the amount

of tax due.

(b) If a person does not furnish the comptroller with any

evidence showing payment of the tax on tobacco products purchased

by the person, it is presumed that the tobacco products were sold

without reporting and paying the tax.

Acts 1981, 67th Leg., p. 1681, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 84, eff.

Oct. 1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 62, eff. June

7, 1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.105, eff. Sept.

1, 1997.

Sec. 155.183. INSPECTION. (a) To determine the tax liability

of a person dealing in tobacco products or compliance by the

person with this chapter, the comptroller may:

(1) inspect any premises, including a vending machine and its

contents, where tobacco products are manufactured, produced,

stored, transported, sold, or offered for sale or exchange;

(2) remain on the premises as long as necessary to determine the

tax liability or compliance with this chapter;

(3) examine the records required by this chapter or other

records, books, documents, papers, accounts, and objects that the

comptroller determines are necessary for conducting a complete

examination; and

(4) examine stocks of tobacco products.

(b) A person dealing in tobacco products may not:

(1) fail to produce, on the comptroller's demand, records

required by this chapter; or

(2) hinder or prevent the inspection of records or the

examination of the premises.

Acts 1981, 67th Leg., p. 1681, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 85, eff.

Oct. 1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 63, eff. June

7, 1991; Acts 1995, 74th Leg., ch. 1000, Sec. 53, eff. Oct. 1,

1995; Acts 1997, 75th Leg., ch. 1423, Sec. 19.106, eff. Sept. 1,

1997.

Sec. 155.184. CREDIT FOR TAX PAID. (a) The comptroller may

adopt rules providing for a credit or refund for tax paid on

tobacco products if the tobacco products have become unfit for

use or consumption or unsalable.

(b) The comptroller may not allow a credit or refund under this

section unless the comptroller is satisfied that the tobacco

products are unfit for use or consumption or unsalable or have

been returned to the manufacturer.

Acts 1981, 67th Leg., p. 1682, ch. 389, Sec. 1, eff. Jan. 1,

1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 86, eff.

Oct. 1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 63, eff. June

7, 1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.107, eff. Sept.

1, 1997.

Sec. 155.185. DEFICIENCY DETERMINATION, PENALTIES, AND INTEREST.

(a) If the comptroller has reasonable cause to believe that a

tax report or the amount of tax is inaccurate, the comptroller

may compute and determine the amount of tax, penalty, and

interest to be paid from information contained in the report or

from any other information available to the comptroller.

(b) On making a deficiency determination, the comptroller shall

notify the person by personal service or by mail. Service by mail

is complete when the notice is deposited with the U.S. Postal

Service.

Added by Acts 1991, 72nd Leg., ch. 409, Sec. 64, eff. June 7,

1991. Amended by Acts 1995, 74th Leg., ch. 1000, Sec. 54, eff.

Oct. 1, 1995; Acts 1997, 75th Leg., ch. 1423, Sec. 19.108, eff.

Sept. 1, 1997; Acts 1999, 76th Leg., ch. 1467, Sec. 2.46, eff.

Oct.