IPCPR Legislative | Texas

Texas

texas

Texas State Contact Information

Texas Comptroller of Public Accounts
(512) 463-3731

Texas Ethics Commission
(512) 463-5800

Taxation in Texas

 

Texas imposes a tax on cigars and other tobacco products when a distributor receives them for the purpose of making a first sale in Texas. “First sale” means: the first transfer of possession in connection with a purchase, sale, or any exchange for value of tobacco products in intrastate commerce; the first use or consumption of tobacco products in Texas; or the loss of tobacco products in Texas whether through negligence, theft, or other unaccountable loss. A tax is imposed on manufacturers who manufacture tobacco products in Texas at the time the tobacco products are first transferred in connection with a purchase, sale, or any exchange for value in intrastate commerce.

 

Tex. Tax Code § 155.021
Tex. Tax Code § 155.0211
Tex. Tax Code § 155.022

 

Staff reported that Texas localities do not levy additional tobacco products excise taxes, but retailers may be responsible for collecting additional local sales taxes on tobacco products.

The tax rates on cigars are as follows:

  • $0.01 per 10 or fraction of 10 on cigars weighing 3 pounds or less per 1,000
  • $7.50 per 1,000 on cigars that:
    • weigh more than 3 pounds per 1,000; and
    • sell at factory list price for $0.033 each
  • $11 per 1,000 on cigars that:
    • weigh more than 3 pounds per 1,000;
    • sell at factory list price for more than $0.033 each; and
    • contain no substantial amount of nontobacco ingredients
  • $15 per 1,000 on cigars that:
    • weigh more than 3 pounds per 1,000;
    • sell at factory list price for more than $0.033 each
    • contain a substantial amount of nontobacco ingredients

 

The tax rate on tobacco products other than cigars is $1.22 per ounce and a proportionate rate on all fractional parts of an ounce.

 

Tex. Tax Code § 155.021
Tex. Tax Code § 155.0211

Every entity that intends to store or offer for sale any cigarette, cigar, and/or tobacco products, or that owns cigars in a humidor and sells them to the public, must first obtain a Sales and Use Tax Permit by filing a Texas Sales and Use Tax Application (Form AP-201).

 

Tex. Tax Code § 155.041
Tex. Tax Code § 155.049

 

Each permitted distributor who receives cigars and/or tobacco products for the purpose of making a first sale in Texas must also file, by the last day of each month, the Texas Distributor Monthly Report of Cigar and/or Tobacco Products (Form 69-133), the Class W Worksheet (Form 69-134), the Distributor Report of Interstate Sales of Cigars and Tobacco Products (Form 69-135), and the Distributor Receiving Record of Cigar and Tobacco Products (Form 69-136), along with payment for taxes due.

 

Tex. Tax Code § 155.111

Texas Comptroller of Public Accounts: Cigarette, Cigar, and Tobacco Products Report Forms
http://www.window.state.tx.us/taxinfo/taxforms/69-forms.html

 

Form AP-201: Texas Sales and Use Tax Application
http://www.window.state.tx.us/taxinfo/taxforms/ap-201.pdf

 

Form 69-133: Texas Distributor Monthly Report of Cigar and/or Tobacco Products
http://www.window.state.tx.us/taxinfo/taxforms/69-133.pdf

 

Form 69-134: Class W Worksheet
http://www.window.state.tx.us/taxinfo/taxforms/69-134.pdf

 

Form 69-135: Distributor Report of Interstate Sales of Cigars and Tobacco Products
http://www.window.state.tx.us/taxinfo/taxforms/69-135.pdf

 

Form 69-136: Distributor Receiving Record of Cigar and Tobacco Products
http://www.window.state.tx.us/taxinfo/taxforms/69-136.pdf

Definitions in Texas

 

“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.

 

Tex. Tax Code § 155.001(2)

 

“Tobacco product” means: a cigar; 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; chewing tobacco, including Cavendish, twist, plug, scrap, and any kind of tobacco suitable for chewing; snuff or other preparations of pulverized tobacco; or an article or product that is made of tobacco or a tobacco substitute and that is not a cigarette.

 

Tex. Tax Code § 155.001(15)

 

“First sale” means: the first transfer of possession in connection with a purchase, sale, or any exchange for value of tobacco products in intrastate commerce; the first use or consumption of tobacco products in Texas; or the loss of tobacco products in Texas whether through negligence, theft, or other unaccountable loss.

 

Tex. Tax Code § 155.001(8)

 

A “distributor” is a person who: receives tobacco products from a manufacturer for the purpose of making a first sale in Texas or otherwise brings or causes to be brought into Texas tobacco products for sale, use, or consumption; manufactures or produces tobacco products; or is an importer or import broker.

 

Tex. Tax Code § 155.001(6)

 

An “importer” or “import broker” is a person who ships, transports, or imports into Texas tobacco products manufactured or produced outside the United States for the purpose of making a first sale in Texas.

 

Tex. Tax Code § 155.001(9)

 

A “manufacturer” is a person who manufactures or produces tobacco products and sells tobacco products to a distributor.

 

Tex. Tax Code § 155.001(10)

 

A “retailer” is a person who engages in the practice of selling tobacco products to consumers and includes the owner of a coin-operated vending machine.

 

Tex. Tax Code § 155.001(14)

 

A “wholesaler” is a person who sells or distributes tobacco products in Texas for resale but who is not a distributor.

 

Tex. Tax Code § 155.001(16)

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